Wednesday March 22, 2017

U.S. Supreme Court Considers Foreign Patent Rights Case

Impression Products v. Lexmark International is a case that is being considered by the U.S. Supreme Court as it has far reaching implications in regards to foreign patent rights. Lexmark International sells printers and ink cartridges domestically and internationally. The ones that are sold internationally have a label on them that says they are restricted to a single use. Impression Products bought a large supply of the empty cartridges from a reseller and refilled them. They then began importing them back into the U.S.A. which did not go over well with Lexmark.

Lexmark has successfully argued in the D.C. Circuit Court of Appeals that this violates current patent law. The purpose of the patent law as currently written is to allow companies to sell products in various locales around the globe for different prices. This allows software for example to be purchased by poorer countries at a reduced price while maintaining higher prices in more affluent countries to maximize revenue.

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The U.S.Government isn't agreeing though. Patent exhaustion prevents the patent owners from having control over products after the first authorized sale. Conditions can be attached to the initial sale such as who can buy it and even dictate the use of the product, but then the patent rights are exhausted. Also items such as books can be resold by libraries due to patent and copyright laws that date back hundreds of years. The U.S. government considers this to be a monopolistic situation.

Interesting case as the ruling will set a precedent that will undoubtedly be used for software, medications, chips, etc in the future. How do you feel about the case? Should Lexmark be allowed to monopolize the market by restricting the use of their used printer cartridges? If I buy a pack of refilled cartridges from an international seller am I going to be in trouble with the law? Lots of change could come from this case if the Supreme Court takes it on.

Justice Stephen Breyer, the court's patent expert, said "any monopolist, including a patent monopolist, would love to be able to go to each buyer separately and extract from each buyer and user the maximum amount he would pay for that particular item."

"Dentists would pay more for gold perhaps than someone who wants to use gold for some other thing. Okay? They'd like that. But by and large, that's forbidden under many laws, even though it does mean slightly restricted output, and it also means a lower profit for the monopolist," Breyer said. "This precedent is very hard for you to get around."