The United States Supreme Court recently decide a patent case that has a significant impact on small aftermarket businesses. In Impression Products, Inc. v. Lexmark International, Inc. the Supreme Court determined that Impression Products, Inc.’s acquisition of
used printer cartridges that it refilled and resold did not violate Lexmark International, Inc.’s patents in the printer cartridges. The Supreme Court held a patentee’s decision to sell a product exhausted all of its patent rights in that item, regardless of any restrictions in the patentee’s contracts with its customers. Thus, Impression Products, Inc. did not violate Lexmark’s patent by refilling and reselling Lexmark’s printer cartridges.

The opinion has far-reaching consequences. The Pharmaceutical Research and Manufacturers of America, a trade group whose members include Pfizer Inc and Eli Lilly and Co. PhRMA had urged the Court to rule that drugs are still covered by U.S. patents after a sale abroad, arguing that resellers will buy their drugs in poor countries, where they are sold at a discount, and then re-import them into the United States. The Supreme Court’s opinion rejected PhRMA’s position. Consequently, the reimportation of discounted drugs does not violate the pharmaceutical manufacturer’s patent rights. The opinion enables entrepreneurs to compete in secondary markets and provide consumers with quality goods and services at lower prices.

If you are repackaging someone else’s products you may have gained a victory with this U.S. Supreme Court ruling. However, we strongly recommend that you seek legal counsel before you do so. Patent issues are only one potential source of liability for such businesses. There are many more that should be explored with a qualified attorney before engaging in such a business endeavor.

The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.