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Patents Exhaustion For The Exhausted Defendant: Should Parties Be Able To Contract Around Exhaustion In Settling Patent Litigation?, Samuel F. Ernst
The first sale doctrine provides that when a patent holder unconditionally authorizes another party to sell a patented item, the patent holder's right to exclude with respect to the patented item is "exhausted. " The licensee can then sell the patented item to a third party - a downstream purchaser - and the patent holder will not be able to sue the third party for patent infringement based on the resale or other use of that item. A principal animating policy behind the exhaustion doctrine is to prevent patent holders from receiving overcompensation for their patented inventions by, for example, aggregating royalties ...