Impression Products, Inc. v. Lexmark International, Inc.

NOTICE: This opinion is subject to
formal revision before publication in the preliminary print of the
United States Reports. Readers are requested to notify the Reporter
of Decisions, Supreme Court of the United States, Washington,
D. C. 20543, of any typographical or other formal errors, in
order that corrections may be made before the preliminary print
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															SUPREME COURT OF THE UNITED STATES

															_________________

															No. 15–1189

															_________________

															IMPRESSION PRODUCTS, INC., PETITIONER v. LEXMARK INTERNATIONAL, INC.

															on writ of certiorari to the united states
court of appeals for the federal circuit

															[May 30, 2017]

															Chief Justice Roberts delivered the opinion of
the Court.

															A United States patent entitles the patent
holder (the “patentee”), for a period of 20 years, to “exclude
others from making, using, offering for sale, or selling [its]
invention throughout the United States or importing the invention
into the United States.” 35 U. S. C. §154(a). Whoever
engages in one of these acts “without authority” from the patentee
may face liability for patent infringement. §271(a).

															When a patentee sells one of its products,
however, the patentee can no longer control that item through the
patent laws—its patent rights are said to “exhaust.” The purchaser
and all subsequent owners are free to use or resell the product
just like any other item of personal property, without fear of an
infringement lawsuit.

															This case presents two questions about the scope
of the patent exhaustion doctrine: First, whether a patentee that
sells an item under an express restriction on the purchaser’s right
to reuse or resell the product may enforce that restriction through
an infringement lawsuit. And second, whether a patentee exhausts
its patent rights by selling its product outside the United States,
where American patent laws do not apply. We conclude that a
patentee’s decision to sell a product exhausts all of its patent
rights in that item, regardless of any restrictions the patentee
purports to impose or the location of the sale.

															I

															The underlying dispute in this case is about
laser printers—or, more specifically, the cartridges that contain
the powdery substance, known as toner, that laser printers use to
make an image appear on paper. Respondent Lexmark International,
Inc. designs, manufactures, and sells toner cartridges to consumers
in the United States and around the globe. It owns a number of
patents that cover components of those cartridges and the manner in
which they are used.

															When toner cartridges run out of toner they can
be refilled and used again. This creates an opportunity for other
companies—known as remanufacturers—to acquire empty Lexmark
cartridges from purchasers in the United States and abroad, refill
them with toner, and then resell them at a lower price than the new
ones Lexmark puts on the shelves.

															Not blind to this business problem, Lexmark
structures its sales in a way that encourages customers to return
spent cartridges. It gives purchasers two options: One is to buy a
toner cartridge at full price, with no strings attached. The other
is to buy a cartridge at roughly 20-percent off through Lexmark’s
“Return Program.” A customer who buys through the Return Program
still owns the cartridge but, in exchange for the lower price,
signs a contract agreeing to use it only once and to refrain from
transferring the empty cartridge to anyone but Lexmark. To enforce
this single-use/no-resale restriction, Lexmark installs a microchip
on each Return Program cartridge that prevents reuse once the toner
in the cartridge runs out.

															Lexmark’s strategy just spurred remanufacturers
toget more creative. Many kept acquiring empty Return Program
cartridges and developed methods to counteract the effect of the
microchips. With that technologicalobstacle out of the way, there
was little to prevent the re-manufacturers from using the Return
Program cartridges in their resale business. After all, Lexmark’s
contractual single-use/no-resale agreements were with the initial
customers, not with downstream purchasers like the
remanufacturers.

															Lexmark, however, was not so ready to concede
that its plan had been foiled. In 2010, it sued a number of
remanufacturers, including petitioner Impression Products, Inc.,
for patent infringement with respect to two groups of cartridges.
One group consists of Return Program cartridges that Lexmark sold
within the United States. Lexmark argued that, because it expressly
prohibited reuse and resale of these cartridges, the
remanufacturers infringed the Lexmark patents when they refurbished
and resold them. The other group consists of all toner cartridges
that Lexmark sold abroad and that remanufacturers imported into the
country. Lexmark claimed that it never gave anyone authority to
import these cartridges, so the remanufacturers ran afoul of its
patent rights by doing just that.

															Eventually, the lawsuit was whittled down to one
defendant, Impression Products, and one defense: that Lexmark’s
sales, both in the United States and abroad, exhausted its patent
rights in the cartridges, so Impression Products was free to
refurbish and resell them, and to import them if acquired abroad.
Impression Products filed separate motions to dismiss with respect
to both groups of cartridges. The District Court granted the motion
as to the domestic Return Program cartridges, but denied the motion
as to the cartridges Lexmark sold abroad. Both parties
appealed.

