The Future of “Single Use Restrictions” in Jeopardy

In 1992, the United States Court of Appeals for the Federal Circuit held that manufacturers of patented medical devices can use the patent laws to enforce single-use restrictions on medical devices.  Mallinckrodt, Inc. v. Medipart, Inc., 976 F.2d 700 (Fed. Cir. 1992).  The basic rationale of the decision was that a patent owner, when selling a patented product, may choose to part with all or only some of its patent rights associated with that product.  If the patent owner chooses not to sell to the purchaser the right to re-use the patented product after its initial use, then that right remains with the patent owner.  Accordingly, if the purchaser, or even a downstream purchaser, re-uses the patented product, it is exercising a right that was not granted by the patent owner, and the patent owner may, in some circumstances, sue for infringement.

In the 25 years since the Federal Circuit decided Mallinckrodt, medical device manufacturers have relied on the patent laws to enforce single-use restrictions.  However, medical device manufacturers may be unable to rely on Mallinckrodt for much longer.  The Supreme Court recently agreed to consider a case, Lexmark International, Inc. v. Impression Products, Inc., which may have implications on the availability of using the patent laws to enforce single-use restrictions.

In Lexmark International, Inc. v. Impression Products, Inc., 816 F.3d 721 (Fed. Cir. 2016) (en banc), Lexmark alleged that Impression Products infringed Lexmark’s patent by selling refilled printer cartridges, which were originally sold by Lexmark to a purchaser and subject to a single-use/no-resale restriction.  A panel of 12 judges, representing the full United States Court of Appeals for the Federal Circuit, determined that a third-party who did not take part in the original conditional sale of the patented item may be held liable for infringing the patent covering the item for failing to abide by the single-use restrictions contained in the original sales agreement.

On December 2, 2016, the Supreme Court agreed to hear the appeal from the Federal Circuit.  Before hearing arguments from the parties involved, the Supreme Court allows non-litigants to submit amicus curiae (friends of the Court) briefs.  These briefs provide additional information to the Court to help it better understand the potential implications of the Court’s decision.  Reflecting the magnitude of the Supreme Court’s forthcoming decision, at least thirty-four amicus curiae briefs were filed.  Fourteen briefs were filed in full or partial support of the petitioner, Impression Products, Inc., by amicus curiae  such as: Huawei Technologies Co., Ltd.; Costco Wholesale Corporation, et al.; Intel Corp., Dell Inc., and Vizio Inc.; Association of Medical Device Reprocessors; and HTC Corporation and HTC America, Inc.  Sixteen briefs were filed in full or partial support of the respondent, Lexmark International, Inc. by amicus curiae such as: Intellectual Property Owners Association; Medtronic PLC, and Zimmer Biomet Holdings, Inc.; Qualcomm Incorporated; Pharmaceutical Research and Manufacturers of America; Dolby Laboratories, Inc.; and Nokia Technologies Oy, and Nokia USA Inc.  Copies of all amicus curiae briefs may be found here.

Due to the possibility that the Supreme Court’s decision may affect the ability of medical device manufacturers to sell patented devices subject to single-use restrictions, Knobbe Martens filed an amicus curiae brief on behalf of the Medical Device Manufacturers Association, advocating affirmance of the Federal Circuit’s Lexmark decision and retention of the legal principle announced in Mallinckrodt.  The Medical Device Manufacturers Association, in its brief, explained that single-use restrictions are consistent with existing patent laws, which permit patent owners to restrict the patent rights conveyed with the sale of a patented product, as long as the restriction does not impermissibly broaden the scope of the patent owner’s rights in violation of the antitrust laws or principles of patent misuse.  The Medical Device Manufacturers Association further explained that single-use restrictions on medical devices are designed to maximize public safety by preventing imperfectly refurbished medical devices from entering the market.

Oral argument for Lexmark International, Inc. v. Impression Products, Inc. occurred on March 21, 2017.  A transcript of the proceedings may be found here.

Ashley Morales
Ashley Morales focuses on Litigation for the biotech, chemical, and pharmaceutical fields. Ashley is experienced in due diligence and opinion work in the biotech, chemical, and pharmaceutical fields, and assists in patent prosecution in the chemical and pharmaceutical fields. She represents clients in several industries including pharmaceuticals, cosmetics and healthcare. Ashley received her law degree from Columbia Law School where she was Executive Editor for the Columbia Journal of Environmental Law. She received her bachelor's degree in chemistry and political science from the University of Southern California.
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Paul Stewart
Paul Stewart is a partner in our Orange County office. Mr. Stewart represents clients in all types of intellectual property disputes, including those involving patents, trademarks, trade secrets, and related unfair competition claims. He has represented clients in district courts throughout the country and before the United States Courts of Appeals for the Federal Circuit and the Ninth Circuit. Mr. Stewart's cases have involved a vast array of technologies and products, including medical devices, semiconductor processing, computer systems, computer software, and construction equipment. He has also represented many clients in non-technical disputes relating to trademarks, trade dress, and copyrights. Mr. Stewart joined the firm in 1991 and became a partner in 1996.
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