Patent Holders’ Contractual Restrictions on Downstream Purchasers in the United States and European Union through Quanta Prism

The Quanta judgement clarifies the US patent exhaustion doctrine on the basis of an authorized sale by the patent holder. It also contributes to the prism of patent-antitrust-contract laws to scrutinize contractual restrictions better on downstream purchasers. There are two main steps in the process of applying this prism. The first step is to determine the patent exhaustion issue. The second step is to evaluate such contractual restrictions through either the intersection of patent and antitrust laws or the intersection of contract and antitrust laws, or both intersections in some special cases. The correctness of determining both whether patent exhaustion is triggered and how antitrust law intervenes as a second filter plays a very important role in applying the Quanta-inspired prism. Through this prism, some Federal Circuit’s decisions are re-visited, and the European Union perspective is analyzed in comparison with the US perspective. This article concludes that patent holders’ contractual restrictions on downstream purchasers will be properly scrutinized under the prism of patent-antitrust-contract laws if promoting innovation and competition on the market as well as protecting customer welfare are respected