Beijing Law Review
2013. Vol.4, No.3, 95-99
Published Online September 2013 in SciRes (http://www.scirp.org/journal/blr) http://dx.doi.org/10.4236/blr.2013.43012
International Exhaustion, Parallel Imports, and the Conflict
between the Patent and Copyright Laws of the United States
Christop he r J. C lugston
Law College, Keim y un g Un i ve rsity, Daegu, South Korea
Received May 5th, 2013; revised June 7th, 2013; accepted July 1st, 2013
Copyright © 2013 Christopher J. Clugston. This is an open access article distributed under the Creative Com-
mons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, pro-
vided the original work is properly cited.
This article analyses the principle of international exhaustion—the doctrine that sales in a foreign country
extinguish intellectual property rights. Many developed countries have pushed the international commu-
nity not to recognize international exhaustion, and thus, to prevent parallel imports. However, the Su-
preme Court of the United States has recently held that there is exhaustion under US Copyright law for
international sales. This is an unexpected holding and it creates a conflict between copyright law and pat-
ent law on the issue of international exhaustion. This article examines the effects and possible resolution
of that conflict.
Keywords: International Exhaustion; First Sale; Patent Exhaustion; Copyright Exhaustion; Kirtsaeng;
Ninestar; Jazz Photo
Introduction
International exhaustion is a controversial issue in interna-
tional trade. It’s even more so in our increasingly globalized
world today. This controversy has become particularly heated
in the United States, where the Supreme Court and the Court of
Appeals for the Federal Circuit have given differing decisions
on the issue in the areas of copyright and patent law, respec-
tively. This article analyses the legal background, showing how
the conflict developed, and also suggests that the proper resolu-
tion of the conflict is to recognize international exhaustion in
the area of patent law to bring it in line with the other areas of
intellectual property under United States law.
The Law of Exhaustion
Intellectual property rights (IPR) are often referred to as a
bundle of exclusive rights granted to the IPR owner. In the case
of patents, those exclusive rights include the right to make, use,
offer for sale, sell and import the patented invention (Patent Act,
2012). And in the case of copyrights, those exclusive rights
include the right to reproduce, create derivative works, distrib-
ute, import, and for certain categories, the right to publicly per-
form and publicly display the work (Copyright Act, 2004).
These exclusive rights, however, are not without limitation.
Some of the rights can be extinguished by an authorized sale of
a product. This is known as exhaustion or, alternatively, the
first sale doctrine. The exhaustion doctrine was created to bal-
ance the monopoly power granted to IPR owners with the in-
terests of the public by allowing the latter to use or dispose of
lawfully acquired products as they choose, unencumbered
(Calboli, 2013). Depending on where the first sale is made,
exhaustion falls into one of two categories: national exhaustion
or international exhaustion. IPR are territorial in nature; the
rights are granted separately by each individual country and,
mostly, only have effect in that country. As discussed below,
this has led to a variety of different rules regarding exhaustion
around the world.
National Exhaustion
Under national exhaustion, certain rights are extinguished
after a domestic sale of a product covered by IPR. In order for
the sale to exhaust exclusive rights, it must be an authorized
sale by either the IPR owner or a licensee. Importantly, for a
patented product, national exhaustion only extinguishes the
right to use, offer for sale, and sell that particular product. Mak-
ing and importing are not affected by a domestic sale (Calboli,
2013). Likewise, for a copyrighted product, national exhaustion
will extinguish the distribution right for that product but will
not affect the other rights.
The rationale behind the doctrine is that the IPR owner has
received the full benefit of the IPR from the first sale. Thus, the
purchaser should receive unencumbered ownership rights in
that particular product. National exhaustion is a straight-for-
ward and uncontroversial doctrine that is nearly universally
recognized.
International Exhaustion
Conversely, international exhaustion is a far more conten-
tious doctrine because of its effect on parallel imports. Parallel
imports, or grey market goods as they are sometimes referred,
are not fake or counterfeit goods. Instead, parallel imports are
goods that are sold internationally by a patent owner (or a li-
censee) and then subsequently imported without permission.
The products are genuine: they are made by or under the au-
thority of the IPR owner. Parallel imports normally occur when

C. J. CLUGSTON
an IPR owner attempts price discrimination among different
countries or regions. In such situations, a third party that recog-
nizes the arbitrage opportunity will purchase the product in a
cheaper country for import and resale in a more expensive
country. The legality of parallel imports varies from country to
country.
