Impression Products, Inc. v. Lexmark International, Inc.

Whether a patentee’s post-sale restrictions on the use or sale of its patented articles allows the patentee to avoid the doctrine of exhaustion upon first sale. Also, whether the doctrine of exhaustion applies when a U.S. patentee sells its articles abroad?

Respondent owns patents on toner cartridges that it makes and sells for its printers. Respondent was the first seller of the cartridges at issue and sold some abroad and some in the United States. Some of the foreign cartridges and all the domestic cartridges were sold subject to a single-use/no-resale condition. Petitioner acquired the cartridges at issue, importing the ones it got abroad, and resold them in the United States. For both the foreign and domestic cartridges, Petitioner resold them without express authorization from Respondent. Further, Petitioner violated the express single-use/no-resale restriction for some sales. Petitioner argues that its resale and importation was not a violation, because Respondent’s first sale constituted an exhaustion of its patent rights. With respect to the domestic cartridges, the Federal Circuit held that such a clearly communicated conditional sale does not give a buyer the authority to resell the goods and does not indicate an exhaustion of the patentee’s rights to exclude. This decision applies whether the patentee makes the first sale or the patentee licenses someone else to make and sell the goods. With respect to the foreign cartridges, the Federal Circuit held that a foreign sale made or authorized by a U.S. patentee does not waive their U.S. patent rights, conclusively or presumptively, and does not give a buyer the right to import the item into the United States for sale. In its Petition for a Writ of Certiorari, Petitioner argues for reconsideration of both issues because they are contrary to precedent.