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  • Avoiding Patent Exhaustion: Structuring Agreements in View of the Latest Jurisprudence

    Posted on Lexology.com

    What do the principles of patent exhaustion have to do with the convenience of disposable consumer products such as individual coffee/tea/beverage pods, disposable diagnostic test strips, refillable ink cartridges and the like? Although transparent to consumers, these principles are important to the innovative companies creating these products and protecting them through IP rights. How a company controls the proprietary rights to make and/or market these components can have profound consequences on maintaining its competitive edge in the marketplace.

    A patent owner has the right to develop and license its bundle of make/use/sell/etc. rights as it sees fit, but an unqualified sale of a patented device can effect a complete transfer of the entire bundle of ownership rights. Under the principles of patent exhaustion, a patent owner cannot later sue a customer who purchased a patented product without qualification. But whether a patentee can restrict a sale..." [read more at www.lexology.com]