A common law doctrine of exhaustion based on an implied licence: A Canadian perspective

Abstract

This article redefined the implied renunciation theory by blending the concepts of an implied licence and patent exhaustion. The refined theory is the common law doctrine of exhaustion, under which the patentee's exclusive right is effectively exhausted, to the extent of the purchaser's right to a patented product. The purchaser's right is based on an implied licence that is given on a conditional basis, and so is the effective exhaustion of the exclusive right under the patent. The effective exhaustion happens between the patentee and the purchaser, not over the patented product. Due to the conditional basis of the purchaser's right and the inter partes exhaustion, the implications of the common law doctrine of exhaustion are distinct from the exhaustion theory. At the heart of Canadian patent law concerning the purchasers' rights to patented products, there is indeed an implied licence.