Reuse, Recycle, and Repurpose: A Big Supreme Court Win for Thrifty Businesses

Good For The Environment (And Your Wallet):

If you've ever thought about reusing, recycling, or repurposing a product to save money and resources, you're not the only one. In fact, many companies in the U.S. and across the globe base their business models on this very concept. One such company is Impression Products, Inc. ("Impression Products"), which recently won a seven-year patent battle against Lexmark International, Inc. ("Lexmark") at the U.S. Supreme Court. Click here to read the Supreme Court's decision in Impression Products, Inc. v. Lexmark International, Inc.

Background of the Case:

Lexmark is an international company with over 12,000 employees worldwide, specializing in laser printers and related supplies, including toner cartridges—for which Lexmark owns several U.S. patents. Impression Products is a 25-employee company located in West Virginia, which got in legal trouble for purchasing empty Lexmark toner cartridges abroad, and then refilling and reselling those toner cartridges at a lower price in the U.S. Specifically, Lexmark had originally sold their toner cartridges to consumers abroad, which Impression Products then bought used from those consumers and imported into the U.S.

The issue at the heart of the dispute between Lexmark and Impression Products was whether Impression Products' international and domestic activities constituted infringement of Lexmark's patents on their toner cartridges. Lexmark argued that Impression Products was violating Lexmark's exclusive right to make, use, sell, import, and distribute its patented toner cartridges. Impression Products, on the other hand, argued that Lexmark had "exhausted" its patent rights under U.S. patent law by making authorized sales of the toner cartridges abroad.

The Supreme Court Decision:

In a seven-to-one decision (with Justice Ginsberg dissenting on the issue of international exhaustion), the Supreme Court held in favor of Impression Products, holding that Lexmark could not sue Impression Products for patent infringement because Lexmark had exhausted its patent rights when it sold toner cartridges to consumers abroad. In other words, a patent owner cannot enforce its patent rights with respect to a particular product after making an authorized sale of that very product either internationally or in the U.S.

What This Means going forward:

The Supreme Court's decision in Impression Products, Inc. v. Lexmark International, Inc. is a big win for thrifty businesses who similarly reuse, recycle, and repurpose other companies' patented products—not just limited to the printer world—because it eliminates the patent owners' rights to sue for patent infringement. (However, that doesn't mean the patent owner doesn't have valid claims against those businesses for breach of contract, trademark infringement, trademark dilution, and so on.)


 

At Res Nova Law, our experienced intellectual property and business attorneys can help you resolve your intellectual property dispute, whether it involves patents, trademarks, copyrightstrade secrets, or all the above. Whether the clearest path to resolution is alternative dispute resolution (i.e., mediation or arbitration), settlement, or trial, we’ll work with you to achieve the best possible outcome.

Get in touch today for a free, 20-minute initial consultation.