															The Federal Circuit considered the appeals en
banc and ruled for Lexmark with respect to both groups of
cartridges. The court began with the Return Program cartridgesthat
Lexmark sold in the United States. Relying on its decision in Mallinckrodt, Inc. v. Medipart, Inc. , 976 F. 2d
700 (1992), the Federal Circuit held that a patentee may sell an
item and retain the right to enforce, through patent infringement
lawsuits, “clearly communicated, . . . lawful
restriction[s] as to post-sale use or resale.” 816 F. 3d 721,
735 (2016). The exhaustion doctrine, the court reasoned, derives
from the prohibition on making, using, selling, or importing items
“without authority.” Id. , at 734 (quoting 35
U. S. C. §271(a)). When you purchase an item you
presumptively also acquire the authority to use or resell the item
freely, but that is just a presumption; the same authority does not
run with the item when the seller restricts post-sale use or
resale. 816 F. 3d, at 742. Because the parties agreed that
Impression Products knew about Lexmark’s restrictions and that
those restrictions did not violate any laws, the Federal Circuit
concluded that Lexmark’s sales had not exhausted all of its patent
rights, and that the company could sue for infringement when
Impression Products refurbished and resold Return Program
cartridges.

															As for the cartridges that Lexmark sold abroad,
the Federal Circuit once again looked to its precedent. In Jazz
Photo Corp. v. International Trade Commission , 264
F. 3d 1094 (2001), the court had held that a patentee’s
decision to sell a product abroad did not terminate its ability to
bring an infringement suit against a buyer that “import[ed] the
article and [sold] . . . it in the United States.” 816
F. 3d, at 726–727. That rule, the court concluded, makes good
sense: Exhaustion is justified when a patentee receives “the reward
available from [selling in] American markets,” which does not occur
when the patentee sells overseas, where the American patent offers
no protection and therefore cannot bolster the price of the
patentee’s goods. Id. , at 760–761. As a result, Lexmark was
free to exercise its patent rights to sue Impression Products for
bringing the foreign-sold cartridges to market in the United
States.

															Judge Dyk, joined by Judge Hughes, dissented. In
their view, selling the Return Program cartridges in the United
States exhausted Lexmark’s patent rights in those items because any
“authorized sale of a patented article . . . free[s] the
article from any restrictions on use or sale based on the patent
laws.” Id. , at 775–776. As for the foreign cartridges, the
dissenters would have held that a sale abroad also results in
exhaustion, unless the seller “explicitly reserve[s] [its] United
States patent rights” at the time of sale. Id. , at 774, 788.
Because Lexmark failed to make such an express reservation, its
foreign sales exhausted its patent rights.

															We granted certiorari to consider the Federal
Circuit’s decisions with respect to both domestic and international
exhaustion, 580 U. S. ___ (2016), and now reverse.

															II

															A

															First up are the Return Program cartridges
that Lexmark sold in the United States. We conclude that Lexmark
exhausted its patent rights in these cartridges the moment it sold
them. The single-use/no-resale restrictions in Lexmark’s contracts
with customers may have been clear and enforceable under contract
law, but they do not entitle Lexmark to retain patent rights in an
item that it has elected to sell.

															The Patent Act grants patentees the “right to
exclude others from making, using, offering for sale, or selling
[their] invention[s].” 35 U. S. C. §154(a). For over 160
years, the doctrine of patent exhaustion has imposed a limit on
that right to exclude. See Bloomer v. McQuewan , 14
How. 539 (1853). The limit functions automatically: When a patentee
chooses to sell an item, that product “is no longer within the
limits of the monopoly” and instead becomes the “private,
individual property” of the purchaser, with the rights and benefits
that come along with ownership. Id. , at 549–550. A patentee
is free to set the price and negotiate contracts with purchasers,
but may not, “ by virtue of his patent , control the use or
disposition” of the product after ownership passes to the
purchaser. United States v. Univis Lens Co. , 316
U. S. 241, 250 (1942) (emphasis added). The sale “terminates
all patent rights to that item.” Quanta Computer, Inc. v. LG Electronics, Inc. , 553 U. S. 617, 625 (2008) .

															This well-established exhaustion rule marks the
point where patent rights yield to the common law principle against
restraints on alienation. The Patent Act “promote[s] the progress
of science and the useful arts by granting to [inventors] a limited
monopoly” that allows them to “secure the financial rewards” for
their inventions. Univis , 316 U. S., at 250. But once a
patentee sells an item, it has “enjoyed all the rights secured” by
that limited monopoly. Keeler v. Standard Folding Bed
Co. , 157 U. S. 659, 661 (1895) . Because “the purpose of
the patent law is fulfilled . . . when the patentee has
received his reward for the use of his invention,” that law
furnishes “no basis for restraining the use and enjoyment of the
thing sold.” Univis , 316 U. S., at 251.

