This Article argues that the current exhaustion doctrine, when applied to the refurbishing industry, fails to balance its mandate of promoting technological progress with the broader program of sustainable development and is therefore unsuitable for countries on the modernization path. First, what constitutes an infringing “making” remains underdetermined. Second, the evidentiary hurdle for proving legal refurbishment is too onerous for the low margin and under-resourced refurbishing industry. Finally, the all-or-nothing approach to judging infringement fails to account for the nuanced cost-benefit nexus that exists between patentees, refurbishers, and society at large and discourages private ordering. To recalibrate the balance between technological progress and sustainable development, this Article proposes several alternatives to the predominant exhaustion doctrine that are better aligned with the goals of sustainable development.
The argument is organized as follows: Section I identifies several ways the refurbishing industry promotes sustainability and economic development. Section II outlines three aspects of the exhaustion jurisprudence affecting global refurbishment trade: the repair-reconstruction doctrine, the territorial reach of exhaustion, and the enforceability of single-use restrictions. Relevant examples are drawn from the United States, Japan, Europe, and China, which together showcase the range of analytical approaches courts have applied to the refurbishment infringement disputes that are often at odds with the needs of commercial refurbishers. Section III explores the tension between the refurbishing business and the underlying patent policy. Unfortunately for refurbishers, the policy justification for permissible repair applies poorly to them. Section IV details the fallout of this tension, leading to a suboptimal level of refurbishment even where it is legitimate. The last section proposes several alternative exhaustion doctrines developing countries may explore to reconcile patent law with commercial refurbishment.
Benjamin Liu, Toward a Patent Exhaustion Regime for Sustainable Development, 32 Berkeley J. Int'l Law. 330 (2014)