Federal Circuit Restricts Patent Exhaustion Doctrine

In Helferich Patent Licensing v. NYTimes and JCPenney, the Federal Circuit restricted the scope of the patent exhaustion doctrine by holding that the doctrine only protects “authorized acquirers” of a device against patent infringement claims instead of putting the device itself outside the scope of patent protection. In Helferich, the Helferich company owned patents on both methods of providing content to cellular phones (“content claims”) and methods of using those cellular phones (“handset claims”). Helferich authorized cell phone companies to sell handsets that practiced the handset claims of its patents, but went after certain other companies for providing content in a way that infringed the content claims of those same patents. These other companies, including the New York Times and several others, unsuccessfully argued that all claims of the patents had been exhausted with respect to the particular devices they provided content to, and were held liable for infringement.

This decision reinforces the value of drafting a wide variety of claims to cover your invention. If the patent may be infringed by third-party use, such as providing content to a device someone else owns, you may be able to seek a license from those infringers. However, it may also make patent exhaustion less simple and predictable, making it somewhat more dangerous to provide third-party content.