The opinion
United States Court of Appeals
for the Federal Circuit
______________________
LEXMARK INTERNATIONAL, INC.,
Plaintiff-Cross-Appellant
v.
IMPRESSION PRODUCTS, INC.,
Defendant-Appellant
QUALITY CARTRIDGES, INC., JOHN DOES, 1-20,
BLUE TRADING LLC, EXPRINT INTERNATIONAL,
INC., LD PRODUCTS, INC., PRINTRONIC
CORPORATION, TESEN DEVELOPMENT (HONG
KONG) CO. LTD., BENIGNO ADEVA AND HIS
COMPANIES,
Defendants
______________________
2014-1617, 2014-1619
______________________
Appeals from the United States District Court for the
Southern District of Ohio in No. 1:10-cv-00564-MRB,
Judge Michael R. Barrett.
______________________
Decided: February 12, 2016
______________________
CONSTANTINE L. TRELA, JR., Sidley Austin LLP, Chi-
cago, IL, argued for plaintiff-cross-appellant. Also repre-
sented by ROBERT N. HOCHMAN; BENJAMIN BEATON,
JOSHUA JOHN FOUGERE, Washington, DC; TIMOTHY COLIN
2 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
MEECE, BRYAN MEDLOCK, JR., AUDRA C. EIDEM HEINZE,
JASON S. SHULL, Banner & Witcoff, Ltd., Chicago, IL;
STEVEN B. LOY, Stoll, Keenon & Park, LLP, Lexington,
KY.
EDWARD F. O’CONNOR, Avyno Law, P.C., Encino, CA,
argued for defendant-appellant. Also represented by
JENNIFER HERBST HAMILTON.
ANDREW J. PINCUS, Mayer Brown LLP, Washington,
DC, argued for amici curiae LG Electronics, Inc., Dell Inc.,
Google Inc., Intel Corporation, L Brands Inc., Newegg
Inc., Ninestar Image Tech Limited, QVC, Inc., Samsung
Electronics Co., Ltd., SAS Institute, Inc., Xilinx, Inc. Also
represented by JAMIE B. BEABER, KFIR LEVY, PAUL
WHITFIELD HUGHES; JAMES SUH, LG Electronics Inc.,
Seoul, Korea; MATTHEW R. HULSE, Intel Corporation,
Santa Clara, CA.
MELISSA N. PATTERSON, Appellate Staff, Civil Divi-
sion, United States Department of Justice, Washington,
DC, argued for amicus curiae United States. Also repre-
sented by BENJAMIN C. MIZER, MARK R. FREEMAN.
BARBARA A. FIACCO, Foley Hoag LLP, Boston, MA, ar-
gued for amici curiae Biotechnology Industry Organiza-
tion, CropLife International. Also represented by SARAH
S. BURG.
MARGRETH BARRETT, University of California-
Hastings College of Law, The Sea Ranch, CA, as amicus
curiae pro se.
FREDERICK M. ABBOTT, Florida State University Col-
lege of Law, Tallahassee, FL, as amicus curiae pro se.
KRISTIN LEIGH YOHANNAN MOORE, Cadwalader, Wick-
ersham & Taft LLP, Washington, DC, for amicus curiae
LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC. 3
American Intellectual Property Law Association. Also
represented by TIHUA HUANG; LISA K. JORGENSON, Ameri-
can Intellectual Property Law Association, Arlington, VA.
MEENAKSHI KALA SARVAIYA, SoCal IP Law Group
LLP, Westlake Village, CA, for amicus curiae Conejo
Valley Bar Association. Also represented by STEVEN C.
SEREBOFF.
NOAH LEIBOWITZ, Simpson Thacher & Bartlett, LLP,
New York, NY, for amicus curiae New York Intellectual
Property Law Association. Also represented by WALTER E.
HANLEY, JR., Kenyon & Kenyon LLP, New York, NY;
DAVID F. RYAN, Croton-On-Hudson, NY.
CHARLES DUAN, Public Knowledge, Washington, DC,
for amici curiae Public Knowledge, Electronic Frontier
Foundation, Open Source Hardware Association, Digital
Right to Repair Coalition, Public Citizen, Inc. Also repre-
sented by MOHAMMED RAZA PANJWANI, SHERWIN SIY; VERA
RANIERI, Electronic Frontier Foundation, San Francisco,
CA.
PETER JAMES WIED, Lee Tran Liang & Wang LLP, Los
Angeles, CA, for amici curiae Quanta Computer, Inc.,
Acer, Inc. Also represented by VINCENT K. YIP.
JOHN R. ALISON III, Winston & Strawn LLP, Washing-
ton, DC, for amici curiae HTC Corp., HTC America, Inc.
Also represented by OWAIS AHMED SIDDIQUI, San Diego,
CA; GINO CHENG, Los Angeles, CA.
CHARLES LIFLAND, O'Melveny & Myers LLP, Los An-
geles, CA, for amicus curiae SK Hynix Inc. Also repre-
sented by SUSAN ROEDER, SUSAN VAN KEULEN, Menlo
Park, CA.
4 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
JAMES R. KLAIBER, Pryor Cashman LLP, New York,
NY, for amicus curiae The Association of the Bar of the
City of New York. Also represented by TIMOTHY P.
HEATON, Troutman Sanders LLP, New York, NY; AARON
LIGOURY JOSEPH PEREIRA, Buchanan Ingersoll & Rooney
PC, New York, NY.
STEVEN A. HIRSCH, Keker & Van Nest, LLP, San
Francisco, CA, for amicus curiae SanDisk Corporation.
Also represented by CHRISTA M. ANDERSON, ROBERT A.
VAN NEST, LEO L. LAM.
ROBERT T. HASLAM, Covington & Burling LLP, Red-
wood Shores, CA, for amicus curiae Texas Instruments,
Inc. Also represented by NATHAN SHAFFER; RANGANATH
SUDARSHAN, Washington, DC.
MATTHEW J. MOORE, Latham & Watkins LLP, Wash-
ington, DC, for amici curiae Costco Wholesale Corp.,
Retail Litigation Center, Inc. Also represented by JAMES
SCOTT BALLENGER, MELISSA ARBUS SHERRY.
PHILLIP R. MALONE, Stanford Law School, Juelsgaard
Intellectual Property and Innovation Clinic, Mills Legal
Clinic, Stanford, CA, for amici curiae American Antitrust
Institute, Jeremy W. Bock, Esq., Irene Calboli, Michael A.
Carrier, Andrew Chin, Samuel Ernst, Shubha Ghosh,
Ariel Katz, Mark A. Lemley, Yvette Joy Liebesman, Brian
J. Love, Mark P. McKenna, Michael J. Meurer, Tyler T.
Ochoa, Mark R. Patterson, Esq., Aaron Perzanowski,
John A. Rothchild, Pamela Samuelson, Sharon K.
Sandeen, Kurt M. Saunders, Christopher B. Seaman,
Katherine J. Strandburg, Jennifer M. Urban, Esq., Ryan
Vacca, Sarah R. Wasserman-Rajec. Also represented by
JEFFREY THEODORE PEARLMAN.
ROBERT ANTHONY SURRETTE, McAndrews, Held &
Malloy, Ltd., Chicago, IL, for amicus curiae Association of
LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC. 5
Medical Device Reprocessors. Also represented by
CHRISTOPHER M. SCHARFF.
WILLIAM DOUGLAS KARI, Arbitech, LLC, Irvine, CA,
for amici curiae Association of Service and Computer
Dealers International, Inc., Owners’ Rights Initiative.
MATTHEW A. LEVY, Computer & Communications In-
dustry Association, Washington, DC, for amicus curiae
Computer & Communications Industry Association.
DANIEL STRINGFIELD, Steptoe & Johnson, LLP, Chica-
go, IL, for amicus curiae Licensing Executive Society
(U.S.A. and Canada), Inc. Also represented by KATHERINE
H. JOHNSON; BRIAN P. O'SHAUGHNESSY, Ratner Prestia,
Washington, DC.
MERRITT BLAKESLEE, The Blakeslee Law Firm, Wash-
ington, DC, for amicus curiae Recycling Times Media
Corporation.
MARK SCHONFELD, Burns & Levinson, LLP, Boston,
MA, for amicus curiae Imaging Supplies Coalition. Also
represented by SARA BECCIA.
GARRARD R. BEENEY, Sullivan & Cromwell LLP, New
York, NY, for amicus curiae Dolby Laboratories, Inc. Also
represented by ADAM R. BREBNER.
ROBERT P. TAYLOR, Arnold & Porter, LLP, San Fran-
cisco, CA, for amicus curiae Intellectual Property Owners
Association. Also represented by HERBERT CLARE
WAMSLEY, JR., Intellectual Property Owners Association,
Washington, DC; KEVIN H. RHODES, 3M Innovative Prop-
erties Company, St. Paul, MN; PHILIP STATON JOHNSON,
Johnson & Johnson, New Brunswick, NJ.
6 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
JOHN D. HAYNES, Alston & Bird LLP, Atlanta, GA, for
amici curiae Nokia Technologies OY, Nokia USA Inc.
KATHI A. COVER, iBiquity Digital Corporation, Colum-
bia, MD, for amicus curiae iBiquity Digital Corporation.
JOSEPH S. CIANFRANI, Knobbe, Martens, Olson &
Bear, LLP, Irvine, CA, for amicus curiae Medical Device
Manufacturers Association. Also represented by KENT N.
SHUM.
ROGER BROOKS, Cravath Swaine & Moore LLP, New
York, NY, for amicus curiae Qualcomm Incorporated. Also
represented by DAVID J. KAPPOS.
JOHN NILSSON, Arnold & Porter LLP, Washington,
DC, for amicus curiae Pharmaceutical Research and
Manufacturers of America. Also represented by KRISTAN
LYNN LANSBERY, SAMUEL DREZDZON; WILLOW WHITE
NOONAN, San Francisco, CA.
THEODORE LAWRENCE FIELD, South Texas College of
Law, Houston, TX, as amicus curiae pro se.
DAVID S. STEUER, Wilson, Sonsini, Goodrich & Rosati,
PC, Palo Alto, CA, for amicus curiae InterDigital, Inc.
Also represented by MICHAEL BRETT LEVIN, MAURA L.
REES.
SETH DAVID GREENSTEIN, Constantine Cannon LLP,
Washington, DC, for amici curiae International Imaging
Technology Council, Auto Care Association, Automotive
Parts Remanufacturers Association.
______________________
Before PROST, Chief Judge, NEWMAN, LOURIE, DYK,
MOORE, O’MALLEY, REYNA, WALLACH, TARANTO, CHEN,
HUGHES, and STOLL, Circuit Judges.
LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC. 7
Opinion for the court filed by Circuit Judge TARANTO, in
which Chief Judge PROST and Circuit Judges NEWMAN,
LOURIE, MOORE, O’MALLEY, REYNA, WALLACH, CHEN, and
STOLL join.
Dissenting opinion filed by Circuit Judge DYK, in which
Circuit Judge HUGHES joins.
TARANTO, Circuit Judge.
Congress has declared: “Except as otherwise provided
in [the Patent Act], whoever without authority makes,
uses, offers to sell, or sells any patented invention, within
the United States or imports into the United States any
patented invention during the term of the patent therefor,
infringes the patent.” 35 U.S.C. § 271(a); see id. § 154(a)
(granting patentee “right to exclude others” from itemized
actions). The doctrine of patent exhaustion (or “first sale”
doctrine) addresses the circumstances in which a sale of a
patented article (or an article sufficiently embodying a
patent), when the sale is made or authorized by the
patentee, confers on the buyer the “authority” to engage
in acts involving the article, such as resale, that are
infringing acts in the absence of such authority. There is
nothing “otherwise provided” on the issue in the Patent
Act. In that respect, the Patent Act differs from the
Copyright Act, whose infringement, importation, and
exclusive-rights provisions, 17 U.S.C. §§ 501, 602, 106, are
all subject to a separate, overriding statutory provision
that grants owners of certain copyrighted articles a right
to sell those articles “without the authority” of the copy-
right holder, id. § 109(a).
In this case, all of the initial sales at issue were made
by the U.S. patentee, rather than by a licensee having
authorization from the patentee. Some of the initial sales
were made domestically, some abroad. All of the domestic
sales, and an unknown portion of the foreign sales, were
accompanied by clearly communicated restrictions on the
buyer’s reuse and resale.
8 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
We decided to hear this case en banc to consider
whether two decisions of this court concerning the uncodi-
fied doctrine of patent exhaustion—one decision from
1992, the other from 2001—remain sound in light of later
decisions of the Supreme Court. Today we reaffirm the
principles of our earlier decisions.
First, we adhere to the holding of Mallinckrodt, Inc. v.
Medipart, Inc., 976 F.2d 700 (Fed. Cir. 1992), that a
patentee, when selling a patented article subject to a
single-use/no-resale restriction that is lawful and clearly
communicated to the purchaser, does not by that sale give
the buyer, or downstream buyers, the resale/reuse author-
ity that has been expressly denied. Such resale or reuse,
when contrary to the known, lawful limits on the authori-
ty conferred at the time of the original sale, remains
unauthorized and therefore remains infringing conduct
under the terms of § 271. Under Supreme Court prece-
dent, a patentee may preserve its § 271 rights through
such restrictions when licensing others to make and sell
patented articles; Mallinckrodt held that there is no
sound legal basis for denying the same ability to the
patentee that makes and sells the articles itself. We find
Mallinckrodt’s principle to remain sound after the Su-
preme Court’s decision in Quanta Computer, Inc. v. LG
Electronics, Inc., 553 U.S. 617 (2008), in which the Court
did not have before it or address a patentee sale at all, let
alone one made subject to a restriction, but a sale made
by a separate manufacturer under a patentee-granted
license conferring unrestricted authority to sell.
Second, we adhere to the holding of Jazz Photo Corp.
v. International Trade Comm’n, 264 F.3d 1094 (Fed. Cir.
2001), that a U.S. patentee, merely by selling or authoriz-
ing the sale of a U.S.-patented article abroad, does not
authorize the buyer to import the article and sell and use
it in the United States, which are infringing acts in the
absence of patentee-conferred authority. Jazz Photo’s no-
exhaustion ruling recognizes that foreign markets under
LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC. 9
foreign sovereign control are not equivalent to the U.S.
markets under U.S. control in which a U.S. patentee’s
sale presumptively exhausts its rights in the article sold.
A buyer may still rely on a foreign sale as a defense to
infringement, but only by establishing an express or
implied license—a defense separate from exhaustion, as
Quanta holds—based on patentee communications or
other circumstances of the sale. We conclude that Jazz
Photo’s no-exhaustion principle remains sound after the
Supreme Court’s decision in Kirtsaeng v. John Wiley &
Sons, Inc., 133 S. Ct. 1351 (2013), in which the Court did
not address patent law or whether a foreign sale should
be viewed as conferring authority to engage in otherwise-
infringing domestic acts. Kirtsaeng is a copyright case
holding that 17 U.S.C. § 109(a) entitles owners of copy-
righted articles to take certain acts “without the authori-
ty” of the copyright holder. There is no counterpart to
that provision in the Patent Act, under which a foreign
sale is properly treated as neither conclusively nor even
presumptively exhausting the U.S. patentee’s rights in
the United States.
BACKGROUND
The relevant facts are set forth in the limited record
that the parties agreed was determinative of the result.
Lexmark International, Inc. makes and sells printers as
well as toner cartridges for its printers. Lexmark owns a
number of patents that cover its cartridges and their use.
The cartridges at issue here were first sold by Lexmark,
some abroad and some in the United States. Some of the
foreign-sold cartridges and all of the domestically sold
cartridges at issue were sold, at a discount, subject to an
express single-use/no-resale restriction. Impression
Products, Inc. later acquired the cartridges at issue in
order to resell them in the United States—the restricted
ones after a third party physically modified them to
enable re-use in violation of the single-use/no-resale
restriction. Impression has resold the patented Lexmark
10 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
cartridges at issue in the United States, and has imported
those it acquired abroad. In each case, it has acted with-
out affirmative authorization from Lexmark and, for the
restricted cartridges, in violation of the express denial of
authorization to engage in resale and reuse. Impression’s
actions infringe under 35 U.S.C. § 271—unless the fact
that Lexmark initially sold the cartridges constitutes the
grant of authority that makes Impression’s later resale
and importation non-infringing under the doctrine of
exhaustion. Whether Lexmark’s initial sales have that
effect raises two questions—one regarding the single-
use/no-resale restricted sales (wherever they occur), the
other regarding the initial foreign sales of all cartridges,
whether restricted or not.
A
Lexmark offers buyers a choice. A buyer may pur-
chase a “Regular Cartridge” at full price, in which case
the buyer is not subject to any sale terms restricting reuse
or resale of the cartridge. Alternatively, a buyer may
purchase a “Return Program Cartridge” at a discount of
roughly 20 percent, subject to a single-use/no-resale
restriction: the buyer may not reuse the cartridge after
the toner runs out and may not transfer it to anyone but
Lexmark once it is used, i.e., the buyer must “return” the
cartridge “only” to Lexmark. J.A. 2559. 1 Lexmark and
Impression stipulated in this case that the reduced price
“reflects the value of the property interest and use rights
conveyed to the purchaser under the express terms of the
conditional sale contract and conditional single-use li-
1 At oral argument, noting a reason the arrange-
ment was not a lease, Lexmark stated that a Return
Program Cartridge buyer is not absolutely required to
return the cartridge to Lexmark. The restriction bars
each of two acts: reusing the cartridge; transferring it to
anyone else.
LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC. 11
cense conferred by Lexmark.” Id. The stipulation adds
that “Lexmark has an express and enforceable contractu-
al agreement with each of its end-user customers.” J.A.
