IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

all

JUMBO

No

TARIFF PEAK

No
← back to the state act
Inception date: 30 May 2017 | Removal date: open ended
Still in force

Import-related non-tariff measure, nes

On May 30, 2017, the U.S. Supreme Court issued a decision that may facilitate trade in “gray market” goods (i.e., legal, non-counterfeit goods sold outside normal distribution channels by sellers that may have no relationship with the producer of the goods). In Impression Products, Inc. v. Lexmark International, Inc. (Slip Op. 15-1189) the court reversed a decision of the U.S. Court of Appeals for the Federal Circuit to hold that when a patentee sells one of its products, the patentee has exhausted its rights and can no longer control that item through the patent laws.

In this case, Lexmark – which owns patents that cover components of toner cartridges and the manner in which they are used – requires that customers who buy through the company’s return program must sign a contract agreeing to use the cartridge only once and to refrain from transferring the cartridge to anyone but Lexmark. Remanufacturers acquire empty toner cartridges, refill them, and resell them. Lexmark sued remanufacturers for patent infringement. The Supreme Court held that Lexmark exhausted its patent rights, and that a patentee’s decision to sell a product exhausts all of its patent rights in that item regardless of any restrictions the patentee purports to impose. It also held that Lexmark cannot sue remanufacturers for infringement with respect to the cartridges sold abroad.

AFFECTED COUNTRIES

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