															We have explained in the context of copyright
law that exhaustion has “an impeccable historic pedigree,” tracing
its lineage back to the “common law’s refusal to permit restraints
on the alienation of chattels.” Kirtsaeng v. John Wiley
& Sons, Inc. , 568 U. S. 519, 538 (2013) . As Lord Coke
put it in the 17th century, if an owner restricts the resale or use
of an item after selling it, that restriction “is voide, because
. . . it is against Trade and Traffique, and bargaining
and contracting betweene man and man.” 1 E. Coke, Institutes of the
Laws of England §360, p. 223 (1628); see J. Gray, Restraints on the
Alienation of Prop-erty §27, p. 18 (2d ed. 1895) (“A
condition or conditional limitation on alienation attached to a
transfer of the entire interest in personalty is as void as if
attached to a fee simple in land”).

															This venerable principle is not, as the Federal
Circuit dismissively viewed it, merely “one common-law
jurisdiction’s general judicial policy at one time toward
anti-alienation restrictions.” 816 F. 3d, at 750. Congress
enacted and has repeatedly revised the Patent Act against the
backdrop of the hostility toward restraints on alienation. That
enmity is reflected in the exhaustion doctrine. The patent laws do
not include the right to “restrain[ ] . . . further
alienation” after an initial sale; such conditions have been
“hateful to the law from Lord Coke’s day to ours” and are
“obnoxious to the public interest.” Straus v. Victor
Talking Machine Co. , 243 U. S. 490, 501 (1917) . “The
inconvenience and annoyance to the public that an opposite
conclusion would occasion are too obvious to require illustration.” Keeler , 157 U. S., at 667.

															But an illustration never hurts. Take a shop
that restores and sells used cars. The business works because the
shop can rest assured that, so long as those bringing in the cars
own them, the shop is free to repair and resell those vehicles.
That smooth flow of commerce would sputter if companies that make
the thousands of parts that go into a vehicle could keep their
patent rights after the first sale. Those companies might, for
instance, restrict resale rights and sue the shop owner for patent
infringement. And even if they refrained from imposing such
restrictions, the very threat of patent liability would force the
shop to invest in efforts to protect itself from hidden lawsuits.
Either way, extending the patent rights beyond the first sale would
clog the channels of commerce, with little benefit from the extra
control that the patentees retain. And advances in technology,
along with increasingly complex supply chains, magnify the problem.
See Brief for Costco Wholesale Corp. et al. as Amici
Curiae 7–9; Brief for Intel Corp. et al. as Amici
Curiae 17, n. 5 (“A generic smartphone assembled from
various high-tech components could practice an estimated 250,000
patents”).

															This Court accordingly has long held that, even
when a patentee sells an item under an express restriction, the
patentee does not retain patent rights in that product. In Boston Store of Chicago v. American Graphophone Co. ,
for example, a manufacturer sold graphophones—one of the earliest
devices for recording and reproducing sounds—to retailers under
contracts requiring those stores to resell at a specific price. 246
U. S. 8 –18 (1918). When the manufacturer brought a patent
infringement suit against a retailer who sold for less, we
concluded that there was “no room for controversy” about the
result: By selling the item, the manufacturer placed it “beyond the
confines of the patent law, [and] could not, by qualifying
restrictions as to use, keep [it] under the patent monopoly.” Id. , at 20, 25.

															Two decades later, we confronted a similar
arrangement in United States v. Univis Lens Co .
There, a company that made eyeglass lenses authorized an agent to
sell its products to wholesalers and retailers only if they
promised to market the lenses at fixed prices. The Government filed
an antitrust lawsuit, and the company defended its arrangement on
the ground that it was exercising authority under the Patent Act.
We held that the initial sales “relinquish[ed] . . . the
patent monopoly with respect to the article[s] sold,” so the
“stipulation . . . fixing resale prices derive[d] no
support from the patent and must stand on the same footing” as
restrictions on unpatented goods. 316 U. S., at 249–251.

