First-sale doctrine (patent)

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This article is about the first-sale doctrine as applied to patents. For the analogous first-sale doctrine applicable to copyright, see First-sale doctrine.

Under the first sale doctrine, the first unrestricted sale of a patented item exhausts the patentee's control over that particular item. It generally is asserted as an affirmative defense to charges of patent infringement, but less commonly is asserted affirmatively in a declaratory judgment action.

The doctrine also may be referred to as the doctrine of "patent exhaustion." It is closely related to (and sometimes conflated with) the doctrine of implied license, and is often asserted in conjunction with claims of equitable estoppel or legal estoppel.

[edit] Cases involving the first-sale doctrine

In Jazz Photo Corp v International Trade Commission, 59 USPQ 2d 1907 (Fed Cir August 21 2001), Fuji Photo Film asserted that the user of a single-use camera was not allowed to remove the film, process it, replace the battery, or package it in a new cardboard container, based on labelling on the camera warning the purchaser that the camera should not be opened. The ITC held that these steps amounted to reconstructing the camera and infringement of the patents. The decision was reversed by the Federal Circuit on the grounds that the labelling was not an enforceable restriction on the use of the camera, that "no licence limitations may be implied from the circumstances of sale" (59 USPQ 2d at 1917), and that the challenged activities merely repaired the camera and extended its useful life.

In Arizona Cartridge Remanufacturers Association Inc. v Lexmark International Inc, 421 F.3d 981 (9th Cir. 2005), the Ninth Circuit Court of Appeals upheld a District Court decision that found that the contract terms on the packaging of a printer cartridge are sufficiently clear to act as a "box-wrap" license, such that when the user opens the box he or she is accepting the terms and forming a contract. Because the printer cartridge is patented, Lexmark can impose post-sale conditions on purchasers such as prohibitions preventing refilling of the cartridge.