Patent Update: Patent Exhaustion: The Patent Owner’s Dilemma

December
,
2017

A patent gives its owner the right to block others from making, using, or selling products within the patent’s claims, or to demand a license fee for doing so. However, if the patent owner sells a unit covered by the patent’s claims, the patent owner can no longer limit what a buyer of the unit, or anyone the buyer passes the unit on to, can do with that unit. This is known as “patent exhaustion” (i.e., once the patent owner has sold a unit, the patent rights to that unit are used up, or exhausted).

Certain products are renewable, so once they are depleted, they can be refreshed and reused or resold. A buyer who can renew a product can reduce the number of times that he or she needs to go back to the original supplier to purchase a fresh product. A good example of a renewable product is toner cartridges for laser printers because they can be refilled, making them as good as new.

This renewability spawned an industry of cartridge remanufacturers — companies that are not the original inventors or manufacturers of the cartridges, that acquire depleted cartridges from consumers (who bought the cartridges from the original manufacturers), refill them, and resell the refilled cartridges to consumers.

The cost of refilling cartridges...

Author Bios: 

M. Henry Heines

M. Henry Heines, PhD, JD, (Email: mhheines@comcast.net; Website: http://henryheines.com) is a patent attorney and an author, speaker, and consultant on patent-related topics for lawyers, as well as for scientists, engineers, and managers in technology companies, and has served as an expert witness in patent litigation. He began his career as a research engineer in the chemicals industry and worked in corporate patent practice before entering private practice, including 25 years as a partner in the firm now...Read more

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