CHARLESTON – The U.S. Supreme Court has sided with a Charleston business in a patents rights case filed by Lexmark against Impression Products in 2010.
Lexmark sued Impression alleging patent infringement after Impression refilled and resold used Lexmark toner cartridges.
Impression claimed that Lexmark’s patents were no longer in effect once a cartridge was sold because of the first-sale doctrine—which allows it to sell the cartridges it bought as it pleased. Some of the cartridges purchased were done so outside of the United States, which lead to a debate regarding the doctrine’s application for foreign purchases.
In the May 30 opinion, the Supreme Court ruled that Lexmark’s cartridges were no longer protected by patent law in both foreign and domestic purchases.
The court write that where a product was purchased does not affect the first-sale doctrine.
The Supreme Court’s ruling reverses a federal court decision that had upheld Lexmark’s patent rights.
Chief Justice John Roberts authored the majority opinion. Justice Ruth Bader Ginsburg dissented in part to the opinion on patent rights for foreign sales.
“We conclude that Lexmark exhausted its patent rights in these cartridges the moment it sold them,” Roberts wrote. “The single-use/no-resale restrictions in Lexmark’s contracts with customers may have been clear and enforceable under contract law, but they do not entitle Lexmark to retain patent rights in an item that it has elected to sell.”
Roberts wrote that allowing patent rights to stick remora-like to that item as it flows through the market would violate the principle against restraints on alienation.
“Exhaustion does not depend on whether the patentee receives a premium for selling in the United States, or the type of rights that buyers expect to receive,” he wrote. “As a result, restrictions and location are irrelevant; what matters is the patentee’s decision to make a sale.”
The parties argued their cases before the court on March 21.
Lexmark alleged that the patent rights vary widely throughout the world and that having the doctrine apply to international sales could negatively affect the business of U.S. companies in trade abroad.
In her concurring in part and dissenting in part opinion, Ginsburg called patent law territorial.
“When an inventor receives a U.S. patent, that patent provides no protection abroad,” Ginsburg wrote.
A U.S. patentee must apply to each country in which she seeks the exclusive right to sell her invention, according to her opinion.
“Because a sale abroad operates independently of the U.S. patent system, it makes little sense to say that such a sale exhausts an inventor’s U.S. patent rights,” she wrote. “U.S. patent protection accompanies none of a U.S. patentee’s sales abroad—a competitor could sell the same patented product abroad with no U.S.-patent-law consequence.”
Accordingly, the foreign sale should not diminish the protections of U. S. law in the United States, she wrote.
In 2015, the lawsuit was recommended to the U.S. Supreme Court because of the doctrine.
U.S. Supreme Court case number: 15-1189