Patent Exhaustion

Definition

Patent exhaustion is a legal doctrine that limits the patent holder's rights after the first authorized sale of a patented product. It restricts the patent owner's ability to control the use or resale of that specific product once it has been sold.

5 Must Know Facts For Your Next Test

1. Patent exhaustion applies only to the specific product that was sold, not to other products that may be covered by the same patent.
2. The doctrine of patent exhaustion does not apply if the patent owner conditions the sale on post-sale restrictions that the buyer agrees to.
3. Patent exhaustion can be international in scope, limiting the patent holder's rights even when the patented product is sold abroad and then imported into the country.
4. The repair doctrine allows consumers to repair a patented product they have purchased without infringing on the patent, as long as the repair does not constitute impermissible reconstruction.
5. Patent exhaustion is an important limitation on the patent holder's rights, promoting the free flow of commerce and preventing patent owners from exerting control over the downstream use of their products.

Review Questions

• Explain how the patent exhaustion doctrine limits the patent holder's rights after the first authorized sale of a patented product.
  • The patent exhaustion doctrine states that when a patent owner authorizes the sale of a patented product, the patent owner's rights in that specific product are exhausted. This means the patent owner can no longer control the use or resale of that particular product, as the purchaser now has the right to do with it as they please. This promotes the free flow of commerce and prevents patent owners from exerting control over the downstream use of their products after the initial authorized sale.
• Describe how the repair doctrine relates to the concept of patent exhaustion.
  • The repair doctrine is closely tied to patent exhaustion, as it allows consumers to repair a patented product they have purchased without infringing on the patent. Once a patented product is sold, the patent owner's rights are exhausted, and the purchaser has the right to repair the product as long as the repair does not constitute impermissible reconstruction. This ensures that consumers can maintain and extend the useful life of the products they have purchased, further promoting the principles behind patent exhaustion.
• Analyze how the doctrine of patent exhaustion can be limited by the patent owner through the use of conditional sales.
  • While patent exhaustion generally applies to the first authorized sale of a patented product, the doctrine can be limited if the patent owner imposes restrictions on the use or resale of the product through a conditional sale. In a conditional sale, the patent owner may require the buyer to agree to certain post-sale restrictions, such as limitations on how the product can be used or resold. If the buyer agrees to these conditions, the patent exhaustion doctrine may not apply, and the patent owner can continue to exert control over the downstream use of the product. This highlights the importance of understanding the specific terms and conditions of a sale when considering the applicability of patent exhaustion.

Related terms

First Sale Doctrine:

The first sale doctrine is a related legal principle that allows the purchaser of a copyrighted work to resell, lend, or otherwise dispose of that particular copy without the copyright owner's permission.

Conditional Sale: A conditional sale is a transaction where the patent owner imposes restrictions on the use or resale of the patented product after the initial sale, which can limit the application of patent exhaustion.

Repair Doctrine: The repair doctrine allows consumers to repair a patented product they have purchased without infringing on the patent, as long as the repair does not constitute impermissible reconstruction of the product.