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This is really similar to the concept of 'first sale' in copyright law, which similarly prevents the copyright holder from using copyright to restrict what a bu

This is really similar to the concept of 'first sale' in copyright law, which similarly prevents the copyright holder from using copyright to restrict what a buyer does with the object. Glad to see it extended to patent law as well.

DannyBee 9y ago
Yes they both stem from common law disfavouring restraints on alienation.
- _delirium 9y ago
  Something I've searched for but not found a layperson introduction to: any idea why that doesn't apply to real estate? Deed restrictions that purport to put conditions on how property can be resold have repeatedly been upheld, except for a really narrow, somewhat recent carve-out for no-selling-to-black-people deed restrictions, which were held unenforceable, but specifically because they were racially discriminatory [1], not because of any general principle that covenants can't restrict alienation of property. [1] https://en.wikipedia.org/wiki/Shelley_v._Kraemer https://en.wikipedia.org/wiki/Shelley_v._Kraemer
  - zerocrates 9y ago
    Restrictions and covenants and so on are very common, but actual restraints on alienation or sale itself aren't so much, at least not enforceable ones; they're heavily disfavored in the realm of real estate as well.
  - toast0 9y ago
    Many restrictions may be implicitly time limited by the common law rule against perpetuities; but different rules apply to real estate and retail sale because of the process to buy either one. If I buy a book, I'm not bringing my lawyer to review the contract and objecting to terms in the purchase agreement; if I buy real estate, it's a major investment and I'm expected to examine the title for encumbrances and carefully consider the consequences of them; and there's a customary process (escrow) which provides for time to ensure any defects in title or other condition are remediated or compensated for to the agreement of both parties.
  - cestith 9y ago
    IANAL but I was trained at one time as a real estate agent. This is not legal advice and especially does not constitute personalized advice about anyone's particular situation. Real property is not chattel. There's an exacting legal distinction between real property and chattel. In the US, real property deeds carry what in the real estate field is sometimes called a "bundle of rights" which are by default included together but can be separable. One is the occupation and use of the land. One is the right to dispose of it to another buyer. One is the mineral rights to what's below the surface. One is inheritability. One is the freedom to put the land to particular uses. It's possible for example to negotiate a contract in which a person, party A, has nearly full ownership of land for a lifetime but it then goes to another party, and party A is not free to sell to someone else in the meantime. It's possible that you own a home under which you own no oil or gold rights. It's possible even (at least in some places) to grant a deed with lease-like restrictions such as giving your ne'er-do-well child a house and land that he actually owns, but only so long as he completes rehab and no drugs are ever found there. Deed restrictions are agreed to by a number of nearby landholders and depending on jurisdiction may count as a contract or may actually be more fundamental to the ownership of the property, which further may depend on how the property was conveyed to the buyer. In many states or counites / parishes in those states, deed restrictions are on file with a government office and apply only for a certain number of years. A certain number of landholders must agree to new restrictions. A certain lower percentage of them must agree to keep enforcing existing restrictions. Depending on the type of restriction, the nature of the organization enforcing, how equally they've been enforced in the past, the jurisdiction, and potentially other factors they may carry no weight at all or may result in civil actions up to fines, liens, and specific performance rulings to correct deviations. In Houston, or maybe it was Harris County (most of Houston is in Harris County and much of the county's land is in the city, so it's easy to forget when not using the information that often) HOAs were told that the bylaws must be on record, must be provided to property holders, must be enforced 100% the same across all restricted plots, must be mentioned at regularly held meetings, and a few other conditions must be met or they were completely null and void. I live in a community with a reasonable HOA, and I'm glad it's neither a free-for-all (there's little to no zoning at the city level) nor one of those HOAs that charges hundreds of dollars a month to come and measure the grass and use a spectrometer on the exterior paint.
  - DannyBee 9y ago
    Interestingly, this all started in real estate, but it's changed over the years. Real estate is almost exclusively state law, so it moves faster and is different among states :) Federal law moves slower.
chc 9y ago
The first sale doctrine was already reflected in both areas of law. What this decision is about is whether patents are still exhausted if you sell the product with an EULA-style list of restrictions. Lexmark argued that because they specified that the cartridges were only to be used once, they retained their rights and ability to sue. The court determined that the restrictive sale contract did not prevent patent exhaustion.
- lisper 9y ago
  Not quite. The court determined that sale exhausts their ability to sue under patent law. They explicitly left open the possibility that they could sue (and prevail) under contract law. (The problem with suing under contract law is that they would have to sue the original purchaser, which presents significant logistical challenges.)

