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LAWYERS DIVISION

Intellectual Property Practice Group Podcast

May a patent owner use contracts to prohibit any resale or reuse of its patented products beyond the initial purchaser? OnTuesday, March 21, 2017, the Supreme Court will hear oral argument in Impression Products v. Lexmark International, which raises this important question.

Lexmark makes patented toner cartridges and sells them with a contract restriction that the cartridges not be resold or refilled. Impression Products buys used Lexmark toner cartridges, refills, and resells them. Lexmark argues that because the license accompanying the original sale of the cartridges prohibits transferring the cartridges, any reuse and refilling of the cartridges is an unauthorized use and thus a patent infringement. If Lexmark’s argument wins, then manufacturers of patented goods will be able to restrict downstream uses of their goods by use of licenses, and no privity of contract will be required to hold third parties liable. On the other hand, defendant Impression Products argues that the “patent exhaustion” doctrine should operate here to restrict Lexmark from asserting any patent rights after a first, authorized sale. Also at issue is whether first sales in foreign countries instead of the U.S. should affect the outcome.

The case will have significant effects on the ability of patent owners to control the downstream uses of their patented products, and may affect the ability of patent owners to prevent the importation of “grey market” goods that have been lawfully sold in other countries, similarly to the Supreme Court’s holding in the 2013 copyright case of Kirtsaeng v. John Wiley & Sons, Inc. 

Professor David Olson of Boston College Law School offered impressions and predictions after the Court heard oral argument.

Featuring:

  • Prof. David S. Olson, Associate Professor, Boston College Law School
Environmental Law & Property Rights Podcast

On March 20, the Supreme Court will hear oral argument in Murr v. Wisconsin. This is a regulatory takings case which addresses the question: should two legally distinct but commonly owned contiguous parcels be combined, as described in Penn Central Transportation Company v. City of New York, for takings analysis purposes?

In 1960 and 1963, the Murrs purchased two adjacent lots in St. Croix County, Wisconsin, each over an acre in size. In 1994 and 1995, the parents transferred the parcels to their children. These lots became nonconforming due to various setbacks imposed in the 1970s, but a grandfathering provision would have allowed independent and separate uses – but only if the lots were not owned by the same individuals.  Seven years later, the children wanted to sell one of the two original lots and were denied permission to do so by the St. Croix County Board of Adjustment. The Murrs sued the state and county and claimed the county’s actions resulted in an uncompensated taking of their property. The trial court granted summary judgement to the state and county and the Court of Appeals of Wisconsin affirmed.

James Burling, Vice President of Litigation at the Pacific Legal Foundation and Misha Tseytlin, the Solicitor General for the State of Wisconsin, will join us to discuss this interesting case and offer their thoughts following oral argument. 

Featuring:

  • James S. Burling, Vice President of Litigation, Pacific Legal Foundation
  • Misha Tseytlin, Solicitor General for the State of Wisconsin
SCOTUScast 3-21-17 featuring Howard J. Klein

On February 22, 2017, the Supreme Court decided Life Technologies Corp. v. Promega Corp. Promega Corporation owned four patents for technology used in kits that can conduct genetic testing and was the exclusive licensee of a fifth patent. In 2010, Promega sued Life Technologies Corporation (LifeTech) for allegedly infringing on these patents.  A jury found in favor of Promega but the district court nevertheless ruled for LifeTech, concluding that Promega had failed to present evidence sufficient to sustain the favorable jury verdict. The U.S. Court of Appeals for the Federal Circuit reversed that judgment, holding that the four Promega patents were ultimately invalid but agreeing that LifeTech had infringed the fifth patent and remanding to the district court for a determination of damages.  In the course of its ruling, the Federal Circuit concluded that LifeTech’s supplying of a single, commodity component of a mulit-component invention had exposed LifeTech under federal law to damages liability on worldwide sales.

The question before the Supreme Court was whether the Federal Circuit erred in holding that supplying a single, commodity component of a multi-component invention from the United States exposes a manufacturer to liability for worldwide sales. 

By a vote of 7-0, the Supreme Court reversed the judgment of the Federal Circuit and remanded the case. In an opinion by Justice Sotomayor, the Court held that the supply of a single component of a multicomponent invention for manufacture abroad does not give rise to liability under Section 271(f)(1) of the Patent Act, which prohibits the supply from the United States of "all or a substantial portion of the components of a patented invention" for combination abroad. Justice Sotomayor’s opinion was joined by Justices Kennedy, Ginsburg, Breyer, and Kagan. Justices Thomas and Alito joined the majority opinion as to all but Part II-C. Justice Alito filed an opinion concurring in part and concurring in the judgment, in which Justice Thomas joined. Chief Justice Roberts was recused.

To discuss the case, we have Howard J. Klein who is Attorney at Law at Klein, O’Neill & Singh, LLP.

Tallahassee Lawyers Chapter

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