Page:Impression Products, Inc. v. Lexmark Int’l, Inc. Decision.pdf/22

Rh sale authorized by the U. S. patentee exhausts U. S. patent rights unless those rights are expressly reserved.” Brief for United States 7–8. Its position is largely based on policy rather than principle. The Government thinks that an overseas “buyer’s legitimate expectation” is that a “sale conveys all of the seller’s interest in the patented article,” so the presumption should be that a foreign sale triggers exhaustion. Id., at 32–33. But, at the same time, “lower courts long ago coalesced around” the rule that “a patentee’s express reservation of U. S. patent rights at the time of a foreign sale will be given effect,” so that option should remain open to the patentee. Id., at 22 (emphasis deleted).

The Government has little more than “long ago” on its side. In the 1890s, two circuit courts—in cases involving the same company—did hold that patentees may use express restrictions to reserve their patent rights in connection with foreign sales. See Dickerson v. Tinling, 84 F. 192, 194–195 (CA8 1897); Dickerson v. Matheson, 57 F. 524, 527 (CA2 1893). But no “coalesc[ing]” ever took place: Over the following hundred-plus years, only a smattering of lower court decisions mentioned this express-reservation rule for foreign sales. See, e.g., Sanofi, S. A. v. Med-Tech Veterinarian Prods., Inc., 565 F. Supp. 931, 938 (NJ 1983). And in 2001, the Federal Circuit adopted its blanket rule that foreign sales do not trigger exhaustion, even if the patentee fails to expressly reserve its rights. Jazz Photo, 264 F. 3d, at 1105. These sparse and inconsistent decisions provide no basis for any expectation, let alone a settled one, that patentees can reserve patent rights when they sell abroad.

The theory behind the Government’s express-reservation rule also wrongly focuses on the likely expectations of the patentee and purchaser during a sale. Exhaustion does not arise because of the parties’ expectations about how sales transfer patent rights. More is at