What Happened
Lexmark sold toner cartridges for printers with a restriction: single use only. When a company called Impression Products refilled and resold those cartridges, Lexmark sued for patent infringement. The Supreme Court said no—once Lexmark sold those cartridges, their patent rights were "exhausted." They got paid; they can't control what happens next.
Why It Matters
This is the "first sale doctrine" for patents. When a patent owner sells a product, they get compensated for that product. They can't then use patent rights to control how it's used, resold, or repaired. This is why you can sell your used iPhone without Apple's permission, and why repair shops can fix patented devices.
The Lexmark decision went further than many expected. The Court said two things: First, post-sale restrictions don't work through patent law—they might be contract violations, but they're not infringement. Second, sales abroad also exhaust U.S. patent rights. So if a patent owner sells products in another country, those products can be imported and resold in the U.S. without infringement.
What You Should Know
If you're a patent owner, understand that sales exhaust your rights. If you want to maintain control, consider licensing instead of selling—but courts scrutinize whether a transaction is truly a license or just a sale with strings attached.
If you're in the business of refurbishing, reselling, or repairing products, exhaustion is your friend. Just make sure the products you're handling were legitimately sold by the patent owner.
The bottom line: patent rights end where sales begin. That's good for competition and consumers, even if it's frustrating for patent owners.