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ARTICLE · 29 NOVEMBER 2013

Exhausting Patent Rights Without A Sale

Addressing for the first time the issue of whether patent exhaustion applies to products distributed for free, a divided panel of the U.S. Court of Appeals for the Federal Circuit held that "patent exhaustion principles apply equally to all authorized transfers of title in property, regardless of whether the particular transfer at issue constituted a gift or a sale."

United StatesIntellectual Property

LifeScan Scotland, Ltd. v. Shasta Technologies, LLC

Addressing for the first time the issue of whether patent exhaustion applies to products distributed for free, a divided panel of the U.S. Court of Appeals for the Federal Circuit held that "patent exhaustion principles apply equally to all authorized transfers of title in property, regardless of whether the particular transfer at issue constituted a gift or a sale."  LifeScan Scotland, Ltd. v. Shasta Technologies, LLC, Case No. No. 13-1271 (Fed. Cir., Nov. 4, 2013) (Dyk, J.) (Reyna, J., dissenting).

LifeScan manufactures meters for use with disposable test strips that allow individuals with diabetes to test their blood glucose levels.  LifeScan sold some of its meters, but gave away the majority of its meters for free, "in the expectation and intent that diabetic individuals will use the meters with its test strips."  LifeScan owns a patent directed to an improved method of measuring blood glucose by comparing

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