Impression Products, Inc. v. Lexmark International, Inc.

In 2017, the U.S. Supreme Court decided Impression Products, Inc. v. Lexmark International, Inc., a pivotal patent law case. Lexmark sold toner cartridges with a post-sale restriction intended to prevent refilling by third parties. Impression Products acquired used cartridges, refilled them, and resold them. Lexmark sued for patent infringement. The Supreme Court held that a patentee's decision to sell a product exhausts all patent rights in that item, regardless of any post-sale restrictions the patentee attempts to impose. Furthermore, the Court ruled that patent exhaustion applies equally to authorized foreign sales, barring infringement claims upon importation. The 8-0 decision strongly affirmed the first sale doctrine, limiting patent holders' control over products after they are sold.

The Supreme Court reversed the Federal Circuit, ruling 8-0 that Lexmark exhausted its patent rights by selling cartridges, regardless of explicit post-sale restrictions. Domestic patent exhaustion cannot be avoided by contractual conditions, and an authorized foreign sale also exhausts patent rights under U.S. law.

Whether a patentee may retain exclusive rights by imposing post-sale restrictions on the use or resale of a patented product; and whether patent exhaustion applies to articles first sold abroad by the patentee.

The ruling bolstered the second-hand and refurbished product markets by affirming that consumers own patented items they lawfully purchase. It prevented patentees from using infringement suits to enforce contractual restrictions, promoting competition in aftermarket goods like printer supplies and pharmaceuticals. It also harmonized U.S. law with international exhaustion, reducing barriers to parallel imports.