Although the doctrine of patent exhaustion is well-recognized, various wrinkles in applying the doctrine remain undecided. A recent decision by the Federal Circuit provided further guidance regarding the application of patent exhaustion to patent method claims, specifically answering two questions: 1. If a product is given away and the patent owner did not receive any compensation, did the distribution of that product exhaust the patent claim? 2. In a patent claim covering a method of using a combination of items, does the authorized distribution of one of those items exhaust the method claim?
The doctrine of patent exhaustion has often been described as holding that the sale of a patented device exhausts the patent owner’s right to exclude and infringement cannot be found based on the subsequent sale or use of the device. It is well-settled that the doctrine applies to method claims where the product sold substantially embodies the patented invention.