In episode 40 of Supreme Court Briefs, a printer toner manufacturer sues a company that refills their printer toner cartridges and resells them for a lower price. How long does a patent last, anyway?
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A company called Impression Products makes money by buying up old printer toner cartridges, refilling them with more toner, and selling them at a much lower price than it’d cost to buy one brand new. Well, Lexmark, one of the companies that makes those printer toner cartridges, didn’t like that so much, as it was, you know, cutting into their profits. Lexmark sued Impression Products, arguing that by fixing up and reselling its old printer cartridges without their permission, Impression was not respecting the patent Lexmark held on them. Lexmark said it didn’t just own the patent for the product when it first sold- it owned it for future resales, and they thought they deserved some of that profit Impression was getting.
So first, we are talking about United States patent law here, which Article 1, section 8, clause 8 of the Constitution talks about.
“Promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries”
But could you be more specific please? Well it’s all spelled out in Title 35 of the U.S. Code, which I’m not going to read to you because that would put you to sleep. One thing that is important here is what’s known as the exhaustion doctrine, which limits how much control someone has over their patent once the final sale is made. For example, if I make a guitar and sell it to Jim Bob, and Jim Bob later converts that guitar into a boat and resell it as a boat, the exhaustion doctrine applies. I don’t get some of that profit from Jim Bob selling the boats.
Basically, there were two parts to this case. One, as I mentioned earlier, Impression was reselling the cartridges after it re-filled them with toner, but two, they were also importing cartridges Lexmark had sold in other countries.
The district court said that patent was exhausted, yo. So Impression could refill those cartridges. However, it also said that didn’t apply to those imported cartridges because there wasn’t a law or case that said patent protections ended for stuff sold outside the country. So both sides appealed. In addition, the U.S. government stepped in to be on the side of Lexmark. It ended up in the Federal Circuit of DC. They voted 10-2 in favor of Lexmark for BOTH parts of the case, using two other federal circuit cases to back up their ruling. That said, they said buyers generally could do what they want with a patented product after they bought it. But if patent holders wanted restrictions, they should be respected.
Impression appealed again, and the Supreme Court agreed to look at the case, hearing oral arguments on March 21, 2017. That wasn’t that long ago guys. The newly appointed justice Neil Gorsuch didn’t hear arguments, so he did not vote in this one.
On May 30, 2017, the Court announced its decision. It sided with Impression Products.
Impression Products v. Lexmark was a victory for consumers and a major setback for companies trying to use their patents to attack other companies.