In those countries that recognize the doctrine of international
exhaustion, an authorized sale in a foreign country will extin-
guish certain of the IPR owner’s rights. But whereas domestic
exhaustion extinguished the exclusive rights of use and sale for
patents, and of distribution for copyrights, the primary effect of
international exhaustion is to extinguish the exclusive right to
import for both1 (Calboli, 2013). That is, if IPR are owned in a
country that recognizes the doctrine, the IPR owner cannot
prevent the parallel importation of authorized products sold
abroad because the owner’s rights have been exhausted by the
foreign sale. Thus, an IPR owners ability to control its products
in international trade depends on if, and to what extent, the
importing country recognizes international exhaustion.2
The issue of international exhaustion is such a contentious
one in world trade that the parties to the Agreement on Trade
Related Aspects of Intellectual Property Rights (TRIPS) could
not negotiate any sort of agreement on the doctrine. In fact, the
only mention of international exhaustion in TRIPS is a state-
ment acknowledging the fact that the parties did not agree.
Article 6 of TRIPS states the following: “For purposes of dis-
pute settlement under this Agreement ... nothing in this Agree-
ment shall be used to address the issue of the exhaustion of
intellectual property rights” (TRIPS Agreement, art. 6, 1994).
As such, each nation has the authority to determine the issue of
international exhaustion. Because of this, the law of interna-
tional exhaustion is a disordered mix of different rules depend-
ing on country or region. This is particularly so in the area of
patent law.
International Patent Exhaustion by Country
Roughly, the disagreement over international patent exhaus-
tion breaks down along developed and developing country lines.
Developing countries tend to be net importers of intellectual
property. Thus, these countries tend to support international
exhaustion and parallel importation (Chiapetta, 2000). For a
developing country, intellectual property is essentially a tax on
its citizens that is being paid to the citizens of the exporting
developed countries.
These proponents of recognizing international exhaustion,
and thus allowing parallel imports, put forth a number of sup-
porting arguments related to consumer welfare. First, such
countries argue that parallel imports lower the costs for con-
sumers. Allowing imports of lower priced goods can increase
competition and force all prices lower. This can be particularly
important in developing countries, where it can help to preserve
access to medicine or other critical goods that may be covered
by IPR. Many of the developing countries did not traditionally
provide strong IPR protection for drugs but have been pres-
sured to do so by developed countries through the WTO and
TRIPs. Allowing parallel imports can be a way to help maintain
access for the poor.
Proponents also make economic arguments for recognizing
international exhaustion. By allowing parallel imports, markets
will be more efficient. If all countries allowed parallel imports,
then goods would flow freely. This would lead to a more effi-
cient allocation of resources and better prices for all consumers
in all countries. In addition, there is also a sense of economic
fairness to international exhaustion. After a first sale, the IPR
owner has received the reward for his efforts, allowing the
owner to continue to prevent importation of the product into
other markets is a sort of “double-dipping.” Instead, interna-
tional exhaustion respects traditional notions of property: once
property is sold, all control over that particular item of property
passes from seller to buyer.
Conversely, developed countries tend to be net exporters of
intellectual property, and so, generally oppose international
exhaustion and parallel importation (Chiapetta, 2000). As op-
ponents of international exhaustion, these developed countries
primarily assert two arguments. The first centers on the alleged
positive aspects of price discrimination, and somewhat ironi-
cally, also claims to be best for the consumer. The ability to
discriminate in price among different markets arguably allows a
company to set prices based on the ability of consumers to pay
in each market. Thus, in developing countries, an IPR owner
can lower the price to be more in line with incomes, and in
developed countries they can charge more. Without the protec-
tion from parallel imports offered in countries that don’t recog-
nize international exhaustion, the IPR owners would be forced
to charge uniform prices worldwide. This would harm consum-
ers in the developing world.
In addition, opponents argue that price discrimination is nec-
essary to recoup research and development costs. IPR owners
aren’t able to charge monopoly prices in some countries, as
mentioned above, because of a lack of consumer ability to pay.
In addition, some countries artificially restrict prices by regula-
tion. For example, although Canada is economically similarly
situated to the United States, drug costs there are significantly
lower because the Canadian government regulates prices. Be-
cause of the dual problem of countries where high prices are
not possible as a practical matter, and countries where they are
not possible as a legal matter, IPR owners, particularly drug
companies, argue that they would not be able to recoup enough
money to fund research and development without the ability to
engage in price discrimination.
