Impression Products, Inc. v. Lexmark Int'l, Inc.
The Supreme Court ruled that once Lexmark sells a toner cartridge, it gives up its patent rights over that cartridge for good, no matter what restrictions it puts in the sales contract or whether the sale happened in the United States or abroad.
That means companies that buy used cartridges, refill them, and resell them are free to do so without facing patent lawsuits, a decision that reshapes how patent owners can use contracts and geography to control products after they sell them.
“We conclude that a patentee’s decision to sell a product exhausts all of its patent rights in that item, regardless of any restrictions the patentee purports to impose or the location of the sale.”
The Court's core holding that patent rights end once a patentee makes a sale, wherever it occurs.
How it got here: A federal trial court sided with the remanufacturer on domestic cartridges but not foreign ones; the Federal Circuit, sitting en banc, ruled for Lexmark on both, and the Supreme Court agreed to review both rulings.
The Case in Depth
What happened
Lexmark sells printer toner cartridges, some at full price and some at a discount if the buyer agrees not to reuse or resell them. Companies called remanufacturers bought up empty cartridges — including the discounted ones and cartridges Lexmark sold overseas — refilled them with toner, and resold them cheaper than new Lexmark cartridges. Lexmark sued one of these companies, Impression Products, for patent infringement over both groups of cartridges.
The question before the Court
Once a printer-cartridge maker sells its patented cartridges — whether under a resale ban at home or at any price overseas — can it still sue the buyer for patent infringement over what happens to those cartridges next?
The Court's answer
No — once Lexmark sells a toner cartridge, its patent rights over that specific cartridge are gone, whether the sale happened in the United States under a no-resale contract or overseas at any price. The Court ruled that patent exhaustion is automatic and cannot be undone by contract terms or by selling abroad; a patentee's decision to sell is what extinguishes its patent rights, not the terms it attaches or where the sale takes place.
For the domestic cartridges, Lexmark's single-use/no-resale agreement might still be enforceable as an ordinary contract, but it cannot be enforced through a patent lawsuit. For the cartridges sold abroad, the Court extended the same logic it had already applied to foreign copyright sales, holding that nothing in patent law limits exhaustion to sales made only within the United States.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
Businesses that refurbish and resell patented goods — printer cartridges, car parts, medical devices, and more — no longer have to worry about patent lawsuits once the original manufacturer has sold the item, even if the manufacturer tried to restrict resale by contract or sold the item overseas. Patent holders can still sue for breach of contract, but not for patent infringement.
What changes now
The case goes back to the Federal Circuit for further proceedings consistent with the ruling. Because both groups of cartridges are now exhausted from patent-law control, Lexmark can no longer pursue its patent infringement claims against Impression Products over either the domestic Return Program cartridges or the imported foreign-sold cartridges, though it may still have contract claims against buyers who violated the no-resale agreement.
What this does not decide
The decision does not say Lexmark's no-resale contracts are unenforceable — it only holds they cannot be enforced through patent infringement lawsuits. Lexmark may still be able to sue its direct customers for breach of contract if they violated the single-use/no-resale agreement.
Concurrences and dissents
Dissent in part — Justice Ginsburg
“A foreign sale, I would hold, does not exhaust a U. S. inventor’s U. S. patent rights.”Ginsburg's central objection to extending exhaustion to sales made outside the United States.
Justice Ginsburg agreed that Lexmark's domestic sales with resale restrictions exhausted its patent rights, but she disagreed on foreign sales. She argued that because U.S. patents provide no protection abroad and patent law (unlike copyright law) is not harmonized across countries, a sale made outside the United States should not extinguish the patentee's U.S. patent rights. She would have upheld the Federal Circuit's ruling allowing Lexmark to sue over the imported cartridges.
How the Court got there
The legal reasoning, step by step
- The Court applied the patent exhaustion doctrine, a century-old rule that once a patent holder sells a product, the product leaves the reach of patent law and becomes the buyer's own property, free of patent restrictions.
- The Court explained this rule exists because patent law is meant to let inventors get paid for their invention once, and letting patent restrictions follow a product forever would violate the long-standing legal principle against restricting the resale of property someone fully owns.
- Applying that rule to the domestic Return Program cartridges, the Court held that Lexmark's no-resale contract terms might be enforceable as a matter of contract law, but they could not revive patent rights that were already extinguished the moment Lexmark sold the cartridges.
- The Court rejected the Federal Circuit's theory that a sale only presumptively grants the buyer authority to use or resell an item, which a seller could then withhold by contract; instead, exhaustion is an automatic limit on the patentee's rights that a contract cannot get around.
- Turning to the cartridges Lexmark sold overseas, the Court reasoned that the same restraint-on-alienation logic which led it to hold, in a copyright case, that a sale abroad exhausts copyright rights applies equally to patents, since nothing in the patent statute confines exhaustion to domestic sales.
- The Court concluded that a patentee's decision to sell an item abroad is what matters, not the price it received or the location of the sale, so a foreign sale exhausts United States patent rights just as a domestic one does.
Doctrinal impact
Cases affected by this decision
Reaffirms Quanta Computer, Inc. v. LG Electronics, Inc. (553 U.S. 617)
Relied on as settling that a sale exhausts patent rights even when made subject to an express restriction.
Reaffirms Kirtsaeng v. John Wiley & Sons, Inc. (568 U.S. 519)
Its reasoning that foreign copyright sales exhaust rights was extended to hold foreign patent sales also exhaust rights.
Distinguishes Boesch v. Gräff (133 U.S. 697)
Clarified this old case only bars exhaustion when the patentee had nothing to do with the foreign sale, not all foreign sales.