In an application of 2017 U.S. Supreme Court precedent in Impressions Products, Inc. v. Lexmark Intern., Inc., the Northern District California in International Fruit Genetics LLC v. Orcharddepot.com, No. 4:17-cv-02905-JSW, recently denied a motion to dismiss a claim of patent infringement by holding that the patent exhaustion doctrine did not apply to a sale of a patented product that was outside the scope of the license granted by the patent owner. This decision helps inform how licenses may be interpreted post-Impression Products.
On Tuesday, the U.S. Supreme Court heard oral argument in the highly anticipated case regarding the patent exhaustion doctrine, Lexmark Int’l, Inc. v. Impression Prods., Inc., No. 15-1189.
As we reported earlier here, the Federal Circuit Court of Appeals, in an en banc decision, agreed with Lexmark and confirmed two important aspects of the patent exhaustion doctrine, namely that (1) a patentee can “sell a patented article subject to a single-use/no-resale restriction that is lawful and clearly communicated to the purchaser” without exhausting the patentee’s rights to that item, thereby permitting enforcement of the restrictions via an infringement suit; and (2) because foreign sales do not permit “the buyer to import the article and sell and use it in the United States,” an authorized foreign sale of a product does not exhaust a patentee’s U.S. patent rights to exclude associated with that product. The Supreme Court subsequently granted Impression Product’s petition to review these two holdings.