The second argument of the international exhaustion oppo-
nents relates to quality and safety concerns. Although parallel
imports are authorized products, either made by the IPR owner
or made under its authority, the importation is not authorized.
As a result, the IPR owner cannot guarantee the quality or
safety of the product. The unauthorized importer may not have
used proper storage and handling techniques or may have even
tampered with the goods in some way. In addition, where the
imports are coming from a country with a different language,
there are possible issues with instructions and warning labels.
Interestingly, although this division of opinion between de-
veloped and developing countries on the issue generally stands,
on closer inspection, the reality is more complex. One of the
main exceptions is a country like Norway or New Zealand.
These are developed countries but they are also in favor of
recognizing international exhaustion (Monten, 2005: pp. 417-
418). These countries have a high cost-of-living and a corre-
spondingly high cost of patent covered goods. In such countries,
the benefits of increased price competition from parallel im-
ports for consumers can sometimes outweigh the benefits of
1As well as a ny use, sale or dist ribution subsequent to the importation.
2There is no exclusive right to export, so the exporting country’s law on
international exhaustion is not releva nt.
96

C. J. CLUGSTON
greater protection for the patent owners in the country (Chia-
petta, 2000).
Not all countries take an either or approach to the issue, tak-
ing an intermediate position instead. In the EU, for example,
member states recognize international exhaustion on a regional
basis. Thus, a product first sold in a member state will exhaust
the patent owner’s rights in all other member states. However,
this first sale in the EU will not exhaust rights in non-EU coun-
tries, and a first sale in a non-EU country will not exhaust rights
in any other country (Forsyth, 2007). Japan and Australia also
take an intermediate position. Japan generally recognizes inter-
national exhaustion unless the purchaser in the foreign country
has notice of the patent owner’s rights (Chiapetta, 2000). And
Australia does not recognize international exhaustion if there is
a contractual restriction related to imports (US-Australia FTA,
2004).
International Exhaustion in the United States
Although the United States has long recognized international
exhaustion in the area of trademark law, the country has tradi-
tionally been seen as one of the more staunch opponents of
international exhaustion and parallel importation in the areas of
copyright and patent law (Calboli, 2013). During the TRIPS
negotiations, the United States took the lead among developed
countries in arguing against recognition in these areas. Like-
wise, it has advanced this position in bilateral treaty agreements
and has even gone so far as to put pressure on trading partners
that have considered domestic laws that incorporate interna-
tional exhaustion (Clapperton, 2006: p. 664) However, a recent
Supreme Court case held that, in the area of copyright law,
international exhaustion is recognized under United States law.
Thus, a copyright owner cannot prevent the parallel importation
of copyrighted products first sold in a foreign country. This
case has called into question the continuing vitality of the
non-exhaustion rule under United States patent law. Despite
this, the Court of Appeals for the Federal Circuit (Federal Cir-
cuit) continues to espouse the position that there is no interna-
tional exhaustion under United States Patent Law. As discussed
below, this position is legally unsound.
Federal Circuit Case Law: Jazz Photo Corp. v.
Int’l Trade Comm3
In Jazz Photo, the defendants were accused of importing re-
furbished, single-use cameras. These cameras were made by
plaintiff Fuji, but some were first sold overseas, while others
were first sold in the United States and sent overseas to be re-
furbished. After overseas refurbishing, the cameras were then
imported into the United States for resell. The International
Trade Commission (ITC) found all cameras to be infringing,
regardless of the location of the original sale.
On appeal, the importers argued, inter alia, that there could
be no infringement because the patent owner’s rights had been
exhausted. With respect to the cameras first sold overseas, the
Federal Circuit disagreed, stating that “United States patent
rights are not exhausted by products of foreign provenance.”4 In
holding that the first sale doctrine only applies to sales that
occur in the United States, the Federal Circuit improperly relied
on the Supreme Court decision in Boesch v. Graff5 for support.
Despite the Federal Circuit’s reliance, the facts of Boesch do
not actually involve the issue of international patent exhaustion.