2562. And it is undisputed that all end users receive
adequate notice of the restriction supporting the dis-
counted price before they make their purchases.
The distinctness of the options for buyers, which pro-
duce different revenues for Lexmark, is not just a matter
of different terms of sale. It also is reflected in a micro-
chip in the cartridges that, among other things, communi-
cates with the printer. For a Return Program cartridge,
the chip and printer, by monitoring toner levels, prevent
use of a refilled cartridge. For a Regular cartridge, the
toner can be replenished and the cartridge reused. J.A.
2559–60. “To circumvent this technological measure,”
however, “third parties have ‘hacked’ Lexmark’s micro-
chips and created their own ‘unauthorized replacement’
microchips” that, when installed in a Return Program
cartridge, fool the printer into allowing reuse of that
cartridge. J.A. 2560. It is undisputed that various com-
panies gather spent cartridges, replace the microchips,
refill and “remanufacture” the cartridges, and sell them to
resellers like Impression for marketing to consumers for
use with Lexmark printers.
Lexmark sells its cartridges in two channels of distri-
bution. It sells directly to end users, and it sells to “re-
sellers” (including wholesalers, dealers, and distributors).
Lexmark offers the options of Return Program and Regu-
lar cartridges in both channels; the resellers pay less for
the Return Program cartridges; and the single-use/no-
resale restriction applies to the resale by resellers. J.A.
2564. There is no dispute about the adequacy of notice to
resellers as well as end users or the binding nature of the
Lexmark-reseller agreements. J.A. 2562–64. When
Lexmark sells its cartridges to end users, that sale is the
first sale; when it sells to resellers, that sale is the first
12 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
sale. When a reseller subsequently sells to end users,
that sale is not the first sale.
B
Lexmark sued Impression, among other companies,
for infringement under 35 U.S.C. § 271. It alleged that
Impression acquires spent cartridges, including some
Return Program cartridges that have been altered by chip
replacement and toner refilling, then sells them in the
United States and, for the foreign-bought ones, imports
them into the United States. 2 For a large number of
patents directly covering the cartridges, Lexmark alleged
direct infringement under § 271(a). For a few patents
that only the end user directly infringes, Lexmark alleged
that Impression is liable for contributory infringement
under § 271(c). The operative complaint states the in-
fringement allegations in a single count (Count I), cover-
ing past and continuing activity.
More specifically, the infringement allegations are
limited to two groups of cartridges. One group consists of
Return Program cartridges that Lexmark sold in the
United States under the restriction denying authority for
resale and reuse. As it later made clear, Lexmark did not
allege infringement by Impression’s actions involving
Regular cartridges Lexmark had first sold domestically.
J.A. 1895–97, 2557. The second group consists of all
cartridges that Lexmark sold abroad, including Return
Program and Regular cartridges. It is undisputed that
Lexmark never granted anyone permission to import
2 Lexmark has not argued to us that the chip re-
placement and ink replenishment result in new articles,
which would be outside the scope of the exhaustion doc-
trine. See Aro Mfg. Co. v. Convertible Top Replacement
Co., 365 U.S. 336, 346 (1961) (Aro I).
LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC. 13
those cartridges into, or sell or use them in, the United
States.
C
The litigation progressed to the point at which no de-
fendant remained except Impression, and only the single
count of infringement remained against Impression.
Impression came to agree that the patents covered the
cartridges it was importing and selling, and it did not
dispute the validity or enforceability of the patents. It
contested liability for infringement on just one ground,
namely, that Lexmark had exhausted its U.S. patent
rights in the cartridges by its initial sales of them.
Three defining aspects of Impression’s contention to
the district court, and presentation to us, are worth
noting here, because they narrow our focus. First, we
discuss only Lexmark’s sales to end users (and the resales
and reuses deriving from those sales), because neither
party has made an argument for distinguishing
Lexmark’s sales to resellers. Second, we take as a prem-
ise that both the first purchaser and Impression as a re-
purchaser had adequate notice of the single-use/no-resale
restriction before they made their purchases; the adequa-
cy of that notice is unchallenged. Thus, we do not have
before us the questions that would arise, whether under
principles governing bona fide purchasers or otherwise, if
a downstream re-purchaser acquired a patented article
with less than actual knowledge of such a restriction.
Third, Impression has not contended that the particular
restriction at issue gives rise to a patent-misuse defense,
constitutes an antitrust violation, or exceeds the scope of
the Patent Act’s express grant of exclusive rights over
patented articles, 35 U.S.C. §§ 154, 271. Rather, Impres-
sion contends that, although there is no other illegality or
breach of statutory limits identified, the single-use/no-
resale restriction is to be disregarded for exhaustion
purposes. According to Impression, it has the authority to
14 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
resell despite the known denial of such authority by
Lexmark for the Return Program cartridges.
Impression presented its exhaustion defense by filing
motions to dismiss the infringement count, one motion for
each of the two groups of cartridges at issue. For each
motion, Impression did not contest that, under this court’s
governing law, its exhaustion defense must fail: Mallinck-
rodt for the cartridges initially sold in the United States,
Jazz Photo for the cartridges initially sold abroad. But it
argued that the Supreme Court’s more recent decisions
had made Mallinckrodt and Jazz Photo no longer good
law. In a pair of opinions issued the same day, the dis-
trict court agreed with Impression about Mallinckrodt but
disagreed about Jazz Photo.
1
The district court granted Impression’s motion to
dismiss Lexmark’s claim of infringement involving the
single-use cartridges Lexmark had first sold in the United
States. Lexmark Int’l, Inc. v. Ink Techs. Printer Supplies,
LLC, No. 1:10-CV-564, 2014 WL 1276133 (S.D. Ohio Mar.
27, 2014) (Domestic Sale Opinion), modified at J.A. 34–35
based on a joint stipulation of the parties, J.A. 2554–66.
Like Impression, the court recognized that there is no
exhaustion here under this court’s decision in Mallinck-
rodt, which rejected an exhaustion defense in circum-
stances similar to those presented here—namely, where a
patentee sold a patented article subject to an otherwise-
unobjectionable single-use restriction. Id. at *4, *6. And
the court recognized this court’s post-Mallinckrodt deci-
sions as reiterating that a “ ‘conditional sale’ ” of that type
does not cause exhaustion of the patentee’s preserved
rights in the article. Id. at *4, *6 (quoting Princo Corp. v.
Int’l Trade Comm’n, 616 F.3d 1318, 1328 (Fed. Cir. 2010)
(en banc)).
In nevertheless finding exhaustion here, the district
court examined a number of Supreme Court decisions on
LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC. 15
patent exhaustion. It noted the Court’s explanation in
Bloomer v. McQuewan, 55 U.S. (14 How.) 539, 549–50
(1853), that a patentee’s grant of a license to another to
make and sell a patented article is not the same thing as
the patentee’s sale of the article itself. Domestic Sale
Opinion, 2014 WL 1276133, at *3. It noted, too, the
Court’s rejection of an exhaustion defense in General
Talking Pictures Corp. v. Western Electric Co., 304 U.S.
175, opinion on rehearing at 305 U.S. 124 (1938), which
held that a buyer of a patented article infringed when it
used the article in a way forbidden by a known use re-
striction, having bought the article from a manufacturer
licensed by the patentee to make and sell the article only
to buyers who complied with the use restriction. Domestic
Sale Opinion, 2014 WL 1276133, at *3. The district court
also noted that the Supreme Court in Quanta found
exhaustion where “the Supreme Court determined that
the agreements [at issue] broadly authorized Intel [the
seller] to sell the licensed products without restrictions or
conditions.” Id. at *5 (emphasis added).
Despite that recognition of what Quanta involved, the
district court concluded “that Quanta overruled Mallinck-
rodt sub silentio.” Id. at *5, *6. Although Return Pro-
gram cartridges were sold under post-sale restrictions on
reuse and resale, the district court held that “those post-
sale use restrictions do not prevent patent rights from
being exhausted given that the initial sales were author-
ized and unrestricted.” Id. The court thus dismissed the
infringement claim regarding Impression’s actions involv-
ing Return Program cartridges Lexmark had sold in the
United States. Id. at *7.
2
As to cartridges Lexmark had sold abroad, the court
held that exhaustion did not apply, i.e., did not render
Impression’s imports and domestic resales of those car-
tridges non-infringing. Lexmark Int’l, Inc. v. Ink Techs.
16 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
Printer Supplies, LLC, 9 F. Supp. 3d 830 (S.D. Ohio 2014)
(Foreign Sale Opinion). The court recognized, and Im-
pression did not dispute, that “under Jazz Photo, an
initial authorized sale of a patented product outside of the
United States would not exhaust the patent rights of the
patent holder.” Id. at 833. It then examined the Supreme
Court’s decision in Kirtsaeng and rejected Impression’s
contention that Kirtsaeng “overturns the Federal Circuit’s
decision in Jazz Photo, 264 F.3d 1094, such that
Lexmark’s patent rights were exhausted upon the first
authorized sale abroad.” Foreign Sale Opinion, 9 F. Supp.
3d at 834 (footnote omitted).
The court stated that “[t]he Supreme Court’s decision
was rooted in interpretation of a statutory provision of
copyright law,” namely, 17 U.S.C. § 109(a). Foreign Sale
Opinion, 9 F. Supp. 3d at 833. The district court noted
the absence from Kirtsaeng of any discussion of exhaus-
tion in the patent field and the Supreme Court’s
longstanding recognition that copyright law and patent
law are not interchangeable. Id. at 835 (citing Bobbs-
Merrill Co. v. Straus, 210 U.S. 339, 346 (1908)). It added
that Kirtsaeng “is rooted in statutory and legislative
interpretation of section 109(a) of the Copyright Act,” but
“[n]oticeably absent from patent law is a codification of
the exhaustion doctrine,” concluding: “the core statutory
text that weighed in favor of a non-geographical interpre-
tation is non-existent in the context of patent law.” Id.
The Patent Act, the court concluded, calls for its own
analysis of “context, history and practical considerations.”
Id. at 836.
For those reasons, while recognizing that this court
might reconsider Jazz Photo in light of Kirtsaeng, the
district court held that Jazz Photo remains good law. Id.
at 837–38. The court therefore denied Impression’s
motion to dismiss Lexmark’s claim of infringement involv-
ing the Foreign-Sold Cartridges. Id. at 838.
LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC. 17
3
Soon thereafter, with the parties’ agreement, the
court entered a “Stipulated Final Judgment.” J.A. 1. The
judgment was (a) for Impression (i.e., Impression does not
infringe) as to the Return Program cartridges whose
precursors Lexmark had sold in the United States and (b)
for Lexmark (i.e., Impression infringes) as to cartridges
whose precursors Lexmark had initially sold abroad. Id.
The parties agree that the judgment is final under 28
U.S.C. § 1295(a)(1), even as to cartridges found to in-
fringe.
In agreeing to the final judgment of infringement as
to the foreign-sold cartridges, which remained an open
issue after the Rule 12(b)(6) rulings, Impression reasona-
bly construed the district court’s Jazz Photo ruling to
foreclose its exhaustion defense, even though all the
district court had done was to deny Impression’s request
for judgment in its favor based on that defense. In par-
ticular, the district court’s rationale as to the unavailabil-
ity of exhaustion did not depend on the facts in the record
that Lexmark identifies as suggesting the “regional”
character of its foreign-sold cartridges, facts that there-
fore went unexplored in the district court. And, notably,
when Impression agreed to a judgment of infringement as
to foreign-sold cartridges, it did not preserve an implied-
license defense, even though the Supreme Court made
clear in Quanta the distinctness of implied-license and
exhaustion defenses. 553 U.S. at 637.
D
Impression appealed and Lexmark cross-appealed.
This court has jurisdiction under 28 U.S.C. § 1295(a)(1).
The parties submitted briefs and presented oral argument
to a panel of this court, focused on whether Quanta had
stripped Mallinckrodt of its controlling force and whether
Kirtsaeng had stripped Jazz Photo of its controlling force.
18 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
Shortly after oral argument, this court sua sponte
took the case en banc. Lexmark Int’l, Inc. v. Impression
Prods., Inc., 785 F.3d 565 (Fed. Cir. 2015). We directed
the parties to address the following issues:
(a) The case involves certain sales, made
abroad, of articles patented in the United States.
In light of Kirtsaeng v. John Wiley & Sons, Inc.,
133 S. Ct. 1351 (2013), should this court overrule
Jazz Photo Corp. v. International Trade Commis-
sion, 264 F.3d 1094 (Fed. Cir. 2001), to the extent
it ruled that a sale of a patented item outside the
United States never gives rise to United States
patent exhaustion[?]
(b) The case involves (i) sales of patented arti-
cles to end users under a restriction that they use
the articles once and then return them and (ii)
sales of the same patented articles to resellers
under a restriction that resales take place under
the single-use-and-return restriction. Do any of
those sales give rise to patent exhaustion? In
light of Quanta Computer, Inc. v. LG Electronics,
Inc., 553 U.S. 617 (2008), should this court over-
rule Mallinckrodt, Inc. v. Medipart, Inc., 976 F.2d
700 (Fed. Cir. 1992), to the extent it ruled that a
sale of a patented article, when the sale is made
under a restriction that is otherwise lawful and
within the scope of the patent grant, does not give
rise to patent exhaustion?
Id. at 566.
DISCUSSION
I
The Patent Act’s language defines the framework
within which the two exhaustion questions arise. In
1952, based on pre-existing uncodified understandings,
Congress set forth a statutory prescription of what consti-
LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC. 19
tutes patent “infringement.” See Aro Mfg. Co. v. Convert-
ible Top Replacement Co., 377 U.S. 476, 483–84 (1964)
(Aro II); Aro I, 365 U.S. at 341–42 & n.8. In its current
form, which includes a bar on importation and offers to
sell added by a 1994 enactment, § 271(a) states that,
unless another provision of the Act provides otherwise,
whoever “without authority” during the term of a patent
commits certain acts—“makes, uses, offers to sell, or sells
any patented invention, within the United States or
imports into the United States any patented invention”—
“infringes the patent.” 35 U.S.C. § 271(a).
Section 271(a) connects “make,” “sell,” “use,” and the
other terms with the disjunction “or,” as does the related
provision granting the patentee various rights to exclude
others from the same activities, id. § 154(a). Congress
has thus prescribed that whoever, “without authority,”
does any one of the listed acts—“the making, using,
offering to sell, selling, or importing of a patented inven-
tion,” Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct.
2060, 2065 (2011) (emphasis added)—is an infringer. See
5 Donald S. Chisum, Chisum on Patents § 16.01 (2015)
(“The exclusive rights are disjunctive: one may infringe by
(1) making without selling or using, (2) using without
making or selling or (3) selling without making or using.”)
(footnote omitted); William C. Robinson, The Law of
Patents §§ 903–906 (1890). The government observes:
“Nothing in the text of the Patent Act expressly prevents
a patentee from demanding compensation from each
downstream user or reseller of an article embodying his
invention.” U.S. Br. 5.
Section 271(a)’s language embodies an understanding
of “infringement” that was long recognized even before
Congress enacted § 271 as part of the 1952 recodification
of the patent laws. The pre-1952 statute included a right-
to-exclude provision comparable to § 154, which, in lan-
guage that varied over time, gave the patentee a right to
exclude others (not a right to practice the invention). See
20 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
35 U.S.C. § 40 (1946); Rev. Stat. § 4884; Bauer & Cie. v.
O’Donnell, 229 U.S. 1, 9–10 (1913); 5 Chisum § 16.02[1].
But while the pre-1952 statute provided for actions for
“infringement,” e.g., 35 U.S.C. §§ 67, 70 (1948); Rev. Stat.
§§ 4919, 4921, there was no provision prescribing what
constitutes infringement. Nevertheless, the courts con-
sistently understood infringement to mean what § 271
came to say—committing the identified acts without
authority (synonymously, without consent or permission):
“The infringement of a patent, being the invasion of this
exclusive right, therefore consists in the manufacture,
use, or sale of the invention protected by the patent
within the area and time described in the patent, by any
person not duly authorized to do so by the patentee.”
Robinson, § 890, at 43–44 (emphasis added); see 3 Antho-
ny William Deller, Walker on Patents § 450, at
1681 (1937) (“An infringement is the unauthorized mak-
ing or using or selling of the patented invention.”). 3 Thus,
the 1952 Act’s “without authority” language simply codi-
fies an authority requirement long recognized to be the
meaning of “infringement” of the enumerated rights to
exclude. See Warner-Jenkinson Co. v. Hilton Davis Chem.
Co., 520 U.S. 17, 26–27 (1997) (§ 271(a) left direct-
infringement law intact); Aro II, 377 U.S. at 483; Aro I,
365 U.S. at 342; Giles S. Rich, Infringement Under Section
271 of the Patent Act of 1952, 21 Geo. Wash. L. Rev. 521,
537 (1953).
3 See, e.g., Global-Tech Appliances, Inc., 131 S. Ct.
at 2065 n.2; General Talking Pictures, 304 U.S. at 181–82;
Crown Die & Tool Co. v. Nye Tool & Mach. Works, 261
U.S. 24, 38 (1923); Geneva Furniture Mfg. Co. v. S.
Karpen & Bros., 238 U.S. 254, 257 (1915); Cantrell v.
Wallick, 117 U.S. 689, 694 (1886); Blake v. Robertson, 94
U.S. 728, 733 (1876); Smith v. Nichols, 88 U.S. (21 Wall.)
112, 118–19 (1875); Bloomer, 55 U.S. (14 How.) at 549.
LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC. 21
The requirement of “authority” in order to avoid in-
fringement, in its natural meaning, refers to a grant of
permission. Logically, permission might come from
Congress, whether outside the Patent Act or within the
Patent Act itself, as reflected in § 271(a)’s “[e]xcept as
otherwise provided in [the Patent Act]” language, which
explicitly bows to other contrary sections of the Patent
Act. But it is undisputed that no other statutory provi-
sion applies in this case. See U.S. Br. 5; compare 35
U.S.C. § 262 (each joint owner of a patent may engage in
making, using, selling, offering to sell, and importing
without authority from other owners). Nothing in the Act
supersedes the § 271 requirement of authority from the
patentee before a person in Impression’s position may
engage in the itemized acts without infringing.
In this respect, the Patent Act differs from the Copy-
right Act. In the copyright statute, Congress included a
provision giving a right of sale to certain article owners,
17 U.S.C. § 109(a), and made the infringement, importa-
tion, and exclusive-rights provisions all subservient to
that express guarantee. 4 The Patent Act does not contain
4 17 U.S.C. § 501(a) defines “an infringer of the cop-
yright” as “[a]nyone who violates any of the exclusive
rights of the copyright owner as provided by sections 106
through 122.” Section 106 gives the copyright owner “the
exclusive rights to do and to authorize” certain actions,
such as making copies and “distribut[ing] copies or
phonorecords of the copyrighted work to the public by sale
or other transfer of ownership,” id. § 106(1), (3), but it
declares that those rights are “[s]ubject to sections 107
through 122”—hence to section 109(a). Similarly, § 602(a)
declares importation to be “an infringement of the exclu-
sive right to distribute copies or phonorecords under
section 106, actionable under section 501.” Section 602
makes the importation bar subservient to § 109(a) by
22 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
a congressionally prescribed exhaustion rule, let alone a
provision that makes the express definition of infringe-
ment and rights to exclude (both of which now encompass
importation) subservient to any congressionally expressed
exhaustion rule. 5
In the Patent Act, then, as relevant here, it is a con-
ferral of “authority” by the patentee that is needed in
order for the actions listed in § 271(a) not to constitute
infringement. As the government says, noting the paral-
lelism of § 271(a) and the § 154(a) grant of rights to
exclude, what § 271(a) means is that “[w]hoever does any
of these acts ‘without authority’ from the patentee infring-
es the patent.” U.S. Br. 1 (emphasis added). In brief:
§ 271(a) by its terms requires that whoever engages in the
enumerated acts receive permission from the patentee
(directly or indirectly) for the acts being performed, which
otherwise are infringing; and nothing in § 271(a) con-
strains the patentee’s choices about whom to grant the
required authority, if anyone, or about which acts (of
manufacture, use, sale, etc.) to authorize, if any.
Congress defines the existence and scope of patent
rights. See, e.g., Octane Fitness, LLC v. ICON Health &
Fitness, Inc., 134 S. Ct. 1749, 1755–56 (2014); Crown Die
making it subservient to the § 106(3) right, which in turn
is subservient to § 109(a), as the Supreme Court held in
Quality King Distributors, Inc. v. L’anza Research Inter-
national, Inc., 523 U.S. 135, 145 (1998), and reiterated in
Kirtsaeng, 133 S. Ct. at 1354–55.
5 Since 1999 Congress has provided a prior-use de-
fense to infringement in certain circumstances and, in so
doing, given a sale or disposition by a person having a
prior-use defense the same exhaustion effect as a sale or
disposition by a patent owner. See 35 U.S.C. § 273(d); id.
§ 273(b)(2) (2006). But Congress has not defined the
underlying patent-exhaustion rule.
LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC. 23
& Tool Co., 261 U.S. at 40; Continental Paper Bag Co. v.
Eastern Paper Bag Co., 210 U.S. 405, 423 (1908). Unless
Congress has directed the courts to fashion governing
rules in a particular statutory context (as in, e.g., the
Sherman Act), “once Congress addresses a subject, even a
subject previously governed by federal common law, the
justification for lawmaking by the federal courts is greatly
diminished. Thereafter, the task of the federal courts is
to interpret and apply statutory law, not to create com-
mon law.” Northwest Airlines, Inc. v. Transp. Workers
Union of Am., 451 U.S. 77, 95 n.34 (1981); see City of
Milwaukee v. Illinois, 451 U.S. 304, 315 (1981) (“Our
commitment to the separation of powers is too fundamen-
tal to continue to rely on federal common law by judicially
decreeing what accords with common sense and the public
weal when Congress has addressed the problem.”) (inter-
nal quotation marks omitted); Am. Elec. Power Co. v.
Connecticut, 131 S. Ct. 2527, 2537 (2011).
If ordinary congressional supremacy is to be respect-
ed, exhaustion doctrine in the Patent Act must be under-
stood as an interpretation of § 271(a)’s “without authority”
language. And so it has been understood: some sales
confer authority on the purchaser to take certain ac-
tions—such as selling or using the purchased article in
the United States or importing it into the United States—
that would otherwise be infringing acts. See 5 Chisum
§ 16.03[2][a], at 16-362.8; U.S. Br. 1 (tying exhaustion to
“authority” language of § 271(a)). We decide here (a)
whether a sale, even though accompanied by a clearly
communicated and otherwise-lawful denial of such au-
thority, nonetheless has the legal effect of conferring such
authority and (b) whether a foreign sale has the legal
effect of conferring such authority where (as we must
assume at present in this case) neither a grant nor a
24 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
reservation of § 271(a) rights was communicated to the
purchaser before the foreign sale. 6
II
The Mallinckrodt issue has been framed for us in
clear terms. Suppose that Lexmark had granted another
firm a nonexclusive license to make and sell Return
Program cartridges. It is undisputed and clear under
Supreme Court precedent—most prominently, the 1938
decision in General Talking Pictures—that Lexmark
would not have exhausted its patent rights in those
6 Before 1952, the patent statute provided that
“[e]very person who purchases of the inventor, . . . or with
his knowledge and consent constructs any newly invent-
ed . . . machine, or other patentable article, prior to the
application by the inventor . . . for a patent, or who sells
or uses one so constructed, shall have the right to use, and
vend to others to be used, the specific thing so made or
purchased, without liability therefor.” 35 U.S.C. § 48
(1946); Rev. Stat. § 4899. That provision dated from 1870;
a broader version (from 1839) did not depend on purchase
from the inventor or construction with the inventor’s
knowledge and consent. See Dable Grain Shovel Co. v.
Flint, 137 U.S. 41, 42 (1890). The pre-1952 provision was
viewed as a species of “implied license.” 3 Walker on
Patents § 451, at 1682–83; Robinson, § 917, at 88.
The Patent Act of 1952 repealed the provision, the
House Report briefly explaining that it was “[r]edundant
and unnecessary.” H.R. Rep. No. 82-1923, at 72 (1952).
No argument for the significance of the repeal has been
made to us—perhaps because (1) the provision did not
depend on a sale; (2) it involved (pre-patent) conduct
viewed as giving an “implied license,” which the Court has
distinguished from “exhaustion,” Quanta, 553 U.S. at 637;
and (3) it was not authoritatively construed to apply even
to sales subject to authority-denying restrictions.
LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC. 25
cartridges, upon the manufacturing licensee’s sale (the
first sale), if a buyer with knowledge of the restrictions
resold or reused them in violation of the restrictions.
Impression and the government contend that a different
result is required—that Lexmark automatically lost its
patent rights—simply because Lexmark sold the Return
Program cartridges itself, subject to the same communi-
cated restriction, rather than having left the manufacture
and sale to others under license. See U.S. Br. 7, 8, 10, 11
(case turns on distinction between patentee sale and non-
patentee licensee sale). (Impression has left the en banc
briefing on this issue largely to the government.)
We conclude otherwise, as we did in Mallinckrodt and
subsequent decisions. A sale made under a clearly com-
municated, otherwise-lawful restriction as to post-sale use
or resale does not confer on the buyer and a subsequent
purchaser the “authority” to engage in the use or resale
that the restriction precludes. And there is no sound
reason, and no Supreme Court precedent, requiring a
distinction that gives less control to a practicing-entity
patentee that makes and sells its own product than to a
non-practicing-entity patentee that licenses others to
make and sell the product.
A
Mallinckrodt involved a patentee’s sale of its medical
device to hospitals, subject to a “single use only” re-
striction. The device consisted of a nebulizer and associ-
ated components for delivering to a patient, for diagnosis
or treatment of lung diseases, a mist of radioactive or
therapeutic material. It also trapped radioactive or toxic
material when the patient exhaled. Mallinckrodt sold it
under the single-use condition and with instructions for
post-use disposal in a lead-shielded container. But some
hospital purchasers instead sent used devices to Medipart
for reconditioning and for replacement of certain compo-
26 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
nents. When Mallinckrodt sued Medipart for direct and
indirect infringement by virtue of the reuse in violation of
the single-use restriction, the district court granted
Medipart summary judgment of non-infringement, con-
cluding that Mallinckrodt’s sale of the devices exhausted
its ability to assert its patent rights in the units sold. 976
F.2d at 701–02.
This court reversed. Id. at 709. The court stated its
ruling: “The restriction here at issue does not per se
violate the doctrine of patent misuse or the antitrust law.
Use in violation of a valid restriction may be remedied
under the patent law, provided that no other law prevents
enforcement of the patent.” Id. at 701.
In explanation, the court observed that the patent
grant of § 154 is a “right to exclude,” which “may be
waived in whole or in part,” “subject to patent, contract,
antitrust, and any other applicable law, as well as equita-
ble considerations such as are reflected in the law of
patent misuse.” Mallinckrodt, 976 F.2d at 703. It noted
that the Supreme Court had held that two particular
types of restrictions in sales exceeded the legitimate scope
of patent rights, so that the patentee did not retain its
patent rights against a buyer’s sale or use of a patented
article in violation of those particular conditions: resale-
price-maintenance conditions, Bauer, 229 U.S. 1; Straus
v. Victor Talking Machine Co., 243 U.S. 490 (1917); Bos-
ton Store of Chicago v. American Graphophone Co., 246
U.S. 8 (1918), and tying arrangements requiring use of
non-patented articles with the patented one, Motion
Picture Patents Co. v. Universal Film Mfg. Co., 243 U.S.
502 (1917). Mallinckrodt, 976 F.2d at 704. The Mallinck-
rodt court explained that those cases “did not hold, and it
did not follow, that all restrictions accompanying the sale
of patented goods were deemed illegal.” Id.
LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC. 27
The court then described the key Supreme Court
precedent, General Talking Pictures. As the Mallinckrodt
court observed, in General Talking Pictures “the patentee
had authorized the licensee to make and sell amplifiers
embodying the patented invention for a specified use
(home radios),” and “[t]he defendant had purchased the
patented amplifier from the manufacturing licensee, with
knowledge of the patentee’s restriction on use,” but used
it contrary to the restriction. Id. at 705. The Supreme
Court held that the defendant was liable for infringement;
it “observed that a restrictive license to a particular use
was permissible, and treated the purchaser’s unauthor-
ized use as infringement of the patent.” Id. This court
noted that the Supreme Court in General Talking Pictures
“did not decide the situation where the patentee was the
manufacturer” and seller. Id. This court then held that
to distinguish the patentee sale (at issue in Mallinckrodt)
from the licensee sale (at issue in General Talking Pic-
tures) would be to make “formalistic distinctions of no
economic consequence.” Id.
Finally, the court described “a group of cases in which
the Supreme Court considered and affirmed the basic
principles that unconditional sale of a patented device
exhausts the patentee’s right to control the purchaser’s
use of the device; and that the sale of patented goods, like
other goods, can be conditioned.” Id. at 706. This court
noted that, insofar as several cases ruling against patent-
ees’ claims discussed or involved sales, the sales were not
made under restrictions as to use. Id. at 707 (discussing
Bloomer, 55 U.S. (14 How.) 539; Adams v. Burke, 84 U.S.
(17 Wall.) 453 (1873); Keeler v. Standard Folding Bed Co.,
157 U.S. 659 (1895)). The court also noted the statement
in Mitchell v. Hawley that “[s]ales of the kind may be
made by the patentee with or without conditions,” 83 U.S.
(16 Wall.) 544, 548 (1873), and the holding of Mitchell
that a purchaser of a patented machine “licensed for use
28 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
only during the original term of the patent” was liable for
infringement for using the machine past that term when
the patent term was extended. 976 F.2d at 707.
The court in Mallinckrodt concluded that “[u]nless the
condition violates some other law or policy (in the patent
field, notably the misuse or antitrust law, e.g., United
States v. Univis Lens Co., 316 U.S. 241 (1942)), private
parties retain the freedom to contract concerning condi-
tions of sale.” 976 F.2d at 708. Thus, unless a sale re-
striction is improper under some other body of law,
whether within the Patent Act or outside it, a patentee’s
own sale of its patented article subject to a clearly com-
municated restriction does not confer authority to sell or
use the article in violation of that restriction, i.e., does not
exhaust the patentee’s § 271 rights against such conduct
involving that article. Since Mallinckrodt, we have fol-
lowed that principle. B. Braun Med., Inc. v. Abbott Labs.,
124 F.3d 1419, 1426 (Fed. Cir. 1997); Princo Corp. v. Int’l
Trade Comm’n, 616 F.3d 1318, 1328 (Fed. Cir. 2010) (en
banc).
B
The district court concluded in this case that Quanta
overturned the Mallinckrodt rule as to a patentee’s sale of
a patented article subject to a clearly communicated
single-use/no-resale restriction. But no issue as to such a
sale was presented for decision or decided in Quanta. And
the Supreme Court in Quanta did not address the distinc-
tion between patentee sales and licensee sales on which
the argument for overturning Mallinckrodt rests.
Quanta did not involve a patentee’s sale at all, let
alone one subject to a restriction or, more particularly, a
single-use/no-resale restriction. Quanta involved a sale
made (to computer maker Quanta) not by the patentee
(LGE) but by a manufacturing licensee (chip maker Intel),
which the patentee had authorized to make and sell the
LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC. 29
articles at issue (chips for installation in computers that
would then be covered by LGE’s patents). 553 U.S. at
623–25. And the patentee’s authorization to the licensee
to make (the first) sales was not subject to any conditions,
much less conditions to be embodied in those sales. Id. at
636–38. While Intel had certain other contractual obliga-
tions to LGE regarding notice to Intel’s purchasers, nei-
ther party contended that Intel breached those
obligations, and in any event, the Court repeatedly stated
that the relevant LGE-Intel contract gave Intel an unre-
stricted authorization to sell the articles. Id. at 636–37
(“Intel’s authority to sell its products embodying the LGE
Patents was not conditioned on the notice or on Quanta’s
decision to abide by LGE’s directions in that notice.”); id.
at 637 (“The License Agreement authorized Intel to sell
products that practiced the LGE Patents. No conditions
limited Intel’s authority to sell products substantially
embodying the patents.”); id. at 638 (“Nothing in the
License Agreement limited Intel’s ability to sell its prod-
ucts practicing the LGE Patents.”).
In short, Quanta did not involve the issue presented
here. The facts defining the issues for decision, and the
issues decided, were at least two steps removed from the
present case. There were no patentee sales, and there
were no restrictions on the sales made by the licensee.
The two main issues decided by the Court in Quanta
have no bearing on the issue of restricted sales by a
patentee. The Court decided that exhaustion applies to
method claims. Id. at 628–30. And the Court decided
“the extent to which a product must embody a patent in
order to trigger exhaustion.” Id. at 630; see id. at 630–35.
Only the third issue addressed by the Court in Quan-
ta concerns restrictions on sales—though not patentees’
sales—and the Court’s discussion of that issue does not
undermine Mallinckrodt’s ruling that a patentee can
30 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
preserve its patent rights through restrictions on its sales.
As just described, when LGE invoked precedent such as
General Talking Pictures that make clear that patentees
are able to preserve their patent rights through re-
strictions on the sales they authorizes licensees to make,
Quanta, 553 U.S. at 636, the Court’s response was to
conclude that there simply were no such restrictions on
LGE’s grant to Intel of the authority to sell. Id. at 636–
38. The Court thus had prominently in view the principle
that, through at least one path, a patentee can reserve its
patent rights through sale restrictions. The Court found
the principle inapplicable to the case before it because of
the absence of any restriction, and the Court said nothing
to cast doubt on the principle. Indeed, the Court indirect-
ly underscored the principle when it quoted Motion Pic-
ture Patents as stating “the rule” of exhaustion in terms
expressly based on an “ ‘unconditional sale.’ ” Quanta, 553
U.S. at 626 (quoting Motion Picture Patents, 243 U.S. at
516). And the Court did not consider whether or decide
that the principle was limited to contracted-out, as distin-
guished from in-house, manufacturing and sales, or even
recognize and discuss such a distinction.
Inferring disapproval of Mallinckrodt by the Supreme
Court in Quanta is unwarranted for another reason. The
decision of this court under review in Quanta relied
centrally on Mallinckrodt and its successor case, B. Braun
Medical. See LG Elecs., Inc. v. Bizcom Elecs., Inc., 453
F.3d 1364, 1370 (Fed. Cir. 2006). In the Supreme Court,
the government prominently featured an argument that
Mallinckrodt was incorrect and should be repudiated,
U.S. Amicus Brief at 18–24, Quanta (No. 06-937), 2007
WL 3353102, and Quanta presented similar criticisms of
Mallinckrodt, Brief for Petitioner at 13, 30–33, Quanta
(No. 06-937), 2007 WL 3276505. Yet the Supreme Court
said nothing about Mallinckrodt or B. Braun Medical.
The evident explanation is that, at a minimum, no ques-
LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC. 31
tion was presented for decision—or was being decided—as
to the effect a restriction on the first sale, whether made
by a patentee or by a manufacturing licensee, would have
on preservation of § 271 rights.
C
For the foregoing reasons, the challenge to Mallinck-
rodt in the present case cannot rest on what the Supreme
Court in Quanta ruled about the issues it said it was
addressing or the facts and issues presented for decision.
