Friday, February 22, 2008

Patent exhaustion?

Dear Rich: I have a question. Yesterday there was a story in the news about the Supreme Court and 'patent exhaustion.' What is patent exhaustion? Patent exhaustion is a legal doctrine that basically says that once a patent owner sells a product, the patent owner cannot seek further patent payments for that particular product. So, for example, if you buy a patented lawn mower, the patent owner cannot demand further royalties if you resell the mower or if you make your living mowing lawns. The principle is also known as the "first sale doctrine," a term that also applies in copyright law for a similiar principle. For example, if you buy a copyrighted item such as book or DVD, you are free to resell it without paying the copyright owner. Wait, does that rule apply for copyrighted software? Hmm... that depends on where you live. In some states, courts have held that software isn't sold; it's licensed and can only be 'resold' under the terms of an end-user license agreement. But is software protected under copyright or patent law? Actually, it can be protected under both.