Content of Criteria
- A patentee may be limited in exercising his/her patent right due to exhaustion of the right for only unmodified patented product which was sold or otherwise transferred by the patentee in or outside our country.
- If a product that is not similar to the patented product sold by the patentee in or outside our country is found to have been newly-manufactured by replacing or modifying the parts of the patented product, the patentee may exercise his/her right over that product.
- To determine whether the patented product was newly-manufactured, the following must be considered: (1) the attributes of the subject patented product (functions, construction and materials, purpose, life span, embodiments), (2) the content of the patented invention, (3) the embodiments of modifying and replacing parts of the product (the condition of the subject patented product at the time of modification, the content and level of modification, life span of the replaced parts, technical function and economic value of such parts in the patented product), and (4) actual condition of the trade.
The Supreme Court Decision
The appellant not only refilled the cartridge with ink, but reused the ink tank, which reproduced the main constituent features of subject patented product. The appellant re-created the substantial value of the subject product by reproducing the characteristic effect that prevents the leakage of ink. When we consider the actual condition of the trade and other factors, it is fair to determine that the appellant newly-manufactured a product, which is not similar to the product covered by the patent before the modification.
The decision put an end to the debate over the exhaustion of the patent right for the time being. However, the criteria for determining whether the product was newly-manufactured are complicated and still unclear. We anticipate that there will be many rulings in lower courts that rely on the above criteria.
