The patent exhaustion doctrine generally provides that when a patent holder sells or authorizes the sale of a patented product, the patent rights in that item are exhausted. The patent holder cannot chase the item down the stream of commerce to impose restrictions on its use or resale. One issue that arises is whether a domestic sale is required to trigger patent exhaustion, or if sales overseas can also trigger patent exhaustion. The Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS”) is agnostic on this question, providing that “nothing in this Agreement shall be used to address the issue of the exhaustion of intellectual property rights.” As a result, some countries have adopted a “national exhaustion” regime, where only a domestic sale triggers exhaustion, but other countries have adopted an “international exhaustion” regime, where sales in foreign countries trigger exhaustion. The European Union (“E.U.”) opted for a regime of “regional exhaustion,” whereby the authorized sale of a patented product in any E.U. country exhausts patent rights throughout the E.U., but patent rights in the item survive to prevent resale outside of the E.U.
51 Univ. Pacific L. Rev. 475 (2020).