Apr. 29th: Brief Summary (2007 WL 3440937) - Andrew McBride

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This is:

Brief Amici Curiae of Consumers Union (CU), Electronic Frontier Foundation (EFF), and Public Knowledge in Support of the Petitioner

Argument summary

Patent exhaustion doctrine-Supreme Court precedent indicates that when a consumer purchases a patented product, that consumer owns it outright, and the patent owner loses their rights under patent law to restrict the use, repair or resale of that product.

A 1992 Federal Court decision broke the above precedent and decided that patent exhaustion doctrine only grants an 'implied license' to the consumer, and since that ruling many patented products have been sold with the threat to restrict resale, despite contrary rulings by the Supreme Court.

The above Federal Circuit decision has 'impermissibly and unwisely expanded patent scope by judicial fiat'. As patent owners further exploit this decision, imposing more and more restrictions on consumers, consumers will increasingly suffer several harms:

  • Increased information costs when trying to ascertain restrictions on patented goods;
  • Erosion of the well-established right to repair patented goods;
  • Interference with the functioning of vibrant secondary markets (such as eBay and Craigslist) enabled by new technologies;
  • Diminished opportunities for “user innovation”; and
  • Expanded use of inefficient and unfair price discrimination in connection with patented goods.

There are no policy advantages to justify the above harms to consumers and the economy as a whole. Returning to the Supreme Court precedent on patent exhaustion will only force patent holders to rely upon contract law instead of patent law when imposing restrictions on purchased products. For the consumers, contract law will be better equipped to address concerns arising when such restrictions are imposed on patented products.