10/22/2018

Part of a Larger Whole: How Combination Patents Show That Patent Exhaustion is Part of Patent Misuse


Part of a Larger Whole: How Combination Patents Show That Patent Exhaustion is Part of Patent Misuse

David B. Orange

The Supreme Court recently explained that selling a patented product “marks the point where patent rights yield to the common law principle against restraints on alienation.” This paper considers the law governing when an owner has a patent on a combination of parts, and sells one of the parts to a consumer. Currently, when a patent owner sells part of a patented combination, we apply an analysis that is similar to indirect infringement, and if no infringement exists at the time of sale, we assign all rights to the patent owner because we have only considered the exhaustion doctrine as though it were a distinct area of law. However, the present approach ignores that the sale was authorized and unconditional, so even if the entire patented combination was not exhausted, the consumer should not be in the same position as if the sale were unauthorized. Consequently, the exhaustion of combination patents leads to the same result as in Impression Products. 

100 J. Pat. & Trademark Off. Soc’y 130(2018)

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