For the first time, the High Court adopted the doctrine of “patent exhaustion” to determine the nature and extent of monopoly rights of patent owners and departed from the “implied licence” theory, which had been used in Australia for more than a 100 years. Calidad Pty Ltd, distributor of refurbished printer cartridges, won a long-standing battle with Seiko Epson Corporation in its final appeal to the High Court. This decision has significant implications for both patent owners and businesses operating in industries in connection with the repair, refurbishment and recycling of goods and possibly, parallel importers.
The “patent exhaustion” theory simply means that the rights of a patent owner, in relation to the patented products, “exhaust” (i.e. are complete extinguished) at the point of sale. In other words, the sale takes the patented product outside the scope of the patentee's rights. The purchaser of the patented product may therefore deal with the product at his or her
