When was the last time you sold your used car and worried about infringing the patent rights of the manufacturer? My guess is you would say “never.” It’s not as if people are selling their pre-owned cars on eBay or Craigslist (for example) and being sued for patent infringement by the likes of GM, Ford or Toyota. But think about it—the modern automobile includes tons of technology that is covered by literally thousands of patents. And U.S. patent law permits a patent owner to “exclude others from making, using, offering for sale, or selling its invention throughout the United States …,” (35 U.S.C. Section 154(a)). If patented technology is sold “without authority” from the patent owner, then patent infringement has occurred (35 U.S.C. Section 271(a)). So why is there no lawsuit every time a used car is sold?
Enter the doctrine of “patent exhaustion.” The first authorized sale of a patented product “exhausts” the patent rights, thus terminating the patent owner’s ability to pursue patent infringement damages for that product. After an authorized transaction involving a patented product has occurred, the patent owner cannot make an infringement claim for a subsequent sale of that product.
