If the right to impose such restrictions were to be upheld, the manufacturer of a patented product might include restrictive language in its sales documents not only to prevent certain uses of the product, but also to limit or deny the right of all subsequent owners of the product to resell, repair or refurbish that product. The court case, which was between a farmer and an agricultural company, Monsanto, arose out of sales of soybean seeds to farmers. The Monsanto altered seeds were sold subject to a technology agreement which prohibited the replanting of second generation seeds. When the farmer, a Mr Vernon Bowman, planted a second generation, Monsanto claimed that he had violated their patent rights in the genetic material in those seeds, regardless of the fact that he had not signed the technology agreement. The legal issue is whether patent rights terminate at the time of sale of a product or whether a patent holder can impose post-sale restrictions on the purchaser and subsequent users of that product. Since early in the 20th century US patent law has held that a patent holders rights are exhausted at the time of the first sale of the product. After that the purchaser and others are free to use, resell or repair the item in any way they wish. In 2008, the Supreme Court upheld this exhaustion doctrine and specifically denied that post-sale restrictions constitute an exception to the application of the exhaustion doctrine. (That case involved post sale restrictions on the use of computers. APRA also filed an amicus brief in that case (Quanta Computers, Inc v. LG Electronics, Inc.) opposing the validity of post-sale restrictions.) In the present case the Federal Circuit Court of Appeals ignored the earlier case and upheld the right of a patent holder to impose post sale restrictions on all subsequent users. For further details, please go to the external weblink.

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