The challenge asserts that any post-sale restriction in a
patentee’s own sale fails, as a matter of law, to preserve
the patentee’s § 271 rights against unauthorized sales or
uses. The argument rests ultimately on language the
Court used in Quanta in introducing the exhaustion
doctrine before defining the specific issues for decision—
as it has done elsewhere.
The Court in Quanta said: “The longstanding doctrine
of patent exhaustion provides that the initial authorized
sale of a patented item terminates all patent rights to
that item.” 553 U.S. at 625. More recently, the Court
used similar “authorized sale” language in introducing the
exhaustion doctrine in Bowman v. Monsanto Co., which
held that a patentee, by selling patented seeds, does not
lose its § 271 right to prevent the buyer from making new
seeds. The Court said: “Under the doctrine of patent
exhaustion, the authorized sale of a patented article gives
the purchaser, or any subsequent owner, a right to use or
resell that article.” 133 S. Ct. 1761, 1764 (2013). See also,
e.g., Univis, 316 U.S. at 249 (“authorized sale”); Dissent at
3–5.
The challenge to Mallinckrodt asserts that any sale of
a patented article by a patentee, even when the rights
granted are expressly restricted, is automatically an
“authorized sale,” causing the patentee to lose all § 271
rights in the item sold. That consequence follows, the
32 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
argument goes, no matter how clearly the patentee states
an otherwise-lawful restriction on what authority is being
conferred and what authority is being withheld. In this
view, exhaustion law embodies a sharp distinction be-
tween a sale by a patentee (for which restrictions are to be
disregarded) and a sale made by another person author-
ized by the patentee to sell, i.e., a licensee as in General
Talking Pictures (for which a patentee may preserve its
§ 271 rights by restricting the licensee’s authorized sales).
That is an extraordinary doctrinal consequence to find
established by the Supreme Court’s use of the phrase
“authorized sale.” No one suggests that Bowman (con-
cerning new articles) intended such consequences. And
there are good reasons not to find any such implied mean-
ing in Quanta either.
1
Most obviously, as discussed above, the Court was not
addressing the patentee-sale/licensee-sale distinction.
Among other things, the Court did not consider the issues
presented by making such a distinction, such as where
the line would sensibly be drawn along the spectrum that
includes original patentees, assignees, exclusive licensees,
and non-exclusive licensees. Such distinctions matter for
determining who may bring infringement suits, but they
can involve detailed inquiries into the contractual rela-
tionships between an original patent owner and others
(here, a first seller), based on information a buyer may
have no ability or reason to acquire. See, e.g., Independ-
ent Wireless Telegraph Co. v. Radio Corp. of Am., 269 U.S.
459, 464–69 (1926); Crown Die & Tool, 261 U.S. at 40–41;
E.W. Bliss Co. v. United States, 253 U.S. 187, 192 (1920);
Pope Mfg. Co. v. Gormully & Jeffery Mfg. Co., 144 U.S.
248 (1892); Waterman v. Mackenzie, 138 U.S. 252, 255–56
(1891); 8 Chisum § 21.03. Nothing in Quanta suggests
that the Court either considered such issues or intended
LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC. 33
to build such inquiries into the exhaustion doctrine by
making the distinction the government now urges.
2
One cannot infer the contrary from the immediate
context of the “authorized sale” phrase, i.e., from the
several decisions that Quanta briefly describes in the
paragraph it introduces with the “authorized sale” short-
hand. 553 U.S. at 625. Those decisions did not involve
restricted patentee sales of patented articles. And the
Quanta Court, in describing those cases, said nothing to
indicate adoption of a patentee-sale/licensee-sale distinc-
tion.
Thus, Bloomer v. McQuewan identifies no sale of a pa-
tented article as involved in the case. During an initial
patent term, a license granted to the defendants (via
Collins and Smith, then Barnet, then Warner and
McQuewan) the right to make patented machines and use
them “without any limitation as to the time for which
they were to be used.” 55 U.S. (14 How.) at 553; id. at
540–41, 548. When the defendants made and used such
machines, and the patent term was later extended, the
Supreme Court held that the unrestricted right to use did
not end when the earlier patent term ended, because the
right to use did not come from the patent statute, which
grants only rights to exclude, not rights to practice. Id. at
549–50. The Court discussed purchased articles, but with
no restrictions at issue, it did not decide the effect that
any restrictions would have. Id.
Bloomer v. Millinger, 68 U.S. (1 Wall.) 340 (1864), is
similar in its facts to McQuewan. The Court held that
Millinger, who “constructed the machines and put them in
operation under the authority of the patentee or his
assigns” during a first term extension, was not subject to
an infringement action for continued use during a second
term extension. Id. at 349, 350. The Court made no
distinction between construction and purchase, or be-
34 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
tween purchases “from the patentee . . . or from any other
person by him authorized to” make the sale, on the issues
addressed. Id. at 350, 351. In referring to a constructor
or purchaser of a patented machine having “also acquired
the right to use and operate it during the lifetime of the
patent,” id. at 350 (emphasis added), the Court implicitly
recognized that a purchaser might not acquire a full right
to use an acquired article.
And in Adams v. Burke, the Boston regional assignee
(Lockhart & Seelye) sold patented coffin lids to Burke,
“without condition or restriction.” 84 U.S. (17 Wall.) at
455 (emphasis added). When Burke used the lids outside
the Boston territory, for burials within a different territo-
ry where Adams was the regional assignee, Adams sued.
The Court held that, for such an unrestricted sale, “there
is no restriction on their use to be implied for the benefit
of the patentee or his assignees or licensees.” Id. at 457
(bold italics added).
When the Supreme Court in Quanta moved beyond
the Bloomer cases and Adams, it likewise did not advance
a patentee-sale/licensee-sale distinction. 553 U.S. at 625–
26. The Court’s next paragraph recounts the develop-
ments of the 1910s: The Court initially adopted a broad
greater-includes-the-lesser approach allowing preserva-
tion of patent rights through even otherwise-unlawful
restrictions, such as tie-ins, Henry v. A.B. Dick Co., 224
U.S. 1 (1912); but the Court quickly rejected that broad
principle and its application to resale price maintenance,
Bauer, 229 U.S. 1 (1913), and then to tie-ins, Motion
Picture Patents, 243 U.S. 502 (1917), the latter expressly
overruling A.B. Dick. The Court in Quanta, summarizing
that history, said nothing about the patentee-
sale/licensee-sale distinction; and it recognized that the
“rule” that emerged, as quoted from Motion Picture Pa-
tents, was one based on “ ‘a single, unconditional sale.’ ”
553 U.S. at 626 (emphasis added).
LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC. 35
The Court in Quanta then proceeded to a longer dis-
cussion of Univis. That discussion made no patentee-
sale/licensee-sale distinction. Rather, it recounted
Univis’s application of exhaustion to sales of articles that
may not be strictly covered by the patent but that suffi-
ciently embody the patent. 553 U.S. at 627–28.
In no part of the Court’s discussion did the Court con-
sider which cases involved “patentee” sales and which
“licensee” sales. Indeed, it is not always easy to tell where
the facts of each case fall on the spectrum from original
patentee through non-exclusive licensee. See, e.g., Bauer,
229 U.S. at 8 (seller was either “agent” or “licensee”). The
Court in Quanta did not say that the inquiry mattered.
And in Univis, the Court did the opposite of suggesting
that the distinction matters: it affirmatively stated that it
was treating the patent owner (Univis Corporation) and
the licensee-seller (Lens Company) as the same for pur-
poses of its analysis. 316 U.S. at 243.
3
In these circumstances, it would read too much into
the Court’s use of the phrase “authorized sale” to draw
the government’s conclusion—making the sharp patentee-
sale/licensee-sale distinction—without full analysis of
statutory, precedential, and other considerations. Full
analysis of the relevant legal context is necessary.
Such analysis would be required regardless, but it is
important to note that the phrase “authorized sale” does
not, by its words alone, compel the government’s conclu-
sion. It has long been a familiar feature of our legal
landscape that property rights in a particular thing—like
the separate interests in making, selling, using, etc., an
invention—are viewed as a “bundle” of rights (or sticks)
36 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
that can generally be transferred separately. 7 Of course,
particular legal regimes, for various purposes, commonly
identify the transfer of particular rights as determinative
of a “sale.” In determining which transfers are decisive,
context matters. And here the context is a statute that
identifies separate rights of manufacture, sale, use, etc.,
and the precedential setting is one that expressly recog-
nizes the possibility of separating the rights in a patented
article. See, e.g., Mitchell, 83 U.S. (16 Wall.) at 547 (ex-
haustion exists when a patentee “has himself constructed
a machine and sold it without any conditions, or author-
ized another to construct, sell, and deliver it, or to con-
struct and use and operate it, without any conditions . . .”;
“the owner of the machine, whether he built it or pur-
chased it, if he has also acquired the right to use and
operate it during the lifetime of the patent, may continue
to use it”) (emphases added); Bloomer v. Millinger, 68 U.S.
(1 Wall.) at 350. Moreover, the statutory purpose of the
inquiry here is to identify what sales confer “authority” on
the buyer to engage in distinct, otherwise-infringing acts.
7 See, e.g., Horne v. Dep’t of Agric., 135 S. Ct. 2419,
2428 (2015); Tahoe-Sierra Pres. Council, Inc. v. Tahoe
Reg’l Planning Agency, 535 U.S. 302, 327 (2002); New
York Times Co. v. Tasini, 533 U.S. 483, 495–96 (2001);
Keystone Bituminous Coal Ass’n v. DeBenedictis, 480
U.S. 470, 500–01 (1987); United States v. Sec. Indus.
Bank, 459 U.S. 70, 75–76 (1982); Loretto v. Teleprompter
Manhattan CATV Corp., 458 U.S. 419, 433 (1982); Kaiser
Aetna v. United States, 444 U.S. 164, 176 (1979); Fidelity-
Phila. Trust Co. v. Smith, 356 U.S. 274, 278–79 (1958);
Guggenheim v. Rasquin, 312 U.S. 254, 257–58 (1941);
Charles C. Steward Mach. Co. v. Davis, 301 U.S. 548,
580–81 (1937); Henneford v. Silas Mason Co., 300 U.S.
577, 582 (1937).
LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC. 37
Context is particularly important where, as here, the
phrase being interpreted comes from judicial opinions not
directly deciding the point at issue. Chief Justice Mar-
shall wrote for the Court almost 200 years ago: “It is a
maxim not to be disregarded, that general expressions, in
every opinion, are to be taken in connection with the case
in which those expressions are used.” Cohens v. Virginia,
19 U.S. (6 Wheat.) 264, 399–400 (1821); see Armour & Co.
v. Wantock, 323 U.S. 126, 132–33 (1944) (per Jackson, J.)
(“[W]ords of our opinions are to be read in the light of the
facts of the case under discussion. . . . General expressions
transposed to other facts are often misleading.”). 8 We
bear that maxim in mind in applying the body of Supreme
Court case law on exhaustion: that body of precedent
contains no decision against a patentee’s infringement
assertion in the present circumstances, and the decisions
on related circumstances require careful reading to de-
termine the best understanding of what issues the Court
actually decided.
8 See also Ark. Game & Fish Comm’n v. United
States, 133 S. Ct. 511, 520 (2012) (quoting Cohens); Unit-
ed States v. Alvarez, 132 S. Ct. 2537, 2544–45 (2012);
Illinois v. Lidster, 540 U.S. 419, 424 (2004); Reiter v.
Sonotone Corp., 442 U.S. 330, 341 (1979); United Gas
Improvement Co. v. Cont’l Oil Co., 381 U.S. 392, 404
(1965); Wright v. United States, 302 U.S. 583, 593–94
(1938); Sterling v. Constantin, 287 U.S. 378, 400 (1932)
(“the general language of the opinion must be taken in
connection with the point actually decided”); Pacific S.S.
Co. v. Peterson, 278 U.S. 130, 136 (1928); Bramwell v.
U.S. Fid. & Guar.Co., 269 U.S. 483, 489 (1926) (“It is a
rule of universal application that general expressions
used in a court’s opinion are to be taken in connection
with the case under consideration.”).
38 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
D
We conclude that a patentee may preserve its § 271
rights when itself selling a patented article, through
clearly communicated, otherwise-lawful restrictions, as it
may do when contracting out the manufacturing and sale.
1
That conclusion follows naturally from the statute.
Congress straightforwardly prescribed, in § 271(a), that a
sale or use of a patented article “without authority” is an
infringement. Under that language, a clear denial of
authority leaves a buyer without the denied authority.
The exhaustion rule for unrestricted sales readily fits
the language of § 271(a). It is reasonable for the courts to
treat a patentee-made or patentee-authorized sale of a
patented article (without distinction) as presumptively
granting “authority” to the purchaser to use it and resell
it. Such an approach recognizes the utility of having a
default rule for determining whether authority has been
conferred in the many circumstances where an express
conferral is missing. And it chooses as the default a
principle that sensibly accords with parties’ likely expec-
tations as to a domestic sale.
But it is quite a different matter to treat a sale as con-
ferring on the buyer the very authority that is being
denied through clearly communicated restrictions.
Mallinckrodt sensibly rejects that counter-textual result.
Unless granting “authority” is to be a legal fiction, a
patentee does not grant authority by denying it. And that
is so for patentee sales and licensee sales alike, i.e.,
whether the patentee denies the authority to its direct
purchaser or to one purchasing through a manufacturing
licensee. For the same reason, the result does not reason-
ably reflect market participants’ expectations: a buyer
cannot reasonably expect that the seller is conferring
authority that the seller is expressly denying, whether the
LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC. 39
seller is the patentee or a manufacturing licensee. The
statutory question of authority neither allows denials to
be grants nor logically depends on whether there is an
intermediary between the patentee and the first buyer.
In short, the government’s position would create a
rule of court-made law that runs counter to, rather than
accords with, the statutory definition of actionable in-
fringement. An exhaustion rule should fit rather than
contradict the statutory text.
2
Under longstanding Supreme Court precedent, a pa-
tentee may preserve its patent rights against downstream
buyers by arranging with someone else, even a non-
exclusive licensee, to make and sell patented articles,
under clearly stated restrictions on post-sale activities.
There is no good reason that a patentee that makes and
sells the articles itself should be denied the ability that is
guaranteed to a non-practicing-entity patentee. No
precedent requires a contrary conclusion.
a. The Supreme Court has recognized that a patentee
may preserve its rights against infringement by establish-
ing restrictions accompanying the sale of the patented
article (communicated at the time of sale), including
restrictions on the buyer’s post-acquisition use. That
recognition is implicit in the Motion Picture Patents
statement of the exhaustion rule as based on an “uncondi-
tional” sale, as quoted in Quanta, 553 U.S. at 626. More
affirmatively, the Court upheld a claim of infringement on
that basis in Mitchell v. Hawley, where the licensee seller
was under a restriction as to the (temporal) scope of rights
it could and did convey when selling the patented ma-
chine. Mitchell involved a licensee seller, but the Court
stated the exhaustion principles in terms keyed to the
absence of conditions and applicable to patentee sales:
40 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
[W]hen [the patentee] has himself constructed a
machine and sold it without any conditions, or au-
thorized another to construct, sell, and deliver it,
or to construct and use and operate it, without
any conditions, and the consideration has been
paid to him for the thing patented, the rule is well
established that the patentee must be understood
to have parted to that extent with all his exclusive
right, and that he ceases to have any interest
whatever in the patented machine so sold and de-
livered or authorized to be constructed and oper-
ated.
83 U.S. (16 Wall.) at 547; see id. at 548 (sales “may be
made by the patentee with or without conditions, as in
other cases, but where the sale is absolute, and without
any conditions, the rule is well settled that the purchaser
may continue to use the implement or machine purchased
until it is worn out”). 9 Although Mitchell involved a
licensee sale, its language did not distinguish licensees’
sales from patentees’ sales in the respects discussed, and
it was not long before the Court invoked those formula-
tions in a patentee-sale case. Keeler, 157 U.S. at 662–63.
9 We do not see a sufficient basis to read Mitchell’s
“without conditions” language as limited to sales in which
title is not transferred until a condition is fulfilled (some-
times called “conditional sales”). The terminology in
Mitchell is not limited to “conditional sales,” and the
Court later used the term “conditions” more broadly,
including in discussions of Mitchell. See Motion Picture
Patents, 243 U.S. at 506, 514–15; A.B. Dick, 224 U.S. at
12, 16, 19; In re Paper-Bag Cases, 105 U.S. 766, 770–71
(1882). In any event, the language of Mitchell is just one
part of the analysis, of which General Talking Pictures is
the most significant precedent.
LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC. 41
Most importantly, the Court squarely held in the Gen-
eral Talking Pictures case that a patentee could preserve
its infringement rights against unauthorized uses by
restricting manufacturing licensees’ authority to sell for
such uses. General Talking Pictures Corp. v. Western
Elec. Co., 304 U.S. 175, opinion on rehearing at 305 U.S.
124 (1938). Companies holding patent rights in certain
amplifiers (AT&T, Western Electric, RCA) licensed the
American Transformer Company to make and sell ampli-
fiers. The Transformer Company “was a mere licensee
under a nonexclusive license, amounting to no more than
‘a mere waiver of the right to sue.’ ” 304 U.S. at 181
(quoting De Forest Radio Telephone & Telegraph Co. v.
United States, 273 U.S. 236, 242 (1927)). The license
permitted sales only “for radio amateur reception, radio
experimental reception, and home broadcast reception,”
not “for use in theaters as a part of talking picture equip-
ment.” Id. at 180. The Transformer Company neverthe-
less sold amplifiers to General Talking Pictures for
theater use in violation of the restriction, and General
Talking Pictures “had actual knowledge that [the Trans-
former Company] had no license to make such a sale.” Id.
