Hastings Communications and Entertainment Law Journal


Daniel Erlikman


The doctrine of patent exhaustion prevents the patent owner from controlling the further destiny of the patented invention once the owner authorized the first sale or use of the product in the marketplace. In recent years, the United States Court of Appeals for the Federal Circuit advanced a modified rule of exhaustion, which permits the U.S. patent holder to contractually restrict the first purchaser's subsequent re-use or re-sale of the product. The recent Jazz Photo decision is a controversial and unjustified switch from existing U.S. jurisprudence in the field of patent exhaustion and parallel imports. By applying a territorial rule of exhaustion and limiting the doctrine of exhaustion to first sales of the product in the U.S. market, the Federal Circuit added to the existing uncertainties in the TRIPs Agreement and placed the U.S. in conflict with other countries that favor the international rule of exhaustion. This note examines the Jazz Photo decision, and its implications to TRIPs and harmonization of intellectual property protection in more detail, proposing a change to a modified rule of international exhaustion.