Limitations of The Exhaustion Doctrine
The exhaustion doctrine is triggered only by a sale authorized by the patent holder. Thus, there are circumstances where it is difficult to determine whether the exhaustion doctrine is triggered, in light of the restrictions that the patentee has placed on the sale or use of the patented invention. Two general questions arise in these situations: (1) Was the sale authorized by the patentee? This can often be a complex factual question. (2) Even if not authorized by the patentee, are those restrictions valid and recognizable under the law?
Generally, these cases involve one or more of the following scenarios: the patent owner: (1) sells one or more components of a multi-component patented good; (2) licenses another to sell with certain restrictions on the sale itself; or (3) sells the article with restrictions directly on the purchasers or end-users (post-sale restraint).
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