Heightening Tension between the Exhaustion Doctrine and Field-of-use Licensing in Information Technology Tests the Limits of each Doctrine (Part 1).

The ingenuity of patent lawyers tests the limits of two important doctrines governing the distribution of patented goods. A recent decision of the Federal Circuit involves a complex licensing scheme with an unusual pattern that gives the scheme characteristics arguably bringing it into conflict with the exhaustion doctrine, on the one hand, but safely within the doctrine permitting licensing of limited fields of use, on the other hand. The author suggests that the Federal Circuit's reasoning in reversing a lower court s grant of summary judgment is notfaithful to Supreme Court precedent, because it imposes an erroneous standing requirement on invoking the exhaustion doctrine and uses an unduly narrow standard to determine whether what is sold and what infringes the patent are sufficiently alike to trigger the exhaustion doctrine. Part 1 of this two-part article traces the development of the US exhaustion doctrine to the present. Part 2 will address the Federal Circuit's controversial judgment in this case, which may greatly limit the application of the exhaustion doctrine by providing a way to circumvent it; and then discusses a new legal analysis to supplement the exhaustion doctrine, based on equitable estoppel. [ABSTRACT FROM AUTHOR]