ARTICLE: THE CONDITIONAL SALE DOCTRINE IN A POST-QUANTA WORLD AND ITS IMPLICATIONS ON MODERN LICENSING AGREEMENTS Skip over navigation
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Copyright (c) 2011 The John Marshall Law School
The John Marshall Law School Review of Intellectual Property Law

ARTICLE: THE CONDITIONAL SALE DOCTRINE IN A POST-QUANTA WORLD AND ITS IMPLICATIONS ON MODERN LICENSING AGREEMENTS

Winter, 2011

The John Marshall Law School Review of Intellectual Property Law

11 J. Marshall Rev. Intell. Prop. L. 295

Author

WILLIAM LAFUZE, JUSTIN CHEN AND LAVONNE BURKE *

Excerpt

INTRODUCTION

Under federal law of the United States of America, a patent owner is granted rights to exclude others from making, using, or selling patented inventions within the geographical reaches of the United States. 1 This exclusive right, however, is limited by the doctrine of patent exhaustion, which states that upon the first authorized sale in the United States of a patented article, the article is removed from the patent monopoly and thus loses its patent protection. 2 As a result of this first sale, any subsequent use or sale is not an infringement of the patent. 3 The theory of patent exhaustion, its history, and its application to modern licensing and sales following the Supreme Court case of Quanta Computer, Inc. v. LG Elecs., Inc. 4 will be examined in this article.

Historically, in patent law jurisprudence, a "conditional sale" is a sale in which the patentee restricts the post-sale rights of a purchaser to use the patent article through an enforceable contract. 5 Prior to Quanta, the Court of Appeals for the Federal Circuit ("Federal Circuit") precedent stated that a conditional sale could prevent patent exhaustion and preserve the patentee's right to sue for infringement if the conditions of the sale were not met or violated. 6 The Court's decision in Quanta failed to address conditional sales, and therefore, seemed to go directly against Mallinckrodt, Inc. v. Medipart, Inc., 7 a landmark case where the Federal Circuit held that ...
 
 
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