Authorized Foreign Sale Exhausts Patent Rights Where License Includes Right to Import

The court granted in part plaintiff's motion for summary judgment that defendant's infringement claims for three of its data storage patents were barred by patent exhaustion even though the sales from defendant's predecessor's licensees to plaintiff occurred overseas. "[W]hile the mere purchase of an item overseas that embodies a U.S. patent may not give the purchaser a right to import it into the United States, here [the licensee] had such a right under the parties’ negotiated license agreement. [Defendant] does not suggest that if [the licensee] itself had shipped the products to this country prior to resale, there still would have been a viable infringement claim against [the licensee] or any of its customers. . . . [The licensee] already gave consideration for the right to import devices embodying the patented inventions. That title to the chips passed before the shipping to this country took place is too thin a reed on which to permit the patentee an 'end run' around the principle that it may only recover once."

Sandisk Corporation v. Round Rock Research LLC, 3-11-cv-05243 (CAND June 13, 2014, Order) (Seeborg, J.)