Exhaustion in the Service of Progress
[Ofer Tur-Sinai] This Article examines the immensely valuable but underexplored role that the exhaustion doctrine could play in the context of cumulative innovation. Research and development efforts often involve the need to use earlier patented inventions. Unfortunately, licensing transactions between cumulative inventors are characterized by particularly high transaction costs and other factors that may impede the ability of the parties to reach an agreement. As a result, the patent system may end up stifling technological progress rather than promoting it. This Article demonstrates that this concern may be mitigated by the Lexmark decision. The patent exhaustion doctrine, as construed by the Supreme Court, could constitute an effective policy tool for facilitating cumulative innovation in a variety of settings.
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