When the patentees sued General Talking Pictures (the
buyer) for infringement, the Supreme Court, based on
Mitchell, affirmed the judgment of infringement. Id. at
181–82.
The Court came to the same conclusion when it recon-
sidered the question on rehearing. It said: “Any use
beyond the valid terms of a license is, of course, an in-
fringement of a patent.” 305 U.S. at 126. Moreover,
“[t]hat a restrictive license is legal seems clear.” Id. at
127 (citing Mitchell). The use restriction was a lawful
one, the Court observed, and “[a]s the restriction was
legal and the amplifiers were made and sold outside the
scope of the license, the effect is precisely the same as if
no license whatsoever had been granted to Transformer
Company.” Id. General Talking Pictures, knowing of the
42 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
restriction, was “liable because it ha[d] used the invention
without license to do so.” Id. Thus, General Talking
Pictures was held to be liable for patent infringement. It
was not held liable for breach of contract; indeed, it had
no contractual relationship with the patentees.
b. The Supreme Court thus held that a patentee can
preserve its patent rights by authorizing a manufacturing
licensee to make and sell a patented article under an
otherwise-proper restriction, including a restriction on the
buyer’s post-purchase use. When the buyer, knowing of
the restriction at the time of purchase, subsequently uses
the article in violation of the restriction, the buyer is
infringing.
To distinguish the present patentee-sale situation, the
government must contend that a patentee cannot pre-
serve its patent rights against uses of a patented article
contrary to known use restrictions if, instead of licensing
someone else to make and sell the article, it chooses to
make and sell the article itself. That contention would
draw a sharp line between practicing-entity patentees
(those who themselves make and sell the articles at issue)
and non-practicing-entity patentees (those who do not).
Non-practicing-entities would have greater power to
maintain their patent rights than practicing entities.
The government points to no basis in the policy of the
patent statute for making that distinction. Nothing in the
patent statute suggests that patentees should have to
contract out their manufacture and sale of patented
articles to preserve their § 271 rights. The essential
tradeoff of the patent system—to provide a market-based
reward in exchange for disclosure—is equally applicable
whether the patentee sells or licenses another to make
and sell. The Federal Trade Commission made the fun-
damental point as follows: “A patentee can obtain a
financial reward for its patent by producing a product
that incorporates the invention or by transferring the
LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC. 43
technology through a patent license or sale to a manufac-
turer who develops and produces a product. The market
reward earned by the patentee in either case will depend
upon the extent to which consumers prefer the patented
invention over alternatives and prior technology, which
helps determine the invention’s economic value.” See Fed.
Trade Comm’n, The Evolving IP Marketplace: Aligning
Patent Notice and Remedies with Competition 139 (2011)
(footnote attached to “market reward” states: “The ‘mar-
ket reward’ defined here is the amount the patentee could
have earned by either selling a patented product or licens-
ing the patented technology in the absence of infringe-
ment.”). The distinction urged on us appears to be
unjustifiably formalistic, not founded in relevant economic
substance. Mallinckrodt, 976 F.2d at 705.
The proposed distinction would also introduce practi-
cal problems. Where would the line be drawn along the
spectrum from original patentees to assignees (e.g., re-
gional assignees) to exclusive licensees (exclusivity being
possible as to some but not all of the § 154 rights) to non-
exclusive licensees? As we already have noted, patent law
makes those distinctions for purposes of identifying who
may bring infringement actions, but the distinctions are
sometimes difficult to pin down and dependent on de-
tailed inquiries into contractual provisions. When pur-
chasing a patented article from a particular seller under
specified restrictions that are not independently improp-
er, how is the buyer to know where the seller falls along
the spectrum—and, hence, whether the buyer may ignore
the restrictions without fear of patent infringement?
c. The government advances a doctrinal defense of the
patentee-sale/licensee-sale distinction on which it rests its
challenge to Mallinckrodt. The government begins its
argument on the Mallinckrodt issue by first noting the
absence of statutory text supporting its position and then
turning, in the next sentence, to a passage from Bloomer
v. McQuewan to supply a foundation for its argument.
44 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
U.S. Br. 5. It asserts that “[t]his distinction stems from
the fact that licensees exercise a portion of the patentee’s
rights.” Id. at 8 (citing Bloomer v. McQuewan, 55 U.S. (14
How.) at 549–50). But that key distinction is wrong as a
matter of basic patent law, misreads Bloomer v. McQue-
wan, and cannot distinguish General Talking Pictures
from this case. A mere non-exclusive licensee, as in
General Talking Pictures, possesses no portion of the
rights granted by Congress in the patent.
Patent rights are only rights to exclude, not rights to
practice. See 5 Chisum § 16.02[1]. Among the “clearly
established principles” of patent law, as the Supreme
Court described them in Crown Die & Tool Co., are that
“the government did not confer on the patentee the right
himself to make, use or vend his own invention” and “in
its essence all that the government conferred by the
patent was the right to exclude others from making, using
or vending his invention.” 261 U.S. at 35; see Bauer, 229
U.S. at 10 (“The right to make, use, and sell an invented
article is not derived from the patent law. . . . The [patent
statute] secured to the inventor the exclusive right to
make, use, and vend the thing patented, and consequently
to prevent others from exercising like privileges without
the consent of the patentee.”); Continental Paper Bag, 210
U.S. at 425; Bloomer v. McQuewan, 55 U.S. (14 How.) at
549 (“The franchise which the patent grants, consists
altogether in the right to exclude every one from making,
using, or vending the thing patented, without the permis-
sion of the patentee. This is all that he obtains by the
patent.”); Western Elec. Co. v. Pacent Reproducer Corp., 42
F.2d 116, 118 (2d Cir. 1930); see also Dawson Chem. Co. v.
Rohm & Haas Co., 448 U.S. 176, 215 (1980) (“long-settled
view that the essence of a patent grant is the right to
exclude others from profiting by the patented invention”).
It is for that reason, for example, that a patentee may be
prevented from practicing its own patent by another’s
LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC. 45
patent. See Cantrell, 117 U.S. at 694; Blake, 94 U.S. at
733; Smith, 88 U.S. (21 Wall.) at 118–19.
A patentee exercises its congressionally granted
rights only when it invokes its power to exclude others,
not when it sells its product. Similarly, the congressional-
ly granted right to exclude may be viewed as being shared
by certain exclusive licensees, who, in appropriate circum-
stances (e.g., with joinder of the patent owner), may bring
infringement actions against others to enforce exclusivity.
See Independent Wireless, 269 U.S. at 464–69 (discussing
cases); 8 Chisum § 21.03[2]. But an exclusive licensee, in
merely selling (or making, using, etc.) a patented article,
is not exercising any power conferred by the patent stat-
ute. That is a fortiori true of a non-exclusive licensee, like
the licensee in General Talking Pictures, which has no
exclusivity protections at all. Thus, although the gov-
ernment’s assertion that “licensees stand in patentees’
shoes” in sharing certain patent-granted rights is true in
a significant respect as to exclusive licensees, U.S. Br. 8, it
is not true as to non-exclusive licensees—like the licensee
in General Talking Pictures. Accordingly, a patentee’s
ability to preserve its patent rights (rights to exclude) by
arranging for sales to be made by a non-exclusive licen-
see, like the Transformer Company, cannot rest on a
premise that “licensees exercise a portion of the patentee’s
rights.” U.S. Br. 8.
Bloomer v. McQuewan, on which the government re-
lies from the outset of its argument, U.S. Br. 5, does not
say otherwise. The government states that in Bloomer v.
McQuewan “the Court explained that a purchaser of a
patented article ‘stands on different ground’ than one who
obtains a license under the patent,” because the latter
“ ‘obtains a share in the monopoly . . . derived from, and
exercised under’ the patent.” Id. (emphasis added) (quot-
ing Bloomer v. McQuewan, 55 U.S. (14 How.) at 549). But
the Court did not say that about simply “one who obtains
a license,” like the licensee in General Talking Pictures.
46 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
What the Court said in Bloomer v. McQuewan—
immediately after the sentences stating that the patent
gives the patentee only “the right to exclude”—is that
“when [the patentee] sells the exclusive privilege of mak-
ing or vending [the invention] for use in a particular
place,” the privilege ends with the patent that creates it.
55 U.S. (14 How.) at 549 (emphasis added). That state-
ment is about the exclusivity right, i.e., the right to ex-
clude others, which an assignee or exclusive licensee
obtains in whole or in part. By its terms, and consistent
with the just-stated definition of the limited nature of the
patent franchise, it says nothing about a non-exclusive
licensee obtaining a share in the monopoly. The Court
then contrasted, as “stand[ing] on different ground,” one
who simply buys a patented device, which “[t]he inventor
might lawfully sell to him, whether he had a patent or
not, if no other patentee stood in his way.” Id. The buyer,
as mere owner and user of the device, lacks any patent-
granted right to exclude, i.e., “exercises no rights created
by the act of Congress,” so whatever rights it has do not
end with the patent’s expiration. Id. The distinction was
not between a sale from a patentee and a sale from a bare
(non-exclusive) licensee. In short, General Talking Pic-
tures cannot be distinguished on the doctrinal basis the
government invokes.
d. No Supreme Court decision compels adoption of the
distinction the government urges. As Impression noted at
oral argument, it is undisputed that no Supreme Court
decision has involved a single-use/no-resale restriction on
a patentee’s sale and found the restriction insufficient to
preserve the patentee’s infringement rights against a
buyer engaging in the forbidden reuse or resale. More
generally, no Supreme Court precedent denies a patentee
the ability to preserve its § 271 rights, by a clear commu-
nication of an otherwise-permissible restriction, when it
sells the patented article itself, just as the patentee may
do, under the General Talking Pictures principle, when
LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC. 47
contracting out the making and selling of the patented
article.
We have already noted the limitations on what was
presented and decided in the Bloomer cases (rejecting
implied temporal use restrictions) and Adams (rejecting
implied geographic use restrictions). In 1881, the Su-
preme Court summarized the relevant law: “The right of
the owner of a patented machine, without any conditions
attached to his ownership, to continue the use of his
machine during an extended term of the patent, is well
settled.” In re Paper-Bag Cases, 105 U.S. at 770–71
(emphasis added) (citing Bloomer v. McQuewan, Mitchell,
Adams, and Chaffee v. Boston Belting Co., 63 U.S. (22
How.) 217 (1859)). In so stating the law, in terms that
tied exhaustion to the absence of conditions, the Paper-
Bag Cases Court cited at least one case, Adams, involving
a sale made by an assignee (a patentee under patent
law). 10
The Court in Hobbie v. Jennison, 149 U.S. 355 (1893),
described and followed the holding of Adams that, when
an assignee sold machines, “there was no restriction on
their use to be implied, for the benefit of the patentee or
his assignees or licensees.” 149 U.S. at 362 (emphasis
added). The Court held that an unrestricted sale of pipe
in Michigan by the Michigan assignee (Jennison’s firm),
with full rights to sell it, allowed the buyer to use it in
Connecticut free of the patent rights belonging to the
Connecticut assignee (Hobbie).
10 In Chaffee, which involved Goodyear’s rubber pa-
tents, the Supreme Court rejected the defendants’ invoca-
tion of the Bloomer principle, again in a term-extension
context, explaining that there was no evidence that the
defendants had ever received any authority to practice the
patented invention. 63 U.S. (22 How.) at 222–24.
48 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
In its 1895 decision in Keeler, the Court applied its ex-
isting precedents, especially Adams and Hobbie. The
Massachusetts assignee (Standard Folding-Bed) sued
Keeler when he bought patented beds from the Michigan
assignee, subject to no restrictions, and brought them to
Massachusetts for sale. 157 U.S. at 660 (stating facts
before opinion starts). The Court noted that in Adams the
patented articles “were sold to [Burke] without condition
or restriction,” id. at 663, and it concluded that Adams
“was applicable,” id. at 665. The Court also quoted as
defining the law (in this patentee-sale case) the passage
set out above from Mitchell (a licensee-sale case). Id. at
663. In any event, with no restriction on the sale present,
the Court followed Adams’ refusal to find one implied by
the patent law.
It was against that background that the Court then
noted: “Whether a patentee may protect himself and his
assignees by special contracts brought home to the pur-
chasers is not a question before us,” but “such a question
would arise as a question of contract, and not as one
under the inherent meaning and effect of the patent laws.”
Id. at 666 (emphasis added). That language lends itself to
use in the government’s argument that sale restrictions
never preserve patent rights, but give only contract rights.
But even in Keeler the language does not compel that
reading, and the later decisional law—most importantly,
General Talking Pictures—undermines the contract-only
interpretation.
Thus, in Keeler itself, the word “inherent” naturally
ties the language to the modest point based on Adams
that actually decided Keeler: with no contract restriction
as part of the sale, an implied one cannot be found in
patent law itself. That says nothing about the irrelevance
of an actual contract restriction to preservation of patent
rights. Moreover, in the licensee-sale context, General
Talking Pictures establishes that contract restrictions can
indeed preserve a patentee’s infringement rights and are
LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC. 49
not merely enforceable under contract law: General
Talking Pictures, which had no contract with the patent-
ees, was held liable for patent infringement, not breach of
any contract with the patentees. Notably, then, in Quan-
ta, a licensee-sale case like General Talking Pictures, the
Court quoted the language from Keeler after discussing
General Talking Pictures (without a hint of disapproval)
and concluding that, as in Keeler, Adams, and Hobbie,
there simply was no patentee-imposed contractual re-
striction applicable to the sales at issue. 553 U.S. at 637
n.7. And in the present case, as in General Talking
Pictures, there is no reason to think that the patentee has
a contract remedy available as a substitute for patent
infringement: as far as the record before us shows,
Lexmark has no contractual relationship with Impression.
In United States v. General Electric Co., 272 U.S. 476
(1926), the Supreme Court rejected the government’s
antitrust challenge to (among other things) General
Electric’s licensing of Westinghouse to make and sell
patented lamps under terms controlling resale prices. See
Fed. Trade Comm’n v. Actavis, Inc., 133 S. Ct. 2223, 2232
(2013) (describing General Electric). In making a general
point about patentee sales (not involved in the case), the
Court said: “It is well settled, as already said, that where
a patentee makes the patented article, and sells it, he can
exercise no future control over what the purchaser may
wish to do with the article after his purchase. It has
passed beyond the scope of the patentee’s rights.” 272
U.S. at 489 (citing cases). We read that language to deem
“settled” only what was settled in the cited precedents—a
patentee’s sales without restrictions exhaust patent rights
in the item sold. The cited cases are Adams, Bloomer v.
McQuewan, Hobbie, Keeler, and Mitchell. They do not go
beyond that proposition.
The prominent exhaustion decisions from the 1910s
do not make the patentee-sale/licensee-sale distinction
urged by the government here. After A.B. Dick adopted a
50 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
broad principle that preserved a patentee’s patent-law
rights against restriction-violating sale, use, etc., even if
the restrictions were otherwise unlawful—in A.B. Dick, a
tie-in requiring purchase of unpatented products—the
Supreme Court repudiated A.B. Dick’s broad principle
and held particular restrictions improper and therefore
not effective at preserving patent rights against actions
contrary to those restrictions. It did so as to tie-ins in
Motion Picture Patents, overruling A.B. Dick and relying
on the 1914 Clayton Act, 38 Stat. 730. See 243 U.S. at
517. And it did so as to resale price maintenance in
Bauer, Straus, and finally Boston Store, relying on the
judicially adopted per se antitrust condemnation of that
practice in Dr. Miles Medical Co. v. John D. Park & Sons
Co., 220 U.S. 373 (1911), overruled by Leegin Creative
Leather Prods., Inc. v. PSKS, Inc., 551 U.S. 877 (2007).
See Bauer, 229 U.S. at 12; Straus, 243 U.S. at 498; Boston
Store, 246 U.S. at 21. But the Court did not rule that all
restrictions on a patentee’s sale were ineffective to pre-
serve the patentee’s patent-law rights. Instead, it called
for an inquiry—in accord with what Mallinckrodt later
said—into whether a patentee’s restrictions were other-
wise improper, as by “extend[ing] the scope of its patent
monopoly.” Motion Picture Patents, 243 U.S. at 516. And
the Court did not adopt the line the government suggests
between patentee sales and licensee sales.
In its 1942 decision in Univis, the Supreme Court re-
jected a patent-based defense to the government’s anti-
trust challenge to resale-price-maintenance restrictions in
the licensing and selling of eyeglass lenses. The Court
said that it had two questions before it: first, whether the
restrictions were “excluded by the patent monopoly from
the operation of the Sherman Act,” i.e., whether if the
restrictions were illegal under the Sherman Act, they
were saved by the patent law; and second, whether the
restrictions were illegal under the Sherman Act. 316 U.S.
LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC. 51
at 243. The Court said no on the first question, id. at
249–52, and yes on the second, id. at 252–54.