															It is true that Boston Store and Univis involved resale price restrictions that, at the time
of those decisions, violated the antitrust laws. But in both cases
it was the sale of the items, rather than the illegality of the
restrictions, that prevented the patentees from enforcing those
resale price agreements through patent infringement suits. And if
there were any lingering doubt that patent exhaustion applies even
when a sale is subject to an express, otherwise lawful restriction,
our recent decision in Quanta Computer, Inc. v. LG
Electronics, Inc. settled the matter. In that case, a
technology company—with authorization from the patentee—sold
microprocessors under contracts requiring purchasers to use those
processors with other parts that the company manufactured. One
buyer disregarded the restriction, and the patentee sued for
infringement. Without so much as mentioning the lawfulness of the
contract, we held that the patentee could not bring an infringement
suit because the “authorized sale . . . took its products
outside the scope of the patent monopoly.” 553 U. S., at
638.

															Turning to the case at hand, we conclude that
this well-settled line of precedent allows for only one answer:
Lexmark cannot bring a patent infringement suit against Impression
Products to enforce the single-use/no-resale provision accompanying
its Return Program cartridges. Once sold, the Return Program
cartridges passed outside of the patent monopoly, and whatever
rights Lexmark retained are a matter of the contracts with its
purchasers, not the patent law.

															B

															The Federal Circuit reached a different result
largely because it got off on the wrong foot. The “exhaustion
doctrine,” the court believed, “must be understood as an
interpretation of” the infringement statute, which prohibits anyone
from using or selling a patented article “without authority” from
the patentee. 816 F. 3d, at 734 (quoting 35 U. S. C.
§271(a)). Exhaustion reflects a default rule that a patentee’s
decision to sell an item “ presumptively grant[s] ‘authority’
to the purchaser to use it and resell it.” 816 F. 3d, at 742.
But, the Federal Circuit explained, the patentee does not have to
hand over the full “bundle of rights” every time. Id. , at
741 (internal quotation marks omitted). If the patentee expressly
withholds a stick from the bundle—perhaps by restricting the
purchaser’s resale rights—the buyer never acquires that withheld
authority, and the patentee may continue to enforce its right to
exclude that practice under the patent laws.

															The misstep in this logic is that the exhaustion
doctrine is not a presumption about the authority that comes along
with a sale; it is instead a limit on “the scope of the patentee’s rights .” United States v. General Elec.
Co. , 272 U. S. 476, 489 (1926) (emphasis added). The right
to use, sell, or import an item exists independently of the Patent
Act. What a patent adds—and grants exclusively to the pat-entee—is
a limited right to prevent others from engaging in those practices.
See Crown Die & Tool Co. v. Nye Tool & Machine
Works , 261 U. S. 24, 35 (1923) . Exhaustion extinguishes
that exclusionary power. See Bloomer , 14 How., at 549 (the
purchaser “exercises no rights created by the act of Congress, nor
does he derive title to [the item] by virtue of the . . .
exclusive privilege granted to the patentee”). As a result, the
sale transfers the right to use, sell, or import because those are
the rights that come along with ownership, and the buyer is free
and clear of an infringement lawsuit because there is no
exclusionary right left to enforce.

															The Federal Circuit also expressed concern that
preventing patentees from reserving patent rights when they sell
goods would create an artificial distinction between such sales and
sales by licensees. Patentees, the court explained, often license
others to make and sell their products, and may place restrictions
on those licenses. A computer developer could, for instance,
license a manufacturer to make its patented devices and sell them
only for non-commercial use by individuals. If a licensee breaches
the license by selling a computer for commercial use, the patentee
can sue the licensee for infringement. And, in the Federal
Circuit’s view, our decision in General Talking Pictures Corp. v. Western Elec. Co. , 304 U. S. 175 ,
aff’d on reh’g, 305 U. S. 124 (1938) , established that—when a
patentee grants a license “under clearly stated restrictions on
post-sale activities” of those who purchase products from the
licensee—the patentee can also sue for infringement those
purchasers who knowingly violate the restrictions. 816 F. 3d,
at 743–744. If patentees can employ licenses to impose post-sale
restrictions on purchasers that are enforceable through
infringement suits, the court concluded, it would make little sense
to prevent patentees from doing so when they sell directly to
consumers.

															The Federal Circuit’s concern is misplaced. A
patentee can impose restrictions on licensees because a license
does not implicate the same concerns about restraints on alienation
as a sale. Patent exhaustion reflects the principle that, when an
item passes into commerce, it should not be shaded by a legal cloud
on title as it moves through the marketplace. But a license is not
about passing title to a product, it is about changing the contours
of the patentee’s monopoly: The patentee agrees not to exclude a
licensee from making or selling the patented invention, expanding
the club of authorized producers and sellers. See General Elec.
Co. , 272 U. S., at 489–490. Because the patentee is
exchanging rights, not goods, it is free to relinquish only a
portion of its bundle of patent protections.

