Setting the Stage – IP Exhaustion
IP rights are neither perpetual nor limitless. In fact, IP rights are inter alia limited in scope, duration and by express exceptions. A sometimes forgotten limitation of IP rights is exhaustion, or the “first sale doctrine”, which is the name it bears in the U.S.
In essence, the IP right related to a certain article is considered to be exhausted once it has been sold with the consent of the IP holder. From a geographical perspective, two alternative principles (leading to very different outcomes) can be distinguished. The first one is national exhaustion, which entails that only a sale of an article within the relevant national territory would exhaust the IP right. According to a second principle, such territorial distinction is not recognized, i.e., a sale anywhere in the world can exhaust the IP right (international exhaustion).
In the U.S., the United States Court of Appeals for the Federal Circuit (Federal Circuit) as well as the Supreme Court of the United States (SCOTUS) have considered the question of exhaustion from many different perspectives in their earlier judgments. In this article, I will discuss the judgment of the SCOTUS in a quite recent case regarding exhaustion, Impression v. Lexmark. The judgment was handed down on 30 May 2017.