The second answer (regarding the substance of anti-
trust law) is immaterial here, and the first answer is in
accord with Mallinckrodt’s ruling—which expressly
recognizes that, as Univis held, restrictions that are
otherwise unlawful do not preserve patent rights. Moreo-
ver, although some language in Univis, like language in
other decisions in the area, can be taken out of context
and read as going beyond the specific restrictions in-
volved, id. at 249–51, the most the Court ruled, even as to
patent law all by itself, was that a vertical price-control
restriction was ineffective to preserve patent rights after
sales of articles embodying the patents. While Univis is
controlling on what it decided on the issues before it, we
do not think it appropriate to give broad effect to lan-
guage in Univis, taken out of context, to support an
otherwise-unjustified conclusion here on a question not
faced there. And that is particularly so today, given that
the Univis opinion relied in part on strongly restrictive
patent-misuse decisions that were repudiated by Congress
after Univis was decided. 11
11 Univis supports some of its broader statements
about loss of patent rights with citations to some of the
highly restrictive patent-misuse decisions—e.g., Leitch
Manufacturing Co. v. Barber Co., 302 U.S. 458 (1938);
Morton Salt Co. v. G.S. Suppiger Co., 314 U.S. 488 (1942);
B.B. Chemical Co. v. Ellis, 314 U.S. 495 (1942)—that were
soon to culminate in the Mercoid decisions, Mercoid Corp.
v. Mid-Continent Investment Co., 320 U.S. 661 (1944);
Mercoid Corp. v. Minneapolis-Honeywell Regulator Co.,
320 U.S. 680 (1944). In the 1952 Patent Act, Congress, by
adopting § 271(d), sharply limited the patent-misuse
doctrine in response to that line of authority. See Dawson
Chem. Co. v. Rohm & Haas Co., 448 U.S. 176, 204–15
52 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
Most pointedly for present purposes, Univis does not
support the distinction between patentee sales and licen-
see sales the government urges in this case. The Univis
case was decided just four years after General Talking
Pictures, which confirmed that a patentee may preserve
its patent rights by imposing otherwise-lawful restrictions
on sales by its manufacturing licensees. Yet Univis says
nothing to limit that prominent, recent ruling. Moreover,
as we have already noted, Univis is explicit that it made
no difference to the Court’s analysis whether the patentee
(Univis Corporation) or the manufacturing licensee
(Univis Lens Company) was doing the selling: the Court
stated that the two companies “may for the purposes of
this suit be treated as though they were a single corpora-
tion.” 316 U.S. at 243. The Court also stated its point
about the particular sale as equally applicable to a “[s]ale
of a lens blank by the patentee or by his licensee.” Id. at
249 (emphasis added). 12
For the foregoing reasons, we think that the best les-
son to draw from the Supreme Court’s precedents, as
applied to the question before us, is that a patentee may
preserve its patent rights by otherwise-proper restrictions
when it makes and sells patented articles itself and not
only when it contracts out manufacturing and sales.
3
We see no basis for a different conclusion in Lord
Coke’s description in 1628 of a British common-law prin-
ciple, as quoted in Kirtsaeng, 133 S. Ct. at 1363. Lord
(1980); Rich, supra, at 21. In 1988, Congress limited the
patent-misuse doctrine still further. See Illinois Tool
Works, 547 U.S. at 41–43.
12 The government also cites Aro II, 377 U.S. at 497,
but that case involved no issue about restrictions in the
terms of authorized sales.
LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC. 53
Coke described what British courts, in the absence of an
overriding legislative prescription, would treat as an
impermissible anti-alienation restriction on a seller’s
disposition of “ ‘his whole interest’ ” in a chattel. Id. Lord
Coke’s formulation was part of the judicial formulation of
background law for personal property generally, and it
neither addressed possible differences among particular
kinds of personal property nor suggested that a judicial
rule would override specific legislative grants. Lord
Coke’s formulation was a pertinent reference point in
Kirtsaeng, because, as we have noted, the copyright
statute, 17 U.S.C. § 109(a), states a rule that itself over-
rides the otherwise-applicable statutory bars on infringe-
ment and importation and grants of exclusive rights. In
stating one common-law jurisdiction’s general judicial
policy at one time toward anti-alienation restrictions,
Lord Coke’s description confirmed that the otherwise-
supported reading of § 109(a) fit a legal tradition.
Lord Coke’s quote does not purport to address the ef-
fect of a legislative prescription of broad rights to control
sale and use. 13 That is what is present in the Patent Act,
but not the copyright law. Sections 154(a) and 271(a)
legislatively establish a patentee’s rights over sale and
use, without subservience to a superseding grant of rights
to one who owns a particular article. They grant those
rights separately as to making, selling, using, etc., thus
recognizing different sticks in the bundle of rights; they
13 Lord Coke’s 1628 statement does not address the
Statute of Monopolies, enacted just a few years earlier, to
which American patent law has often been traced. See
Pennock v. Dialogue, 27 U.S. (2 Pet.) 1, 18, 20 (1829); J.M.
Robinson & Co. v. Belt, 187 U.S. 41, 47 (1902). Lord Coke
did discuss the Statute of Monopolies elsewhere. See
Pennock, 27 U.S. (2 Pet.) at 20 (citing Edward Coke, Third
Part of the Institutes of the Laws of England 184 (1644)).
54 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
grant them without an exception keyed to the patentee’s
prior ownership of a particular article embodying the
invention; and they grant them unless, as relevant here,
the patentee confers “authority.” Lord Coke’s quote does
not address the Patent Act situation or suggest that
federal courts may treat a denial of authority as a confer-
ral of authority.
Different policy choices can readily be made and justi-
fied in this area, even as to background rules applicable to
personal property generally. Some of the numerous,
distinct common-law jurisdictions, including Lord Coke’s,
have departed at various times from the background rule
expressed by Lord Coke. See De Mattos v. Gibson, (1859)
45 Eng. Rep. 108 (Ch. App.); Waring v. WDAS Broad.
Station, Inc., 194 A. 631, 637–38 (Pa. 1937); Metro. Opera
Ass’n v. Wagner-Nichols Recorder Corp., 101 N.Y.S.2d
483, 494–95 (N.Y. Sup. Ct. 1950), aff’d, 279 A.D. 632 (N.Y.
App. Div. 1951); Pratte v. Balatsos, 113 A.2d 492, 494–95
(N.H. 1955); Nadell & Co. v. Grasso, 346 P.2d 505, 509–10
(Cal. 1959); Clairol Inc. v. Cosmetics Plus, 325 A.2d 505,
508 (N.J. Sup. Ct. 1974); Zechariah Chafee, Jr., Equitable
Servitudes on Chattels, 41 Harv. L. Rev. 945, 1007–13
(1928); Zechariah Chafee, Jr., The Music Goes Round and
Round: Equitable Servitudes and Chattels, 69 Harv. L.
Rev. 1250, 1254–56 (1956); Glen O. Robinson, Personal
Property Servitudes, 71 U. Chi. L. Rev. 1449, 1455–60
(2004). In 1918, then-Dean Harlan Fiske Stone wrote:
“The tendency in the United States has been to apply the
doctrine of restrictive agreements to personal property
when not regarded as an unlawful restraint of trade or in
violation of public policy.” The Equitable Rights and
Liabilities of Strangers to a Contract, 18 Colum. L. Rev.
291, 310 (1918).
In any event, and more specifically, whatever consid-
erations might go into a jurisdiction’s choice as to the
background rule for personal property in general, law-
making authorities may reasonably make different choic-
LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC. 55
es for particular kinds of property. Notably, as to intellec-
tual property in its various forms, Congress, implement-
ing the Constitution, has long deemed it important to
incentivize creation and disclosure through grants to the
creator of rights to exclude others for a time, the duration
and scope based on features of the particular kind of
intellectual property (e.g., patent terms are much shorter
than copyright terms). The Patent Act expressly does so
regarding patent rights, specifically giving separate rights
to exclude others from making, using, selling, etc. That
overriding legislative prescription removes the patented-
article sale from the scope of Lord Coke’s 1628 description
of his country’s general judicially fashioned property law,
as British tribunals recognized long ago. See A.B. Dick,
224 U.S. at 42–43 (quoting the judicial committee of the
Privy Council, speaking through Lord Shaw in 1911: “the
general doctrine of absolute freedom of disposal of chat-
tels of an ordinary kind is, in the case of patented chat-
tels, subject to the restriction that the person purchasing
them, and in the knowledge of the conditions attached by
the patentee, which knowledge is clearly brought home to
himself at the time of sale, shall be bound by that
knowledge and accept the situation of ownership subject
to the limitations. These limitations are merely the
respect paid and the effect given to those conditions of
transfer of the patented article which the law, laid down
by statute, gave the original patentee a power to impose.”)
(quoting Nat’l Phonograph Co. v. Menck, [[1911] A.C. 336,
349 (P.C. 1911 appeal taken from Aus.)]); Incandescent
Gas Co. v. Cantelo, [1895] 12 R.P.C. 262, 264 (Eng.).
In short, notwithstanding Lord Coke’s description of
English general personal-property judge-made law, the
patent-specific statutory analysis must govern here.
4
Finally, following the analytical method of Kirtsaeng,
we consider what we can reliably gauge about the likely
56 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
real-world consequences of one answer or another to the
exhaustion question presented here. As indicated at the
front of this opinion, we have received numerous amicus
briefs making competing arguments, with varying degrees
of reliable factual support, for the effect of Mallinckrodt
on their interests or the interests they promote. We
cannot assess those contentions and make policy choices
in the way Congress can. We can say only that the ami-
cus presentations give us no reason to depart from the
application of § 271 we derive from the statute and prece-
dent.
In particular, we see no basis for predicting the ex-
treme, lop-sided impacts the Court found plausible in
Kirtsaeng in different circumstances. Mallinckrodt has
been the governing case law since 1992 and has been
reiterated in subsequent precedent. And yet we have
been given no reliable demonstration of widespread
problems not being solved in the marketplace. Given
General Talking Pictures, the only question is about
patentees’ ability to do for their own sales what they
already can do by contracting out their manufacturing
and sales. Regarding the specific scenario we are ad-
dressing today—in which the patentee has sought to
preserve its patent rights by conditioning its first sale on
a single-use/no-resale restriction of which the accused
infringer had adequate notice at the time of purchase—we
have been given no proof of a significant problem with
enforcing patent rights.
At the same time, the conduct challenged here can
have benefits. Lexmark’s Return Program provides
customers an immediate up-front benefit: a choice be-
tween two options, one offering them a lower price in
exchange for the single-use/no-resale limitation. And a
company in Lexmark’s position could have a plausible
legitimate interest in not having strangers modify its
products and introduce them into the market with the
quality of modifications (including ink refills) not subject
LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC. 57
to Lexmark’s control: lower quality of remanufactured
cartridges could harm Lexmark’s reputation. See Chafee,
41 Harv. L. Rev. at 946–47. A medical supplier in
Mallinckrodt’s position plausibly may have similar reason
to believe that reuse, when not under its own control,
carries a significant risk of poor or even medically harm-
ful performance, to the detriment of its customers and its
own reputation. Such interests are hardly unrelated to
the interests protected by the patent law—the interests
both of those who benefit from inventions and of those
who make risky investments to arrive at and commercial-
ize inventions. See Robinson, 71 U. Chi. L. Rev. at 1480–
1515 (surveying reasons for restrictions, particularly in
intellectual-property area).
We do not have a record on such interests in this case,
as Impression has not claimed that the restrictions at
issue violate antitrust, patent-misuse, or similar con-
straints. And it is not our function to assess the strength
of such interests against those which might pull the other
way. Nor can we fairly assume the illegitimacy of the
conduct here. Such an assumption would run counter to
the large-scale changes in antitrust law and patent-
misuse law, especially over the last four decades, that
have displaced the strict condemnation of various vertical
restrictions that characterized both areas of law in the
first half of the twentieth century.
Thus, the Supreme Court broadly held that non-price
vertical restraints are to be judged by a rule of reason.
See Continental T.V., Inc. v. GTE Sylvania Inc., 433 U.S.
36, 57–59 (1977), overruling United States v. Arnold,
Schwinn & Co., 388 U.S. 365 (1967). The Court aban-
doned its “strong disapproval of tying arrangements” by
insisting on market power in the tying product as a
precondition to condemnation. See Illinois Tool Works,
547 U.S. at 35–38; Jefferson Parish Hosp. Dist. No. 2 v.
Hyde, 466 U.S. 2 (1984). It overturned both the per se
ban on vertical agreements setting maximum resale
58 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
prices, State Oil Co. v. Khan, 522 U.S. 3, 7 (1997), overrul-
ing Albrecht v. Herald Co., 390 U.S. 145 (1968), and the
per se ban on vertical agreements setting minimum resale
prices, Leegin Creative Leather Prods., Inc. v. PSKS, Inc.,
551 U.S. 877, 900–01 (2007), overruling Dr. Miles Medical
Co. v. John D. Park & Sons Co., 220 U.S. 373 (1911).
The absence of a general basis for finding market
harm from vertical restrictions is recognized specifically
in the patent area, too. Field-of-use restrictions in patent
licenses have long been common, as Mallinckrodt points
out and General Talking Pictures shows. In 1988, build-
ing on an initial relaxation of patent-misuse standards in
1952, Congress made clear that tying arrangements
involving a non-patented product do not constitute patent
misuse where the patentee lacks market power. 35
U.S.C. § 271(d)(5). The Supreme Court, citing that de-
termination, subsequently overturned its own longstand-
ing antitrust presumption that patent (and copyright)
owners have market power. Illinois Tool Works, 547 U.S.
at 41–42. And the two federal antitrust agencies have
recognized that restrictions in intellectual-property li-
censes can be procompetitive. See U.S. Dep’t of Justice &
Fed. Trade Comm’n, Antitrust Guidelines for the Licens-
ing of Intellectual Property § 2.3 (1995) (“Field-of-use,
territorial, and other limitations on intellectual property
licenses may serve procompetitive ends by allowing the
licensor to exploit its property as efficiently and effective-
ly as possible.”).
For those reasons, we see no basis for departing from
the legal analysis set out above. A patentee already may
preserve its patent rights against downstream buyers
(with notice) through otherwise-lawful restrictions, by
licensing others to make and sell its patented articles.
We conclude that the law does not forbid the patentee to
do the same when making and selling the articles itself.
LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC. 59
III
The second question presented to us is whether
Lexmark’s sales of its cartridges abroad conferred author-
ity on its buyers, and derivatively on Impression, to
import the cartridges into, and sell and use them in, the
United States, which would be infringing acts in the
absence of authorization. The question was decided by
the district court, and is presented here, on the premise
that Lexmark made the foreign sales without communi-
cating a reservation of U.S. patent rights. And the ques-
tion is presented only as an exhaustion question, because
Impression did not press any implied-license defense,
despite the fact that Quanta made clear that the doctrines
are distinct.
The absence of an implied-license defense in this case
sharpens the definition of the issue presented. There is
no doubt that a U.S. patentee, when selling a U.S.-
patented article abroad, could give the buyer permission,
expressly or by implication from the circumstances, to
import the purchased article into the United States and
sell and use it here. Such a license would make those acts
non-infringing. The question for decision is whether, if
there is no proof of any such license (express or implied),
there is nonetheless a legal rule that such a foreign sale
confers authority on the overseas buyer to import the
patented article into the United States and sell and use it
here. If there is such a legal rule of authorization, the
next question is whether the authorization is conclusive,
effective even in the face of the U.S. patentee’s reserva-
tion of U.S. rights, or only presumptive, with the U.S.
patentee able to reserve its U.S. rights if it can demon-
strate with adequate certainty that it has taken the steps
needed to do so.
We conclude, as we did in Jazz Photo, that there is no
legal rule that U.S. rights are waived, either conclusively
or presumptively, simply by virtue of a foreign sale, either
60 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
made or authorized by a U.S. patentee. The government,
we note, agrees that a conclusive-exhaustion rule should
be rejected but argues for a presumptive-exhaustion rule
regarding a U.S. patentee’s foreign sales. In the govern-
ment’s view, a U.S. patentee can reserve its U.S. rights
when selling abroad (but not if selling domestically, under
the government’s view that Mallinckrodt is wrong). We
conclude that neither a conclusive- nor a presumptive-
exhaustion rule is legally justified.
A
This court’s 2001 decision in Jazz Photo reviewed the
International Trade Commission’s finding that Jazz Photo
(and others) infringed patents of Fuji Photo Film by
importing refurbished disposable cameras originally sold
by or with the authorization of Fuji Photo. 264 F.3d 1094,
1098. Two groups of cameras sold by or with the authori-
zation of Fuji Photo were at issue: those sold initially in
the United States, refurbished abroad, and imported back
into the United States; and those initially sold abroad,
refurbished abroad, and imported into the United States.
This court drew different conclusions about infringement
regarding those two groups of imported cameras.
Disagreeing with the Commission on the central issue
in the case, the court held that a specifically described set
of refurbishment changes (involving insertion of new film
into the used casings) were mere repairs, not reconstruc-
tions that amounted to creation of new articles. Id. at
1102–07. Therefore, the court ruled, for the “used camer-
as whose first sale was in the United States with the
patentee’s authorization,” and that were subjected to only
those changes (with disclosure to the Commission), Jazz
Photo’s importations were not infringing: repair main-
tained the identity of the article initially sold, and the
domestic sale exhausted the patentee’s rights in the
article sold (but not in newly created articles). Id. at
1098–99, 1102–05 (discussing, for example, Aro I, 365
LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC. 61
U.S. at 346); see Bowman, 133 S. Ct. at 1766. As to those
used cameras, the court reversed the Commission. 264
F.3d at 1099.
The court held, however, that a different result was
required for any of the imported cameras that previously
had been “sold only overseas,” even if the changes in them
amounted only to repair. Id. at 1105 (emphasis added).
Relying on Boesch v. Graff, 133 U.S. 697, 701–03 (1890),
the court ruled that “United States patent rights are not
exhausted by products of foreign provenance,” i.e., prod-
ucts previously sold only abroad. 264 F.3d at 1105. Thus,
the court’s non-infringement ruling (and reversal of the
Commission) applied only to used cameras “for which the
United States patent right has been exhausted by first
sale in the United States” and whose refurbishing was
limited as described. Id. The imported cameras not
previously sold in the United States, in contrast, “are not
immunized from infringement of United States patents by
the nature of their refurbishment.” Id. There is no sug-
gestion that Jazz Photo argued that Fuji Photo had ex-
pressly or impliedly licensed importation in making or
authorizing the foreign sales, and the court said nothing
to foreclose such a defense to infringement. Accordingly,
as to cameras “whose prior sale was not in the United
States,” the court affirmed the Commission’s infringement
finding and remedies against Jazz Photo. Id. at 1111.
