Patent Exhaustion Law and Legal Definition

Patent exhaustion refers to termination of a patent owner’s rights to control the use of patented product or a process used for making that product. Patent exhaustion occurs when a patented product is for sale without any conditions. The owner of a patent has no further rights in the particular product that is sold. The new owner can sell, destroy, or dispose of that product as s/he would use any other property that s/he owned. Patent exhaustion is a defense for claims such as a patent infringement claim, prohibiting a party from suing for patent infringement to protect his/her proprietary rights since the party is deemed to have already received full compensation for ownership in such rights.[ Jazz Photo Corp. v. ITC, 264 F.3d 1094 (Fed. Cir. 2001)]

The following is an example of a case law defining patent exhaustion:

Patent exhaustion refers to unrestricted sale of a patented article, by or with the authority of the patentee, 'exhausts' the patentee's right to control further sale and use of that article by enforcing the patent under which it was first sold.[ExcelStor Tech., Inc. v. Papst Licensing GmbH & Co. KG, 2007 U.S. Dist. LEXIS 79305 (N.D. Ill. Oct. 24, 2007)]