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The Supreme Court, the Lexmark case and implications for the health care industry

By Dan Vukelich
From the August 2017 issue of DOTmed HealthCare Business News magazine

Patent exhaustion, secondary markets, right to repair.

These elements were at play in the recent U.S. Supreme Court ruling in Impression Products vs. Lexmark. At stake was the right of the plaintiff, Impression Products, to resell Lexmark printer cartridges. But as many media outlets have subsequently reported, the case was about so much more than printer cartridges, with far-reaching implications as printer giant Lexmark attempted to – as one media outlet reported – “crush printer reseller Impression Products.”

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At the heart of the case is the right of consumers (and businesses) to own the goods outright that they purchase, protected by the first sale doctrine which limits the patent rights of the manufacturer. These elements have 150 years of standing and help to keep in check the threat of monopoly by the product makers. The underpinnings of modern-day commerce can be found in these doctrines that allow for consumers to own what they buy outright, and to trade and resell and repair what they own.

Essentially a power grab in the works, Lexmark was attempting to extend its patent rights post the sale of the printer cartridge. If successful in court, this had the potential to give manufacturers control over their products, through patent claims and litigation, well after their products were sold and Lexmark has been paid its price by the purchaser.

When the Association of Medical Device Reprocessors (AMDR), the global trade association representing the interests of commercial medical device reprocessing and remanufacturing companies, learned of the court rulings leading up to the U.S. Supreme Court case, we took action. AMDR joined advocacy groups, nonprofits and many leading technology companies and filed an amicus curiae (friend of the court) brief in support of Impression Products to underscore the importance of the long-standing ”first sale” doctrine at issue in this case.

In its brief, AMDR highlighted that, for over 150 years, the law has encouraged the right of consumers to reprocess, repair, recycle or resell their property as they see fit.

AMDR believes we have a duty and obligation to promote the safety, savings and sustainability benefits brought to health care by the medical device reprocessing industry, and we could not overlook any prospective threat to the industry or to our health care partners, so we filed the brief with the court.

AMDR members have been selling safe, lower-cost, FDA-regulated, reprocessed medical devices for 20 years. In addition to relying on FDA requirements, we’ve relied on the long-standing first sale doctrine to remanufacture medical devices that help reduce waste and that cost up to 40 percent less than original devices.

Ultimately, the Supreme Court ruled in favor of Impression Products, and reasserted the first sale doctrine and patent exhaustion.
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