The Misinterpretation of the Patent Exhaustion Doctrine and the Transgenic Seed Industry in Light of Quanta v. LG Electronics

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Volume 10, Issue 1 (Jun 2012)

The Supreme Court’s recent interpretation of the patent exhaustion doctrine mandates that the transgenic seed industry use contract law instead of patent law to enforce post-sale restrictions. Prior to Quanta Computer, Inc. v. LG Electronics, Inc., the federal district courts and the Federal Circuit held that patent exhaustion was not triggered if a sale was restricted and that post-sale restrictions are enforceable under federal patent law. In Quanta, the Court held that all authorized sales trigger patent exhaustion regardless of restrictions and that post-sale restrictions are not enforceable under patent law. Although Quanta is a case about computer components, the Court’s decision affects the transgenic seed industry. Both the computer industry and the transgenic seed industry relied heavily upon the same pre-Quanta federal case law for interpretation of the patent exhaustion doctrine. This broad holding removes uniform federal remedies under patent law for violating post-sale restrictions, and the seed industry must now rely on a patchwork of state contract law to enforce post-sale restrictions.

Tod Leaven, Recent Development, The Misinterpretation of the Patent Exhaustion Doctrine and the Transgenic Seed Industry in Light of Quanta v. LG Electronics, 10 N.C. J.L. & Tech. 119 (2009), available at http://ncjolt.org/wp-content/uploads/2016/09/05_10NCJLTech1192008-2009.pdf.

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