In Boesch, the owners of United States and German patents
covering oil lamp burners brought suit alleging that burners
purchased in and imported from Germany by defendants in-
fringed the US patents. Defendants argued that there could be
no infringement because they purchased their burners lawfully
from a third-party, one Mr. Hecht, who had a right to sell them
in Germany. Although Hecht did have the right to make and
sell the patented burners in Germany, his rights arose under a
provision of then-German law that gave a type of prior-use
rights to those “who, at the time of the patentee’s application,
have already commenced to make use of the invention in the
country…”6 Hecht was not a licensee of or otherwise connected
to the patent owners. Because he had no connection to the pat-
ent owners, a purchase from him cannot be considered a first
sale that exhausts the owners’ rights. The rationale behind the
exhaustion doctrine, whether domestic or international, is that
the patent owner has received the benefit of the patent from the
first sale. A sale by an unrelated third party, such as Hecht, thus
does not involve the exhaustion issue at all.
Since the Jazz Photo decision, the Federal Circuit had been
somewhat inconsistent in its rulings on international exhaustion.
In one line of cases, the Court relied on Jazz Photo to deny
recognition of international exhaustion7 while in another, it
twice applied international exhaustion to imported goods
manufactured and first sold abroad.8 Any doubt about the Fed-
eral Circuits position on the issue, however, was resolved
against international exhaustion in its Ninestar decision.9 The
facts of Ninestar are similar to Jazz Photo, in that both involved
the import of refurbished products.10 In Ninestar, the court
reiterated its support for the wrongly decided Jazz Photo line of
cases, holding that a foreign first sale cannot exhaust domestic
rights. However, the Supreme Court has further called this line
of cases into questions with its recent international copyright
exhaustion decision.
Supreme Court Case Law: Kirtsaeng v. John Wiley
& Sons, Inc.11
The Kirtsaeng decision finally resolved a long going battle
over the legality of parallel imports under United States Copy-
6Id. at 701.
7See Fuji Photo Film Co. v. Int’l Trade Comm,. 386 F.3d 1095
(Fed.Cir.2004); Fuji Photo Film Co. v. Jazz Photo Corp., 394 F.3d 1368
(Fed.Cir.2005); Fuji Photo
F
ilm Co., Ltd. v. International Trade Comm.,
474 F.3d 1281 (Fed. Cir. 2007); Fujifilm Corp. v. Benun, 605 F.3d 1366
(Fed. Cir. 2010).
8See Powertech T ech. Inc. v. Tessera, Inc. 646 F.3d 1357 (Fed. Cir. 2011).;
Tessera, Inc. v. Int’l Trade Comm’n 646 F.3d 135 7 (Fed. Cir. 2011).
9Ninestar Tech. Co. Ltd. v. Int’l Trade Comm., 667 F.3d 1373 (Fed. Cir.
2012).
10In Ninestar, the defendant refilled and imported used ink cartridges that
were first sold abroad by plaintiff Epson. Ninestar appealed a finding o
f
infringement by the ITC, arguing to the Federal Circuit that Epson’s patent
rights had been exhausted by the foreign sale. Ninestar suggested the
J
azz
P
hoto line of cases had been overruled by the intervening Supreme Court
decision in Quanta Computer, Inc. v. LG Elecs., Inc., 553 U.S. 617 (2008).
The Quanta case specifically involved the issue of domestic, not interna-
tional, exhaustion. However, the Court did suggest support for recognizing
international exhaustion in a note to the main decision. Further, when the
case was returned to the lower court for a decision on the international ex-
haustion issue, that court held that, under the Quanta decision, international
exhaustion did extinguish patent rights. The Federal Circuit denied relief,
stating that Quanta was legally and factually distinguishable. The Supreme
Court dealt only with the issue of domestic exhaustion so Quantawas,
according to the Federal Circuit, irrelevant to the issue of international
exhaustion.
112013 USLEXIS 2371 (2013).
3264 F.3d 1 094 (Fed. Cir. 2001).
4Id. at 1105.
5133 U.S. 697 (1890).

C. J. CLUGSTON
right law. Prior to the decision, a split of authority had devel-
oped on the issue—the Second Circuit held that international
exhaustion does not apply to copies manufactured outside of
the United States,12 the Ninth Circuit held that international
exhaustion does apply to copies manufactured outside of the
United States, but only if first sold in the United States,13 and
the Third Circuit stated that a limitation of the first sale doctrine
to only those copies made within the United States “does not fit
comfortably within the scheme of the Copyright Act.”14
In Kirtsaeng, the accused infringer was a Thai citizen at-
tending graduate school in the United States. Kirtsaeng noticed
that there was a significant discrepancy between the prices of
textbooks in Thailand and in the United States and he took
advantage of this by asking his friends and family in Thailand
to purchase copies of these cheaper foreign versions and mail
them to him. Kirtsaeng would then sell the textbooks online,
reimburse his friends and family for the purchase and shipping
costs, and keep the profit for himself.
