Legal Definitions - exhaustion

Exhaustion, in patent law, refers to a fundamental principle stating that once a patent owner, or someone authorized by them, makes an initial sale of a patented product, their exclusive rights over that specific item are considered "exhausted."

This means that the buyer of that particular product is then free to use, lend, or resell it without needing further permission from the patent holder and without fear of being sued for patent infringement. The patent owner's control over that individual item ends with its first authorized sale. It's important to note that this doctrine applies to the specific physical item sold, not to the underlying patent rights themselves, which still prevent others from manufacturing new copies of the patented invention. While patent exhaustion prevents a patent infringement lawsuit, a patent owner might still be able to enforce specific contractual agreements made at the time of sale; a violation of such an agreement would typically be a breach of contract, not patent infringement.

Here are some examples illustrating the concept of patent exhaustion:

• Imagine a company, RoboFab Innovations, holds a patent for a unique robotic arm used in manufacturing. When RoboFab sells one of these patented robotic arms to an automobile assembly plant, AutoWorks Inc., RoboFab's patent rights over that specific robotic arm are exhausted. AutoWorks Inc. can then use the arm in its production line, sell it to another factory if they upgrade their equipment, or even lease it out, all without infringing RoboFab's patent. RoboFab cannot dictate how AutoWorks Inc. uses or disposes of that particular robot arm after the initial authorized sale.

• Consider a consumer who purchases a patented, specialized water filtration system from its inventor, PureFlow Technologies. Once the consumer buys the filtration system, PureFlow Technologies' patent rights over that specific unit are exhausted. The consumer is free to install it in their home, give it to a family member, or sell it on a second-hand market without PureFlow Technologies being able to claim patent infringement. The company's control over that individual filtration system ends with its authorized sale.

• Let's say a small electronics repair shop, Circuit Fixers, buys a patented diagnostic tool from its manufacturer, TechScan Corp., which holds the patent for the tool's unique internal circuitry. After Circuit Fixers purchases the tool, TechScan Corp.'s patent rights over that specific diagnostic tool are exhausted. Circuit Fixers can use the tool to repair customer devices, lend it to another technician, or even sell it if they decide to upgrade their equipment, all without infringing TechScan Corp.'s patent. TechScan Corp. cannot control the subsequent use or resale of that particular tool once it has been sold.