Patent-Exhaustion Doctrine Law and Legal Definition

According to the Patent exhaustion doctrine sale of a patented article without any conditions attached ends the patentee's monopoly right to control its use. First unrestricted sale of a patented item exhausts the patentee's control over that particular item. However the control may be exercised by limitations in a contract or license provided it does not amount to anticompetitive patent misuse.

The right to manufacture, the right to sell, and the right to use are each substantive rights, and may be granted or conferred separately by the patentee. But, in the essential nature of things, when the patentee, or the person having his rights, sells a machine or instrument whose sole value is in its use, he receives the consideration for its use and he parts with the right to restrict that use. The article passes without the limit of the monopoly. That is to say, the patentee or his assignee having in the act of sale received all the royalty or consideration which he claims for the use of his invention in that particular machine or instrument, it is open to the use of the purchaser without further restriction on account of the monopoly of the patentees. [Adams v. Burke, 84 U.S. 453 (U.S. 1873)]