Understanding the patent exhaustion doctrine
The US Patent Act, including sections 271 and 154(a) of 35 USC, grants the owners of patents the lawful monopoly right, during the term of the patents, to prevent others from infringing, such as by making, using, selling, and/or offering for sale in the US the patented invention(s).
However, the US “common law” doctrine known as the “patent exhaustion doctrine” generally limits the extent to which owners of patents are permitted to control articles that are the subject of authorised sales.
Under what is also known as this “first sale doctrine,” once that authorised sale takes place, the patent owner’s exclusive rights to control the article’s use and sale is deemed to have been “exhausted”. A purchaser of the article is free thereafter to use and/or resell the article free and clear of patent law restraints.
The patent exhaustion doctrine was cemented in 2008, when the US Supreme Court decided the case of Quanta Computer v LG Electronics. The court held that the initial authorised sale of a patented article terminates all patent rights to that item thereafter.
US law has always been interested in the goal of patents serving to promote the progress of science and useful arts. Consistent with this, the Quanta decision established that the patentee seller has received the reward for the use of the patented article, and should be prevented from repeated future attempts to extract compensation for the same product.