Among the books imported and sold by Kirtsaeng were many
that were made and first sold abroad by John Wiley & Sons
(Asia) Pte Ltd. These foreign textbooks generally contained
language stating that the book could only be sold in a particular
country and could not be imported into the United States.15
When Wiley brought suit for violation of its rights of importa-
tion and distribution, Kirtsaeng argued that these rights had
been exhausted by the first sale in Thailand. The trial and ap-
pellate courts both found infringement, with the appellate court
stating that the first sale doctrine only applies to copies “made
in territories in which the Copyright Act is law.”16
The Supreme Court reversed the lower court decisions, and
made it clear that international exhaustion is recognized, stating
as follows:
In our view, §109(a)’s language, its context, and the com-
mon-law history of the “first sale” doctrine, taken together,
favor a non-geographical interpretation. We also doubt that
Congress would have intended to create the practical copy-
right-related harms with which a geographical interpretation
would threaten ordinary scholarly, artistic, commercial, and
consumer activities.17
In doing so, the Court resolved one legal issue but created
another. The split of authority under United States Copyright
Law is now settled. However, this has caused a conflict be-
tween copyright law and patent law on the treatment of interna-
tional exhaustion.
Conclusion
Because of this conflict, I believe that the Federal Circuit’s
continued opposition to international exhaustion in patent law
is untenable. The Jazz Photo line of cases improperly relies on
Boesch as precedent and is, thus, legally unsound. As discussed,
the Boesch case does not involve a first sale by or under the
authority of the patent owner. Such a sale can have no effect
whatsoever on the importation rights of the patentee. Patent
exhaustion only applies when the patent owner obtained some
benefit, either directly or indirectly, from the first sale. A sale
by an unrelated third-party with only prior user rights confers
no benefit on the patent owner and extinguishes no right.
Without sound precedent, then, the various rationale for recog-
nizing international copyright exhaustion will have implications
for whether to recognize international patent exhaustion.
Patent and copyright laws have much in common. Thus, they
frequently borrow legal concepts from one another and, more
importantly, they both have the same policy objectives. Unlike
other areas of IPR, the protection of both patent and copyright
are grounded in the Intellectual Property Clause of the Consti-
tution, which grants authority “to promote the Progress of Sci-
ence and the Useful Arts by securing for limited Times to Au-
thors and Inventors the exclusive Right to their Writings and
Discoveries.” (US Const, art. I, § 8, cl. 8). This clause encapsu-
lates the bargain theory of IPR. That is, the balance between the
rights of the inventor to exploit his invention or work, and the
rights of the public to have access to and use of the knowledge
embodied in the invention or work. Under the bargain theory,
the purpose of intellectual property is to incentivize the creation
of more and better things, but to do so for the ultimate benefit
of the public. Because of these similarities between the two
areas of the law, it can be instructive to analyze international
patent law exhaustion using the reasoning of the Court in Kirt-
saeng.
Implications of Kirtsaeng on International Patent
Exhaustion
Although a large part of the Court’s decision dealt with the
proper interpretation of the exhaustion clause of the Copyright
Act, it also relied on three rationales that were important to the
patent exhaustion issue. First, the Court focused on the com-
mon law history of the first sale doctrine. The Court pointed out
that the general doctrine of first sale had “an impeccable his-
toric pedigree.”18 Citing a 17th century treatise by Lord Coke
for support, the Court explained how any law that would allow
a seller of a chattel to control its resale or other disposition
would be “against Trade and Traffi[c], and bargaining and con-
tracting.”19 Consumers benefit when buyers are free to dispose
of their lawfully acquired goods without restriction. This bene-
fit is achieved through increased competition among buyers
when they resell these goods and requires that there be no on-
going encumbrances. Further, another rationale underlying the
common law doctrine was that it would decrease the burden on
the judicial system. Downstream restrictions on goods are dif-
ficult to trace and to enforce. As a result, such restrictions are
often selectively enforced. Importantly, the Court noted, the
historical common law first sale doctrine made no geographic
distinctions so there was a presumption that the modern statu-
tory doctrine also made no such distinction.
