WIPR survey: Readers back Federal Circuit on patent exhaustion

A patent owner’s rights should not be exhausted when a patent-protected product is first sold abroad before being imported into the US, WIPR readers have said.

Responding to WIPR’s most recent survey, 75% of respondents said they agreed with a ruling handed down by the US Court of Appeals for the Federal Circuit earlier this month.

The en banc federal circuit sided with printer cartridge maker Lexmark on February 12 and said that Impression Products infringed its patents by selling modified products that were obtained abroad before being imported to and sold in the US. Impression had said Lexmark’s patent rights had been exhausted.

In a 10-2 decision, the court sided with Lexmark and ruled that the sale of a patented product abroad does not exhaust a party’s rights.

Responding to whether the ruling was correct, 75% of respondents said they agreed with the federal circuit.

One respondent said: “Patent owners should be able to use their rights to implement price disparities and other forms of product differentiation across different markets.

“The alternative is that patented products become less affordable in less-developed nations, and/or that the US market is distorted by cheap imports intended for sale elsewhere.”

Another added said that patents are “national rights” and provide protection only in the nation in which they are granted.

“A US patent can only prevent actions inside its borders and actions outside of the US do not infringe. Selling an item outside of the US does not infringe a US patent; importing that product into the US does infringe.”

For this  week’s survey we ask: “The US Supreme Court has been urged to overturn the US Court of Appeals for the Federal Circuit’s rulings in the Halo v Pulse and Stryker v Zimmer cases. Do you think the rulings should be overturned?”