DannyBee 9y ago

Yes they both stem from common law disfavouring restraints on alienation.

_delirium 9y ago
Something I've searched for but not found a layperson introduction to: any idea why that doesn't apply to real estate? Deed restrictions that purport to put conditions on how property can be resold have repeatedly been upheld, except for a really narrow, somewhat recent carve-out for no-selling-to-black-people deed restrictions, which were held unenforceable, but specifically because they were racially discriminatory [1], not because of any general principle that covenants can't restrict alienation of property. [1] https://en.wikipedia.org/wiki/Shelley_v._Kraemer https://en.wikipedia.org/wiki/Shelley_v._Kraemer
- zerocrates 9y ago
  Restrictions and covenants and so on are very common, but actual restraints on alienation or sale itself aren't so much, at least not enforceable ones; they're heavily disfavored in the realm of real estate as well.
- toast0 9y ago
  Many restrictions may be implicitly time limited by the common law rule against perpetuities; but different rules apply to real estate and retail sale because of the process to buy either one. If I buy a book, I'm not bringing my lawyer to review the contract and objecting to terms in the purchase agreement; if I buy real estate, it's a major investment and I'm expected to examine the title for encumbrances and carefully consider the consequences of them; and there's a customary process (escrow) which provides for time to ensure any defects in title or other condition are remediated or compensated for to the agreement of both parties.
- cestith 9y ago
  IANAL but I was trained at one time as a real estate agent. This is not legal advice and especially does not constitute personalized advice about anyone's particular situation. Real property is not chattel. There's an exacting legal distinction between real property and chattel. In the US, real property deeds carry what in the real estate field is sometimes called a "bundle of rights" which are by default included together but can be separable. One is the occupation and use of the land. One is the right to dispose of it to another buyer. One is the mineral rights to what's below the surface. One is inheritability. One is the freedom to put the land to particular uses. It's possible for example to negotiate a contract in which a person, party A, has nearly full ownership of land for a lifetime but it then goes to another party, and party A is not free to sell to someone else in the meantime. It's possible that you own a home under which you own no oil or gold rights. It's possible even (at least in some places) to grant a deed with lease-like restrictions such as giving your ne'er-do-well child a house and land that he actually owns, but only so long as he completes rehab and no drugs are ever found there. Deed restrictions are agreed to by a number of nearby landholders and depending on jurisdiction may count as a contract or may actually be more fundamental to the ownership of the property, which further may depend on how the property was conveyed to the buyer. In many states or counites / parishes in those states, deed restrictions are on file with a government office and apply only for a certain number of years. A certain number of landholders must agree to new restrictions. A certain lower percentage of them must agree to keep enforcing existing restrictions. Depending on the type of restriction, the nature of the organization enforcing, how equally they've been enforced in the past, the jurisdiction, and potentially other factors they may carry no weight at all or may result in civil actions up to fines, liens, and specific performance rulings to correct deviations. In Houston, or maybe it was Harris County (most of Houston is in Harris County and much of the county's land is in the city, so it's easy to forget when not using the information that often) HOAs were told that the bylaws must be on record, must be provided to property holders, must be enforced 100% the same across all restricted plots, must be mentioned at regularly held meetings, and a few other conditions must be met or they were completely null and void. I live in a community with a reasonable HOA, and I'm glad it's neither a free-for-all (there's little to no zoning at the city level) nor one of those HOAs that charges hundreds of dollars a month to come and measure the grass and use a spectrometer on the exterior paint.
- DannyBee 9y ago
  Interestingly, this all started in real estate, but it's changed over the years. Real estate is almost exclusively state law, so it moves faster and is different among states :) Federal law moves slower.

chc 9y ago

The first sale doctrine was already reflected in both areas of law. What this decision is about is whether patents are still exhausted if you sell the product with an EULA-style list of restrictions. Lexmark argued that because they specified that the cartridges were only to be used once, they retained their rights and ability to sue. The court determined that the restrictive sale contract did not prevent patent exhaustion.

lisper 9y ago
Not quite. The court determined that sale exhausts their ability to sue under patent law. They explicitly left open the possibility that they could sue (and prevail) under contract law. (The problem with suing under contract law is that they would have to sue the original purchaser, which presents significant logistical challenges.)