International IP Exhaustion

In the US, once a patented product has been lawfully sold, the patent rights are “exhausted.” This means that subsequent purchasers can obtain the product free of patent rights. The theory behind exhaustion is that a patent owner should be able to recover or obtain royalties only once for a given product.

A product covered by a US patent that is lawfully sold outside the US (by virtue of not being patented in the country of sale or by permission of the patent owner in the country of sale) and then imported into the US may still be liable for infringement. A foreign sale would not exhaust US patent rights. Other countries may take a different approach to this issue.

Kirtsaeng v. John Wiley & Sons

The Supreme Court recently heard arguments in a copyright exhaustion case from the Second Circuit.  Although the case involves copyrighted works, it will have implications for patent law.

Kirtsaeng lawfully acquired copyrighted textbooks in Thailand.  He imported them into the US and resold them.  The publisher sued him for copyright infringement.  He argued that the first sale or exhaustion defense shielded him from liability.  The Second Circuit held that the defense does not apply to works that were acquired outside the US.

Professor Kristen Osenga of the University of Richmond Law School (my wife) provided a podcast for the Federalist Society about the argument of the case at the Supreme Court.

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One Response to “International IP Exhaustion”

  1. International IP Exhaustion Reprised | INVENTIVE STEP Says:

    [...] an update to my earlier post on the case, the Supreme Court recently issued its decision on international copyright [...]

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