No exhaustion doctrine for “method-of-use” patents – Iwncomm v. Sony decision in China

Earlier this year, the Beijing IP Court issued a landmark decision in the Iwncomm v. Sony case, which clarified a number of interesting issues relating to standard essential patents (SEP). The court ruled that Sony had infringed an SEP held by the Chinese company Iwncomm and granted, besides damages for past infringement, the first injunction based on an SEP in China. In the same decision, the court addressed another important question concerning the applicability of the exhaustion doctrine. Under the doctrine, once an authorized sale of a patented product or a product obtained by using a patented manufacturing method occurs, the patent holder’s exclusive rights to control the use and sale of that product are said to be “exhausted,” and the purchaser is free to use or resell that product without further restraint from the relevant product patent or method-of-manufacture patent. It was nevertheless unclear from the existing case law, whether the exhaustion doctrine shall also be applied to a method patent that protects a method of using an existing product(s) (method-of-use patent), until the Sony decision now answered this question clearly in negative. This decision may thus provide an important guidance for future cases. However, when compared with more balanced approaches in other jurisdictions, which I will briefly discuss in this post, this guidance does not appear unquestionable. Continue reading “No exhaustion doctrine for “method-of-use” patents – Iwncomm v. Sony decision in China”