The court followed Jazz Photo in Fuji Photo Film Co.,
Ltd. v. Jazz Photo Corp., 394 F.3d 1368, 1370 (Fed. Cir.
2005), which affirmed a district court’s judgment of in-
fringement by Jazz Photo (and others) in favor of Fuji
Photo in litigation involving the same dispute as Jazz
Photo. This court rejected Jazz Photo’s argument for
exhaustion as to first sales made abroad. The court in
Fuji Photo explained that in Jazz Photo “this court ex-
pressly limited first sales under the exhaustion doctrine
to those occurring within the United States.” Id. at 1376.
62 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
Accordingly, exhaustion of U.S. rights is not triggered by
“[t]he patentee’s authorization of an international first
sale.” Id. In Fuji Photo, as in Jazz Photo, the court did
not foreclose any argument about express or implied
licenses conferred in particular foreign sales.
In short, this court has held since 2001 that the for-
eign sale of a U.S.-patented article, when the sale is
either made or authorized by the U.S. patentee, does not,
standing alone, confer on the buyer “authority” to import
the item into the United States or to sell and use it here,
and so does not save those acts from being infringing
under § 271(a). See Ninestar Tech. Co. v. Int’l Trade
Comm’n, 667 F.3d 1373, 1378 (Fed. Cir. 2012). 14 The
14 In Ninestar, this court rejected the argument that
Quanta, 553 U.S. at 632 n.6, upset Jazz Photo. Quanta’s
footnote 6 does not address or decide whether a foreign
sale can trigger exhaustion. It makes a different point,
stated in the textual assertion the footnote supports:
“LGE has suggested no reasonable use for the Intel Prod-
ucts other than incorporating them into computer systems
that practice the LGE Patents.” Id. at 632. That asser-
tion applies the Court’s standard for when an article not
covered by a patent nevertheless embodies the patent.
Footnote 6 responds to footnote 10 in LGE’s brief, Brief
for Respondent 21–22 n.10, Quanta (No. 06-937), 2007
WL 4244683, which does not rely on a foreign sale of the
Intel Products, but argues that the (first-sale) Intel Prod-
ucts do not embody the patents because they have sub-
stantial non-infringing uses, namely, wholly foreign
making, selling, and using of computers covered by the
patents. Quanta’s footnote 6 responds that such foreign
acts with those computers “would still be practicing the
patent, even if not infringing it,” which is what counts for
the “embody” inquiry. 553 U.S. at 632 n.6.
LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC. 63
court has not curtailed the ability of an accused infringer
to show that the patentee conferred such authority by
words or implications. Exhaustion cannot rest on a
foreign first sale, but an express or implied license might
be found based on the circumstances of particular foreign
sales.
B
The Supreme Court’s decision in Kirtsaeng does not
undermine the no-exhaustion conclusion of Jazz Photo. In
Kirtsaeng, the Court interpreted § 109(a) of the Copyright
Act, which states that “the owner of a particular
copy . . . lawfully made under this title . . . is entitled,
without the authority of the copyright owner, to sell or
otherwise dispose of the possession of that copy . . . .” 17
U.S.C. § 109(a). The Court held that § 109(a)’s guarantee
is not limited to copies manufactured in the United
States, but applies regardless of the place of manufacture,
as long as the maker of the copies had permission from
the copyright owner to make them. Kirtsaeng, 133 S. Ct.
at 1355–71.
For various reasons, that ruling does not answer the
question presented under the Patent Act. Kirtsaeng says
Neither in footnote 6 nor elsewhere does Quanta refer
to LGE’s final footnote, Brief for Respondent 53 n.19, in
which LGE cited Boesch, suggested that Intel’s sales
might have been made abroad, and said that this was an
open question for remand. Quanta replied that LGE had
waived any foreign-sale-location contention, so that
reversal, not remand, was required. Reply Brief for
Petitioners 3 n.2, Quanta (No. 06-937), 2007 WL 4613423.
The Court evidently agreed with Quanta. Without dis-
cussing Boesch or any issue about foreign-sale exhaustion
law, the Court reversed, holding that “LGE can no longer
assert its patent rights against Quanta.” 553 U.S. at 638.
64 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
nothing about patent law; and it does not address, even in
the context of copyright law, the exhaustion question
presented by the Patent Act. Whether a sale constitutes a
grant to a buyer of (conclusive or presumptive) “authority”
to engage in otherwise-prohibited acts of importation,
sale, and use is the question here. It is not the question
presented by the Copyright Act. That Act contains no
right to exclude anyone from “use,” and § 109(a) of the Act
expressly overrides the copyright holder’s rights to ex-
clude from importing or selling copies, permitting acts
“without the authority” of the rights owner—in circum-
stances that undisputedly have nothing to do with the
place of sale. The Court in Kirtsaeng merely interpreted
§ 109(a) and resolved the dispute about whether the place
of manufacture matters under § 109(a), holding—for a
number of reasons “taken together”—that it does not. 133
S. Ct. at 1358, 1371. The Kirtsaeng question thus is
several steps removed from the question presented under
the Patent Act, which requires a quite different analysis.
To elaborate: In Kirtsaeng, the Supreme Court did not
advert to the foreign-exhaustion issue under patent law.
Nor did it cite, even to distinguish, its own leading case on
exhaustion and foreign sales in the patent area, namely,
Boesch—which has no counterpart in the copyright area.
More generally, the Court nowhere relied on the wealth of
exhaustion cases in the patent area. The absence of such
references to patent law, even at a general level, reinforc-
es the need for a distinct patent-law analysis.
The Court has long recognized the distinctness of the
copyright and patent regimes and observed that particu-
lar questions require separate analysis for each body of
law. For example, the Court has noted that the patent
right is broader in scope than the copyright right in at
least one important respect: the patent statute gives a
right to exclude others from “use,” whereas the copyright
statute does not. Bauer, 229 U.S. at 13–14. In a decision
LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC. 65
relied on in Kirtsaeng, 133 S. Ct. at 1363, the Court stated
more generally that copyright-law conclusions and patent-
law conclusions do not necessarily align, so that a conclu-
sion about copyright law does not automatically carry
over to patent law. Bobbs-Merrill, 210 U.S. at 345–46. In
Sony Corp. of America v. Universal City Studios, Inc., the
Court, noting that patent and copyright law “are not
identical twins,” required “caution . . . in applying doc-
trine formulated in one area to the other.” 464 U.S. 417,
439 n.19 (1984). In Eldred v. Ashcroft, the Court ex-
plained that “patents and copyrights do not entail the
same exchange.” 537 U.S. 186, 216 (2003).
The answer to a particular question therefore requires
analysis of the specifics of the relevant statute. The Court
in Kirtsaeng conducted just such an analysis for the
copyright-law question before it. It analyzed a copyright-
specific text, namely, § 109(a), and stressed that it was
determining “the best reading of § 109(a).” 133 S. Ct. at
1370 (emphasis in original). See id. at 1371 (“we do no
more here than try to determine what decision Congress
has taken”); id. at 1357 (“We must decide whether the
words ‘lawfully made under this title’ restrict the scope of
§ 109(a)’s ‘first sale’ doctrine geographically.”). And the
structure of the Court’s analysis confirms the primacy of
the statutory text: The Court began its analysis with an
extensive consideration of the text of § 109(a). 133 S. Ct.
at 1358–60. It concluded that “[t]he language of § 109(a)
says nothing about geography”; reading “made under this
title” to mean made with the rights holder’s permission,
not to mean made in the United States, “is sim-
ple, . . . promotes a traditional copyright objective (com-
batting piracy), and . . . makes word-by-word linguistic
sense”; while the made-in-the-United-States interpreta-
tion “bristles with linguistic difficulties.” 133 S. Ct. at
1358. The Court then found various contextual, histori-
66 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
cal, and practical considerations to support that textual
conclusion. Id. at 1358–62.
The text construed in Kirtsaeng has no counterpart in
the Patent Act. And that text presents a sharply different
question from the statutory question presented by the
Patent Act. By its terms, far from calling for a determina-
tion of whether any kind of sale constitutes the conferring
of “authority” from the rights holder, § 109(a) defines the
circumstances (ownership of a copy lawfully made) that,
when present, give a copy owner a right to sell or dispose
of the owned copy “without the authority of the copyright
owner.” 17 U.S.C. § 109(a) (emphasis added). Moreover,
as we have explained, and as the Court ruled in Kirtsaeng
and Quality King, the Copyright Act makes the provisions
on exclusivity, infringement, and importation all subser-
vient to § 109(a). In the Copyright Act, the § 109(a) grant
to copy owners overrides other requirements of authority
from the rights holder, specifically those governing impor-
tation and sale. That is not so in the Patent Act, under
which exhaustion textually can be nothing but an answer
to a statutory question of when a patentee has, by a sale,
conferred such authority.
Section 109(a)’s language, which gives an owner an
entitlement to resell “without the authority of the copy-
right owner,” does not make that entitlement depend on
an assessment of whether a first sale made or authorized
by the copyright holder confers resale authority on the
buyer. The right to resell is given to the “owner” of an
article “lawfully made” under the Act. The “owner” lan-
guage—whose meaning was not at issue in Kirtsaeng—
says nothing about where ownership is acquired and does
not require a prior sale at all: a copy made by the person
who owns it, as long as the making was authorized, is
within § 109(a)’s language. See 133 S. Ct. at 1361 (dis-
cussing 17 U.S.C. § 115); 2 Melville B. Nimmer & David
Nimmer, Nimmer on Copyright § 8.12[B][3][c] (2015).
LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC. 67
Even when ownership comes from a sale, moreover, the
provision prescribes the result for the owner’s resale
entitlement in terms not dependent on “authority” from
the copyright holder but as independent of any such
authority. And the remaining requirement stated by the
language at issue in Kirtsaeng—“lawfully made under
this title”—undeniably refers only to the manufacture of
the copy and whether that manufacture was lawful. That
language, like the “owner” language, leaves no place for
consideration of the location of a prior sale (if there was
one), which is the issue here.
Years before deciding Kirtsaeng, the Court in Quality
King had made clear that the language of § 109(a) makes
sale location irrelevant: under that language, “the owner
of goods lawfully made under the Act is entitled to the
protection of the first sale doctrine in an action in a Unit-
ed States court even if the first sale occurred abroad.”
523 U.S. at 145 n.14. The Court in Kirtsaeng confirmed
the point. 133 S. Ct. at 1371 (noting the “holding in
Quality King that § 109(a) is a defense in U.S. courts even
when ‘the first sale occurred abroad’ ”). Not surprisingly,
neither party in Kirtsaeng argued that the provision could
be read to refer to the sale location. 15 And the Court
15 The Second Circuit in Kirtsaeng had held that
§ 109(a) was inapplicable whenever the copy had been
made abroad, John Wiley & Sons, Inc. v. Kirtsaeng, 654
F.3d 210, 222 (2d Cir. 2011), and Kirtsaeng’s “question
presented” to the Supreme Court was “whether the copy-
right owner is entitled to control downstream sales just
because it opts to manufacture the copies abroad.” Brief
for Petitioner at i, Kirtsaeng (No. 11-697), 2012 WL
2641850. Kirtsaeng noted once in passing that a sale-
location standard “sacrifices any pretense of fidelity to the
statutory text” of § 109(a). Id. at 25. Wiley similarly
recognized that “[t]he question presented is whether
68 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
readily dismissed a sale-location view as “not defensible”
and facing “linguistic and other hurdles that . . . are
insurmountable.” Id. at 1366. With sale location off the
table, the dispute in Kirtsaeng was simply between two
different interpretations of the statutory reference to
manufacture (“lawfully made under this title”)—whether
it referred to where manufacture occurred (the “geograph-
ic” interpretation) or to whether the manufacture was
lawful under the standards of the Copyright Act (e.g.,
with the copyright owner’s permission, as opposed to
pirated). For that reason, whether an “implied license”
would arise from sales in some circumstances was imma-
terial to the statutory question being debated, and the
Court did not comment on that notion, despite its mention
in the dissent, 133 S. Ct. at 1389 & n.25 (Ginsburg, J.,
dissenting), and the government’s brief, Brief for the
United States as Amicus Curiae Supporting Respondent
at 21, Kirtsaeng (No. 11-697), 2012 WL 3902599.
In short, given the nature of the question framed by
§ 109(a), the Court in Kirtsaeng did not have occasion to
decide, and did not decide, whether a foreign sale (by or
authorized by the U.S. rights holder) is properly treated
as conferring on the buyer, conclusively or presumptively,
the authority to resell. The Court did not decide, even for
copyrights, the question presented here for patents.
copies made outside the United States are ‘lawfully made
under this title’ within the meaning of Section 109(a).”
Brief for Respondent at i, Kirtsaeng (No. 11-697), 2012
WL 3836936. Wiley explained that the relevance of sale
location was not being argued; and it nowhere argued
that the sale of the books outside the United States, as
opposed to their manufacture outside the United States,
defeated exhaustion. Id. at 37–38.
LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC. 69
The nature of the statutory question decided in
Kirtsaeng also shows why the Court’s discussion of con-
siderations supporting its textual conclusion cannot be
transposed to the patent-law setting at issue here. The
discussion of the statutory history and certain provisions
of the Copyright Act, 133 S. Ct. at 1360–62, 1370, is
statute-specific. And the Court’s discussion of the absence
of any constitutional history or congressional action
permitting market division was limited to the copyright
area. Id. at 1370–71. Compare 35 U.S.C. § 261 (patentee
may assign rights “to the whole or any specified part of
the United States”).
Similarly, the Court’s discussion of Lord Coke’s 1628
description of his country’s general judicial personal-
property law, id. at 1363–64, is inapplicable here. That
description, as already explained, is apt background for a
provision, like § 109(a), that is superior to any legislative
grant of rights that cover post-purchase activities of a
buyer. The Patent Act contains no such override of the
Act’s grant of rights to patentees. And the Court in
Kirtsaeng drew from Lord Coke’s description only a gen-
eral recognition of “the importance of leaving buyers of
goods free to compete with each other when reselling or
otherwise disposing of those goods,” adding that American
antitrust law recognizes a similar point. 133 S. Ct. at
1363. That observation merely confirms that the result of
the § 109(a) analysis is sensible because it fits one policy
found in aspects of American and British law containing
no specific statutory override. And the Court then cited
Bobbs-Merrill, which construed the pre-1909 copyright
statute not to contain an override in the circumstances at
issue, 210 U.S. at 349–51, and noted that the next year,
Congress adopted that result by enacting the statutory
predecessor of § 109(a). Kirtsaeng, 133 S. Ct. at 1363–64.
In addition, the Court’s account of the potential real-
world consequences of the statutory interpretation it was
70 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
rejecting, though it mentions sale location a few times, is
pervasively tied to the issue actually in dispute—whether
a foreign manufacture location makes § 109(a) inapplica-
ble. 133 S. Ct. at 1364–67. Under that interpretation, the
Court stated, the rights holder would have “permanent”
control, id. at 1362, “perpetual downstream control,” id. at
1371, of copies circulating in the United States as long as
those copies had been made abroad: § 109(a) would not
kick in to give resale rights to purchasers of those copies
even if the copyright holder sold the article in the United
States. See also id. at 1366 (referring to “the absurd
result that the copyright owner can exercise downstream
control even when it authorized the import or first sale”).
As the government notes to us, the Patent Act, which
lacks a provision like § 109(a), is quite different: “there is
no concomitant risk of ‘perpetual downstream control’
over patented goods.” U.S. Br. 24. At the very least, an
unrestricted patentee-made or -authorized sale in the
U.S. triggers exhaustion as to the article sold.
Moreover, the “copyright-related consequences” em-
phasized by the Court in Kirtsaeng, 133 S. Ct. at 1367,
were to a large extent, though not entirely, tied to the
distinctive problems of museums, libraries, and
booksellers. Id. at 1364–67. To that extent, the Court’s
overall analysis of plausible practical effects—of an inter-
pretation keeping every foreign-made copy forever outside
§ 109(a)—was copyright-specific. The Court in Kirtsaeng
also concluded that circuit-court precedent on § 109(a)
was too fractured to give meaningful comfort that the
practical problems from the Court’s adoption of Wiley’s
view of § 109(a) were unlikely to materialize. Id. at 1366.
In contrast, our exclusive jurisdiction and clear rule since
2001, together with the pre-2001 precedents from other
courts, provide considerably more reason to discount
predictions that adhering to a territorial line to make
LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC. 71
exhaustion unavailable based on a foreign sale will result
in serious practical problems.
For all of those reasons, Kirtsaeng is not controlling in
this case. The patent-law issue presented here requires a
separate analysis in its own legal setting.
C
The Patent Act question is whether a foreign sale of a
U.S.-patented article made or authorized by a U.S. pa-
tentee, standing alone, confers on the buyer authority to
import the article into the United States and sell and use
it here, even though such an act would be infringing in
the absence of authority. The best answer to that ques-
tion, we conclude, is that such a foreign sale does not
confer such authority. A U.S. patentee, simply by making
or authorizing a foreign sale of an article, does not waive
its U.S. rights to exclude regarding that article, either
conclusively (no matter how clear the reservation of U.S.
rights) or only presumptively (subject to sufficiently clear
preservation of U.S. rights).
1
The combined logic of the statutory grant of patent
rights and the long-recognized basis for exhaustion leads
naturally to rejecting exhaustion based on a foreign sale.
The statute gives patentees the reward available from
American markets. A patentee cannot reasonably be
treated as receiving that reward from sales in foreign
markets, and exhaustion has long been keyed to the idea
that the patentee has received its U.S. reward.
