Use Liability: From Whence Does It Derive?
November 17, 2006 10:28 AM Subscribe
If I purchase something, but it violates a patent, does liability transfer to me? Do I have to cease use of something I purchased because its original creator didn't manage the IP correctly? Might I, in fact, need to pay damages or sacrifice profits due to their tainted acquisition path? What law is specifically involved here?
Unless otherwise agreed a seller who is a merchant regularly dealing in goods of the kind warrants that the goods shall be delivered free of the rightful claim of any third person by way of infringement or the like but a buyer who furnishes specifications to the seller must hold the seller harmless against any such claim which arises out of compliance with the specifications
posted by caddis at 1:07 PM on November 17, 2006
posted by caddis at 1:07 PM on November 17, 2006
(I am not a lawyer, this is not legal advice. Seek competent counsel for advice on your particular situation.)
The question you ask sits at an interesting intersection of patent, antitrust, and contract law, and the answer is "it depends."
The first relevant doctrine, patent exhaustion or "the first sale doctrine for patents" basically states that when a patentee sells a patented item to (ultimately) a consumer, along with the item goes an implied license to use the purchased item. For example, if you buy a convertible car-top replacement kit, you can use it without infringing the patent.
However, the patent holder does in some situations have the right to sell the item with additional strings attached, such as requiring or forbidding certain uses of the item. For example, a printer cartridge manufacturer can prohibit refilling of its catridges in order to facilitate selling then less expensively.
So, thusfar it appears that you're OK to use the patented item as long as there's no sales agreement requiring you to perform or abstain from a particular action. However, the analysis gets somewhat more complicated if the patent includes methods, which more and more patents do... then, actions you take could be literally infringing even absent a sales agreement requiring you to take certain actions. This is a long way of saying that jellicle is not quite right; if MS has a valid method patent over some piece of software that Linux infringes, for example, it is not clear whether your use of the infringing software would also constitute infringement. It would depend on the wording of the patent; if you're sufficiently concerned about this possibility, contact a lawyer.
On preview, the UCC provision that caddis points out is an overridable default rule and there is a strong possibility that some fine print in the sales agreement overrides it and lets liability pass through. Not a certainty, but a possibility.
posted by rkent at 1:30 PM on November 17, 2006
The question you ask sits at an interesting intersection of patent, antitrust, and contract law, and the answer is "it depends."
The first relevant doctrine, patent exhaustion or "the first sale doctrine for patents" basically states that when a patentee sells a patented item to (ultimately) a consumer, along with the item goes an implied license to use the purchased item. For example, if you buy a convertible car-top replacement kit, you can use it without infringing the patent.
However, the patent holder does in some situations have the right to sell the item with additional strings attached, such as requiring or forbidding certain uses of the item. For example, a printer cartridge manufacturer can prohibit refilling of its catridges in order to facilitate selling then less expensively.
So, thusfar it appears that you're OK to use the patented item as long as there's no sales agreement requiring you to perform or abstain from a particular action. However, the analysis gets somewhat more complicated if the patent includes methods, which more and more patents do... then, actions you take could be literally infringing even absent a sales agreement requiring you to take certain actions. This is a long way of saying that jellicle is not quite right; if MS has a valid method patent over some piece of software that Linux infringes, for example, it is not clear whether your use of the infringing software would also constitute infringement. It would depend on the wording of the patent; if you're sufficiently concerned about this possibility, contact a lawyer.
On preview, the UCC provision that caddis points out is an overridable default rule and there is a strong possibility that some fine print in the sales agreement overrides it and lets liability pass through. Not a certainty, but a possibility.
posted by rkent at 1:30 PM on November 17, 2006
We can't really address your issue without more facts effugas. In general anyone who uses a patented item without being the owner or licensee of the patent is infringing. However, there are so many ways in which you may either not be infringing, the patent may be invalid or your use may be so small as to not be noticed by the patent holder. For instance as rkent said, if the items legitimately came from the patent holder then you should have an implied license. If you bought say a bicycle from Trek which infringes a Schwinn patent then Trek should have warranted you. Beside, manufacturers hate to sue potential customers; Schwinn would just sue Trek. It can get much more complicated of course and if you could be looking at some serious liability it would behoove you to seek advice from a patent attorney who can review your devices, the patents etc.
posted by caddis at 2:34 PM on November 17, 2006
posted by caddis at 2:34 PM on November 17, 2006
Response by poster: caddis--
We are entering a future, very shortly, where signifcant quantities of core patents are held by those who don't manufacture anything. So the concept of suing a potential customer is meaningless -- they're a customer insomuch as they're someone who pays, not necessarily for anything.
Where I'm getting concerned, is that there feels like a brewing collision between the concept of owning something, and the reality of submarine patents. Did the manufacturer of my vehicle violate any patents during its construction? If so, certainly there can be no implied license that was ever given to me...does that mean someone can take my car? Can they charge me royalties for the use of the thing?
Suppose the seller goes out of business, and thus cannot cover his warrant that there will be no third party claims. Can they repo my car now?
Do I own something, if someone else can charge me rent on it?
People are thinking of this in mere terms of Microsoft. I think we saw the beginnings of this legal theory with Blackberry v. NTP, but that at least had the trappings of a centralized service that could be shut down and yet would still impact product in the field. I'm kind of curious if everything I own can get me sued, as per prevailing IP theory.
--Dan
posted by effugas at 12:53 AM on November 18, 2006
We are entering a future, very shortly, where signifcant quantities of core patents are held by those who don't manufacture anything. So the concept of suing a potential customer is meaningless -- they're a customer insomuch as they're someone who pays, not necessarily for anything.
Where I'm getting concerned, is that there feels like a brewing collision between the concept of owning something, and the reality of submarine patents. Did the manufacturer of my vehicle violate any patents during its construction? If so, certainly there can be no implied license that was ever given to me...does that mean someone can take my car? Can they charge me royalties for the use of the thing?
Suppose the seller goes out of business, and thus cannot cover his warrant that there will be no third party claims. Can they repo my car now?
Do I own something, if someone else can charge me rent on it?
People are thinking of this in mere terms of Microsoft. I think we saw the beginnings of this legal theory with Blackberry v. NTP, but that at least had the trappings of a centralized service that could be shut down and yet would still impact product in the field. I'm kind of curious if everything I own can get me sued, as per prevailing IP theory.
--Dan
posted by effugas at 12:53 AM on November 18, 2006
This thread is closed to new comments.
Since selling or making the patented device are also excludable, and since those are easier to discover than merely using, most patent-holders concentrate their enforcement against selling or making the patented device, and not against using it.
If this is a roundabout way of asking about Microsoft and Linux, Microsoft is full of shit. See groklaw.net for many articles about legal issues and Linux.
posted by jellicle at 11:26 AM on November 17, 2006