Internet Lawyer Blog
The United States Supreme Court came out with a new patent law decision in Impression Products, Inc. v. Lexmark International, Inc. For those who are not familiar with patents, a patent grants the holder an exclusive right to exclude others from making, using, importing, and selling the patented innovation for a limited time.
Lexmark International is a company that manufactures, designs, and sells toner cartridges. These cartridges are sold both in the United States and outside of the United States. Lexmark International owns patents that cover the components of these cartridges as well as the way that they are used by consumers. Lexmark gives the purchasers of the toner cartridges two options: One option is to buy a toner cartridge at full price with no restrictions. The other option is to buy the cartridges at a discount through Lexmark’s “Return Program.” In order to get this lower price, the customers are required to sign a contract that they will only use the cartridge once and refrain from transferring it to anyone else except Lexmark.
Other companies that are known as remanufacturers would get the empty Lexmark cartridges, refill the cartridges with toner, and then resell those cartridges. Impression Products is one of those remanufacturers. They go through the same refilling process with cartridges that they acquire overseas and then import into the United States. Lexmark is suing Impression Products for patent infringement for both the “Return Program” cartridges sold in the United States and for the cartridges Lexmark sold abroad that were imported into the country by Impression Products.
In general, when a patent owner sells one of his/her products, then he/she is no longer able to control that item through patent laws. The person who has purchased the product is able to use and resell that product without having to worry about being sued.
The Supreme Court first dealt with the claim by Lexmark against the “Return Program” cartridges that were sold in the United States. The Court held that Lexmark had entirely lost its ability to bring a patent claim after it sold these cartridges. Lexmark may still be able bring a contract law claim based on the customers violating the single-use/no-resale restrictions.
The Supreme Court next dealt with the claim by Lexmark against the cartridges that were sold abroad and then imported into the United States. The high court came to the same conclusion for these cartridges, that if there is an authorized sale outside of the United States, then it exhausts all rights under the Patent Act.
This decision will likely be good for consumers because they may now be able to get lower prices. Consumers will no longer be forced to purchase their supplies from the original source. This decision means that independent companies will be able to refill ink and toner cartridges without worrying about patent infringement claims. The Supreme Court’s decision will also have an impact that goes beyond just ink and toner cartridges. Based on this decision, a company would be able to find where certain high-tech goods are sold for the cheapest price around the world and bring them to the United States where they can resell them to consumers. This is important because companies will often sell products at a lower price abroad, but add restrictions that the product cannot be brought into the United States.
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