Thus, what the statute expressly provides to a U.S.
patentee is the reward available from the right to exclude
“in the United States.” See 35 U.S.C. §§ 154(a)(1),
72 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
271(a). 16 The reward is inherently a market reward: “it is
one of the legal beauties of the system that what is given
by the people through their government—the patent
right—is valued automatically by what is given by the
patentee. His patent has value directly related to the
value of his invention, as determined in the marketplace.”
In re Kirk, 376 F.2d 936, 964 (CCPA 1967) (Rich, J.,
dissenting). 17 And the market reward, under the statute,
is explicitly the reward available from American markets
subject to American laws, a reward obtained by selling or
authorizing sales in those markets.
16 Congress has added certain limited extensions to
foreign conduct. See 35 U.S.C. § 271(f). Those limited
extensions are not applicable here and only strengthen
the essential guarantee of a U.S.-market reward.
17 See Bonito Boats, Inc. v. Thunder Craft Boats,
Inc., 489 U.S. 141, 150–51 (1989) (“The federal patent
system thus embodies a carefully crafted bargain for
encouraging the creation and disclosure of new, useful,
and nonobvious advances in technology and design in
return for the exclusive right to practice the invention for
a period of years.”); Fed. Trade Comm’n, Evolving IP
Marketplace 138–39 (“An important benefit of the patent
system, in contrast to other methods of encouraging
innovation, like direct prizes, is that it allows each inven-
tion to be valued directly through a market mechanism.”)
(citing Kenneth W. Dam, The Economic Underpinnings of
Patent Law, 23 J. Legal Stud. 247, 248–49 (1994); Joseph
Farrell, John Hayes, Carl Shapiro & Theresa Sullivan,
Standard Setting, Patents and Hold-Up, 74 Antitrust L.J.
603 (2007)); see also Aro II, 377 U.S. at 507 (patent “dam-
ages” tied to market valuation); Dowagiac Mfg. Co. v.
Minnesota Moline Plow Co., 235 U.S. 641, 648 (1915)
(reasonable royalty measures “the value of what was
taken” by infringement, necessarily a market value).
LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC. 73
At the same time, the Supreme Court has “explained
the basis for [exhaustion] doctrine” in terms of the pa-
tentee’s receipt of the reward given by the statute. Bow-
man, 133 S. Ct. at 1766. “ ‘The purpose of the patent law
is fulfilled with respect to any particular article when the
patentee has received his reward . . . by the sale of the
article.’ ” Id. (quoting Univis, 316 U.S. at 251, itself citing
earlier authorities). Only when it is appropriate to as-
sume the receipt of that reward does the sale support an
inference of conferral of authority on an article’s buyer (in
the absence of clearly communicated restrictions on the
authority conferred).
Whatever other issues may be presented by determin-
ing when a patentee has “received his reward,” the terri-
torial nature of the statutory guarantee supplies a simple,
strong reason to exclude foreign sales. The guarantee is
the reward from sales in American markets, not from
sales in foreign markets. A sale in a foreign market
therefore does not furnish “the basis for” exhaustion—
even for a presumption that authority is being conferred
on the buyer to exploit the article in American markets by
the actions (importation, sale, use, etc.) that are infring-
ing in the absence of patentee-conferred authority.
American markets differ substantially from markets
in many other countries, and not just because of dispari-
ties in wealth that can lead to dramatically different
prices (especially for low-marginal-cost products). Gov-
ernment policies differ dramatically, including policies on
price regulation and, most particularly, policies on the
availability and scope of patent protection. Patents
74 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
involve costly government-approval processes, and the
standards vary. 18 The government explains:
The independence of national patent sys-
tems . . . is one of the defining principles of the in-
ternational legal regime governing the protection
of inventions. The United States has ratified the
Paris Convention for the Protection of Industrial
Property, originally adopted more than a century
ago, which specifically provided in Article 4bis
18 See, e.g., Robert Patrick Merges & John Fitzgerald
Duffy, Patent Law and Policy: Cases and Materials 55
(5th ed. 2011); Graeme B. Dinwoodie, William O. Hennes-
sey, & Shira Perlmutter, International and Comparative
Patent Law § 2.03 at 53–54 (2002); John Gladstone Mills
III, A Transnational Patent Convention for the Acquisition
and Enforcement of International Patent Rights, 88 J. Pat.
& Trademark Off. Soc’y 958, 958–59 (2006); Margaret A.
Boulware, Jeffrey A. Pyle, & Frank C. Turner, An Over-
view of Intellectual Property Rights Abroad, 16 Hous. J.
Int’l L. 441, 458–59 (1994).
A few dollar figures provide some context. For a U.S.
patent, the minimum application fee is $2,560 (covering
only the basic filing, search, examination, and issue fees).
See USPTO Fee Schedule, U.S. Patent & Trademark
Office, http://www.uspto.gov/learning-and-resources/fees-
and-payment/uspto-fee-schedule. As for lawyers’ charges
for preparing and prosecuting a patent application, a 2015
report indicated that the median charge to prepare a
minimally complex utility patent application is $7,000,
with responses to Office Actions ranging from $2,000 to
$3,200 each. Am. Intellectual Prop. Law Ass’n, Report of
the Economic Survey 29 (2015). For an example of filing
fees for patents abroad, see European Patent Office,
Schedule of Fees, http://www.epoline.org/myepoline_eofp
_portletapp-2.8.3/fees/pdf?language=en.
LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC. 75
that “Patents applied for in the different contract-
ing States . . . shall be independent of the patents
obtained for the same invention in the other
States . . . .” 32 Stat. 1936 (Aug. 25, 1902). While
international agreements facilitate the ability of
inventors in one country to seek patent protection
in others, the patents laws of each country are not
reciprocal in their protections for particular in-
ventions. As every patent attorney knows, the
United States may issue a patent while another
country denies protection for the same invention,
or approves claims significantly different in scope.
U.S. Br. 15–16.
Copyrights are different. They generally spring into
being without any government approval, and standards
hardly vary compared to patenting standards. As the
government says, “patent law is different from copyright
law, under which authors automatically ‘enjoy copyright
protection in nations across the globe’ pursuant to the
Berne Convention for the Protection of Literary and
Artistic Works.” U.S. Br. 16 (quoting Golan v. Holder,
132 S. Ct. 873, 878 (2012)); see Golan, 132 S. Ct. at 878
(referring to “Berne’s 164 member states”). 19 And there is
no reason to think that the costs of copyright registration
(not even a prerequisite to all copyright protection) are
19 It has been noted that, as a matter of statutory
text, “of the three principal forms of [federally protected]
intellectual property [copyright, patent, trademark],
patent rights are the most explicitly territorial.” Donald
S. Chisum, Normative and Empirical Territoriality in
Intellectual Property: Lessons from Patent Law, 37 Va. J.
Int’l L. 603, 605 (1997); see Dinwoodie et al., § 1.03 at 30.
76 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
generally comparable to those of securing patent protec-
tion. 20
Given the varying standards, and the separate exam-
ination processes and fees, a U.S. patentee may choose
not even to seek patent protection in particular foreign
countries. And those seeking protection may not obtain
it, or may not obtain protection comparable to that of the
U.S. patent. In either event, foreign sales in such circum-
stances may not occur under protections likely to produce
market returns comparable to the reward contemplated
by our patent law. Such country-to-country differences in
patent law, moreover, are only part of the likely differ-
ences affecting foreign sales, supplementing differences in
economic circumstances and in governments’ price and
other non-patent regulations bearing on sales.
For those reasons, a foreign sale, standing alone, is
not reasonably viewed as providing the U.S. patentee the
reward guaranteed by U.S. patent law. Such a sale is not
reasonably viewed as itself a waiver by the patentee of its
U.S. patent rights to prevent the buyer or others from
bringing that article into the United States and selling or
using it to satisfy a U.S.-market demand that the patent-
ee could otherwise help satisfy at U.S.-market prices, as
guaranteed by the Patent Act.
20 The application fee for a U.S. copyright registra-
tion is $35. Fees, U.S. Copyright Office,
http://copyright.gov/ about/fees.html. The same 2015
Survey that gives a median charge of $7,000 for legal
services for preparing a minimally complex patent appli-
cation (before the back-and-forth of prosecution occurs)
gives a figure of $400 for services to prepare an applica-
tion for a copyright registration. Am. Intellectual Prop.
Law Ass’n, Report at 29.
LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC. 77
2
The only Supreme Court decision directly addressing
the effect of a foreign sale on U.S. patent rights is the
1890 decision in Boesch v. Graff, 133 U.S. 697. Albert
Graff and J.F. Donnell, by assignments, held an 1883 U.S.
patent on certain lamp burners. Without their permis-
sion, Emile Boesch and Martin Bauer sold patent-covered
burners in the United States. Boesch and Bauer had
bought those burners from a supplier in Germany, with-
out permission from the holders of the rights under Ger-
man patents (dated 1879–1880), which had been issued to
the same individuals as the U.S. patent. The German
supplier was authorized to make the sale to Boesch and
Bauer, not by the German patentees, but by a German
law that allowed continuation of certain preparatory
activities that began before the application for the Ger-
man patents was filed. 133 U.S. at 698–99, 701–02.
When Graff and Donnell sued Boesch and Bauer for
infringement, the single-judge circuit court for the North-
ern District of California found infringement, and the
Supreme Court affirmed that holding. Id.
The Court rejected Boesch and Bauer’s defense that
they “could not be held for infringement, because they
purchased the burners in Germany from a person having
the right to sell them there, though not a licensee under
the German patents.” Id. at 699. The Court stated “the
exact question presented [a]s whether a dealer residing in
the United States can purchase in another country arti-
cles patented there, from a person authorized to sell them,
and import them to and sell them in the United States,
without the license or consent of the owners of the United
States patent.” Id. at 702. In answering the question, the
Court recited the then-leading decisions on domestic
exhaustion, culminating in Adams, which, the Court
observed, held that, within the confines of the United
States, the courts would not add an unexpressed territo-
78 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
rial limit to the rights conferred by an unrestricted sale by
a regional assignee. Id. at 703. The Court then concluded
that the cross-border situation was different. Its full
rationale was as follows:
The right which [the German seller] had to make
and sell the burners in Germany was allowed him
under the laws of that country, and purchasers
from him could not be thereby authorized to sell
the articles in the United States in defiance of the
rights of patentees under a United States patent.
A prior foreign patent operates under our law to
limit the duration of the subsequent patent here,
but that is all. The sale of articles in the United
States under a United States patent cannot be
controlled by foreign laws.
Id.
That rationale by its terms does not make relevant
whether the foreign sale was made under a foreign pa-
tent. Indeed, the second sentence says that a “prior
foreign patent” does not cause loss of U.S. patent rights.
Rather, the rationale turns only on the fact that the
foreign sale was made under foreign law. 21 The last
sentence states the territorial principle: “The sale of
articles in the United States under a United States patent
cannot be controlled by foreign laws.” Id.
That principle does not preclude an accused infringer
from establishing that the U.S. patentee actually gave it a
21The “duration” language refers to a sentence in
Rev. Stat. 4887 that tied certain U.S. patents’ expiration
dates to those of related foreign patents. See Robinson,
§ 337, at 461. Congress deleted the provision in 1897.
Act of Mar. 3, 1897, ch. 391, § 3, 29 Stat. 693; see H.R.
Rep. No. 1923, at 38 (1952).
LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC. 79
license, expressly or by implication. It means that the
exhaustion doctrine does not treat a foreign sale, lawful
abroad for whatever reason, as having the cross-border
legal effect of authorizing otherwise-infringing U.S. acts
involving the purchased article. And that is how the
principle has been understood by the Supreme Court. See
Keeler, 157 U.S. at 664–65 (“The exact question presented
was whether a dealer residing in the United States could
purchase in another country articles patented there from
a person authorized there to sell them, and import them
to and sell them in the United States without the license
or consent of the owners of the United States patent, and
the court held that the sale of articles in the United
States under a United States patent cannot be controlled
by foreign laws. In this case neither the patentee nor any
assignee had ever received any royalty or given any
license to use the patented article in any part of the
United States.”); A. Bourjois & Co. v. Katzel, 260 U.S. 689,
692 (1923) (trademark case, explaining: “Ownership of
[particular] goods . . . does not necessarily carry the right
to sell them at all in a given place. If the goods were
patented in the United States a dealer who lawfully
bought similar goods abroad from one who had a right to
make and sell them there could not sell them in the
United States. Boesch . . . .”).
The principle of Boesch, precluding foreign control of
U.S. rights, has a mirror-image counterpart in the territo-
riality principle of U.S. patent law that broadly denies
projection of U.S. patent rights to cover foreign conduct.
In Brown v. Duchesne, 60 U.S. (19 How.) 183 (1857), the
Supreme Court, referring to the patent statutes, said that
“these acts of Congress do not, and were not intended to,
operate beyond the limits of the United States.” Id. at
195. The Court also explained the guaranteed reward
from domestic markets: the patent laws “secure to the
inventor a just remuneration from those who derive a
80 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
profit or advantage, within the United States, from his
genius and mental labors.” Id.; see, e.g., Dowagiac, 235
U.S. at 650 (“The right conferred by a patent under our
law is confined to the United States and its territories
(Rev. Stat. § 4884, Comp. Stat. 1913, § 9428), and in-
fringement of this right cannot be predicated of acts
wholly done in a foreign country.”).
The Supreme Court relied on the strength of the
territorial principle in Deepsouth Packing Co. v. Laitram
Corp., 406 U.S. 518 (1972), which rejected a claim of
infringement against Deepsouth just because the ultimate
combination covered by the patent was made abroad,
after Deepsouth shipped all the parts from the United
States. The Court explained:
Our patent system makes no claim to extraterri-
torial effect; “these acts of Congress do not, and
were not intended to, operate beyond the limits of
the United States,” Brown v. Duchesne, 19 How.,
at 195 (1856), and we correspondingly reject the
claims of others to such control over our markets.
Cf. Boesch v. Graff, 133 U.S. 697, 703 (1890).
406 U.S. at 531.
In Microsoft Corp. v. AT&T Corp., 550 U.S. 437 (2007),
the Supreme Court quoted the foregoing passage from
Deepsouth as support for “[t]he traditional understanding
that our patent law ‘operate[s] only domestically and
do[es] not extend to foreign activities,’ . . . [which] is
embedded in the Patent Act itself, which provides that a
patent confers exclusive rights in an invention within the
United States. 35 U.S.C. § 154(a)(1) (patentee’s rights
over invention apply to manufacture, use, or sale
‘throughout the United States’ and to importation ‘into
the United States’).” Id. at 455. And the Court added:
As a principle of general application, moreover, we
have stated that courts should “assume that legis-
LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC. 81
lators take account of the legitimate sovereign in-
terests of other nations when they write American
laws.” F. Hoffmann-La Roche Ltd. v. Empagran
S. A., 542 U.S. 155, 164 (2004); see EEOC v. Ara-
bian American Oil Co., 499 U.S. 244, 248 (1991).
Thus, the United States accurately conveyed in
this case: “Foreign conduct is [generally] the do-
main of foreign law,” and in the area here in-
volved, in particular, foreign law “may embody
different policy judgments about the relative rights
of inventors, competitors, and the public in patent-
ed inventions.” Brief for United States as Amicus
Curiae 28.
Id. (emphasis added). The Court then applied the pre-
sumption of congressional respect for territorial limits in
patent law to interpret the very provision, § 271(f), that
Congress had enacted (in 1984) to supersede Deepsouth,
explaining that the presumption “remains instructive in
determining the extent of the statutory exception” to the
strict territorial limits elsewhere stated in the statute.
Id. at 456.
The principles thus expressed, perhaps especially the
sentence highlighted in the quote just above, recognize
what we noted above: Patent law is especially territorial,
and laws vary considerably from country to country. The
Supreme Court’s recognition of those points reinforces our
conclusion that foreign markets are not the predictable
equivalent of the American markets in which the U.S.
patentee is given a right to exclude and the rewards from
that exclusivity. The Court’s closest patent-law prece-
dents thus support our holding that sales in foreign
markets should not be presumed to confer on the buyer
authority to displace sales in American markets.
82 LEXMARK INT’L, INC. v. IMPRESSION PRODS., INC.
3
Congress has not enacted a general provision of the
Patent Act specifically addressed to foreign-sale exhaus-
tion of U.S. patent rights. Congress has left the general
issue to judicial resolution.
When the subject arose in the Uruguay round of mul-
tilateral negotiations that led to the Agreement on Trade-
Related Aspects of Intellectual Property Rights (TRIPS),
the parties agreed not to address the subject, stating, in
article 6, that “nothing in this Agreement shall be used to
address the issue of the exhaustion of intellectual proper-
ty rights.” TRIPS, Apr. 15, 1994, 33 I.L.M. 1197, 1200,
quoted in Kirtsaeng, 133 S. Ct. at 1383 (Ginsburg, J.,
dissenting). And when Congress implemented the inter-
national agreement through the 1994 legislation that
(among other things) added the new importation ban to
§ 271(a), the accompanying Statement of Administrative
Action—which Congress deemed authoritative, 19 U.S.C.
§ 3512(d)—stated that “[t]he Agreement . . . does not
affect U.S. law or practice relating to parallel importation
of products protected by intellectual property rights.”
H.R. Rep. No. 103-316, at 633, 981 (1994), reprinted in
1994 U.S.C.C.A.N. 4040, 4280. The recent Trans Pacific
Partnership agreement includes a similar disclaimer,
reserving the parties’ rights to make other international
agreements on the subject. See Trans-Pacific Partnership
art. 18.11 & n.8, Oct. 5, 2015, https://ustr.gov/trade-
agreements/free-trade-agreements/trans-pacific-partnersh
ip/tpp-full-text.
Congress did a
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