This historical argument from the common law is even
stronger for patent law than it is for copyright law. The Copy-
right Act contains a cla use specific ally de aling with t he issue of
exhaustion by first sale. Thus, in analyzing the international
exhaustion under copyright law, opponents of recognition at
least have the argument that the relevant statutory clause repre-
12Kirtsaeng v. John Wiley & Sons, Inc., 654 F.3d 210, 213 (CA2 2011).
13Omega S. A. v. Costco Wholesale Corp., 541 F.3d 982, 986 (CA9 2008).
14Sebastian Int’l, Inc. v. Consumer Contacts (PTY) Ltd., 847 F.2d 1093,
1098 (CA3 1 988).
15Kirtsaeng, at 13 (2013) (the Asian edition of these books said, in relevant
part, that the “book is authorized for sale in Europe, Asia, Africa, and the
Middle East only and may be not exported … Exportation from or importa-
tion of this book to another region without the Publisher’s authorization is
illegal and is a violation of the Publisher’s rights.” ) .
16Id. at 17.
17Id. at 19.
18Id.
19Id. at19, citing Coke, E. Institutes of the Laws of England §360, p.
223 (1628).
98

C. J. CLUGSTON
sented a departure from historical precedent. However, the
Patent Act contains no such clause. Instead, the issue of inter-
national patent exhaustion is decided purely by court decision.
From the time of Lord Coke’s treatise, the common law has
strongly favored recognition of the general doctrine of exhaus-
tion. Thus, without a strong and unambiguous precedent on
which to rely, the Federal Circuit’s arbitrary decision to only
recognize exhaustion domestically is not on sound legal foot-
ing.
Second, the court looked at possible harms that would result
from not recognizing international exhaustion. Many common
consumer goods, such as “automobiles, microwaves, calcula-
tors, mobile phones, tablets, and personal computers” contain
copyrighted components, often in the form of software.20 If a
first foreign sale did not exhaust these rights, the purchaser
would not be able to resell his product in the United States.
Instead, permission would be required from the owners of any
and all copyrights contained in the product. This would place
an unworkable burden on trade in such goods.
The Court’s concern over these negative effects on interna-
tional trade applies equally well in the area of patent law. The
concern of the Court specifically was over software included in
these consumer products that might be protected by copyright.
However, this same concern is raised by patent protection be-
cause software can be patented in the United States. As such,
the same software could interfere with the free trade of these
same goods in the same way if international exhaustion is not
recognized in the area of patent law. In other words, the respec-
tive decisions of the Supreme Court in Kirtsaeng and of the
Federal Circuit in the Jazz Photo line of cases have created a
scenario where the exact harms the Court is trying to prevent in
its decision are being enabled by the Federal Circuit in its con-
trary decision. Such an absurd result runs counter to legal rea-
soning.
Finally, in responding to the argument that recognizing in-
ternational exhaustion would make it difficult to price discrimi-
nate, the Court analyzed the Intellectual Property Clause of the
Constitution. Wiley argued that it would be difficult, if not
impossible, for a copyright owner to charge different prices in
different markets without the ability to prevent parallel imports
from those markets where the product was sold at a lower price.
The Court responded by pointing out that the Constitution did
not suggest that a right to divide markets and price discriminate
exists. Because price discrimination is not one of the bundle of
rights protected by a copyright, it is of no legal importance
whether recognizing internal exhaustion will frustrate a copy-
right owners ability to do so.
The Court’s discussion of the Intellectual Property Clause of
the Constitution is also on point when considering international
patent exhaustion. There is no right to or guarantee of the abil-
ity to discriminate on price inherent in the patent laws. Thus,
any argument against international exhaustion or parallel im-
ports must rely on other grounds. However, such other grounds,
as discussed abo v e , are also questionable.
Because of the contrary holding in Kirtsaeng, the issue of
international exhaustion in patent law needs to be addressed. At
its first opportunity, the Federal Circuit should order en banc
review of this issue. The current position of the court is not
supported by precedent and is at odds with the Supreme Court
in the related area of international copyright exhaustion. In
addition, the rationale justifying the Court’s decision on copy-
right exhaustion apply equally, or even moreso, to the issue of
patent exhaustion. As such, the Federal Circuit’s position is
wrong on both the law and the policy and needs to be addressed.
Acknowledgements
The present research was funded by a BISA Research Grant
of Keimyung University.
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