															A patentee’s authority to limit licensees does not, as the Federal Circuit thought, mean that patentees can
use licenses to impose post-sale restrictions on purchasers that are enforceable through the patent laws. So long as a licensee
complies with the license when selling an item, the patentee has,
in effect, authorized the sale. That licensee’s sale is treated,
for purposes of patent exhaustion, as if the patentee made the sale
itself. The result: The sale exhausts the patentee’s rights in that
item. See Hobbie v. Jennison , 149 U. S. 355 –363
(1893). A license may require the licensee to impose a restriction
on purchasers, like the license limiting the computer manufacturer
to selling for non-commercial use by individuals. But if the
licensee does so—by, perhaps, having each customer sign a contract
promising not to use the computers in business—the sale nonetheless
exhausts all patent rights in the item sold. See Motion Picture
Patents Co. v. Universal Film Mfg. Co. , 243 U. S.
502 –507, 516 (1917). The purchasers might not comply with the
restriction, but the only recourse for the licensee is through
contract law, just as if the patentee itself sold the item with a
restriction. General Talking Pictures involved a
fundamentally different situation: There, a licensee “knowingly
ma[de] . . . sales . . . outside the
scope of its license.” 304 U. S., at 181–182 (emphasis added).
We treated the sale “as if no license whatsoever had been granted”
by the patentee, which meant that the patentee could sue both the
licensee and the purchaser—who knew about the breach—for
infringement. General Talking Pictures Corp. v. Western
Elec. Co. , 305 U. S. 124, 127 (1938) . This does not mean
that patentees can use licenses to impose post-sale restraints on
purchasers. Quite the contrary: The licensee infringed the
patentee’s rights because it did not comply with the terms
of its license, and the patentee could bring a patent suit against
the purchaser only because the purchaser participated in the
licensee’s infringement. General Talking Pictures , then,
stands for the modest principle that, if a patentee has not given
authority for a licensee to make a sale, that sale cannot exhaust
the patentee’s rights.

															In sum, patent exhaustion is uniform and
automatic. Once a patentee decides to sell—whether on its own or
through a licensee—that sale exhausts its patent rights, regardless
of any post-sale restrictions the patentee purports to impose,
either directly or through a license.

															III

															Our conclusion that Lexmark exhausted its
patent rights when it sold the domestic Return Program cartridges
goes only halfway to resolving this case. Lexmark also sold toner
cartridges abroad and sued Impression Products for patent
infringement for “importing [Lexmark’s] invention into the United
States.” 35 U. S. C. §154(a). Lexmark contends that it
may sue for infringement with respect to all of the imported
cartridges—not just those in the Return Program—because a foreign
sale does not trigger patent exhaustion unless the patentee
“expressly or implicitly transfer[s] or license[s]” its rights.
Brief for Respondent 36–37. The Federal Circuit agreed, but we do
not. An authorized sale outside the United States, just as one
within the United States, exhausts all rights under the Patent
Act.

															This question about international exhaustion of
intellectual property rights has also arisen in the context of
copyright law. Under the “first sale doctrine,” which is codified
at 17 U. S. C. §109(a), when a copyright owner sells a
lawfully made copy of its work, it loses the power to restrict the
purchaser’s freedom “to sell or otherwise dispose of
. . . that copy.” In Kirtsaeng v. John Wiley
& Sons, Inc. , we held that this “ ‘first sale’ [rule]
applies to copies of a copyrighted work lawfully made [and sold]
abroad.” 568 U. S., at 525. We began with the text of §109(a),
but it was not decisive: The language neither “restrict[s] the
scope of [the] ‘first sale’ doctrine geographically,” nor clearly
embraces international exhaustion. Id., at 528–533. What
helped tip the scales for global exhaustion was the fact that the
first sale doctrine originated in “the common law’s refusal to
permit restraints on the alienation of chattels.” Id. , at
538. That “common-law doctrine makes no geographical distinctions.” Id., at 539. The lack of any textual basis for
distinguishing between domestic and international sales meant that
“a straightforward application” of the first sale doctrine required
the conclusion that it applies overseas. Id., at 540
(internal quotation marks omitted).

															Applying patent exhaustion to foreign sales is
just as straightforward. Patent exhaustion, too, has its roots in
the antipathy toward restraints on alienation, see supra , at
6–8, and nothing in the text or history of the Patent Act shows
that Congress intended to confine that borderless common law
principle to domestic sales. In fact, Congress has not altered
patent exhaustion at all; it remains an unwritten limit on the
scope of the patentee’s monopoly. See Astoria Fed. Sav. &
Loan Assn. v. Solimino , 501 U. S. 104, 108 (1991)
(“[W]here a common-law principle is well established,
. . . courts may take it as given that Congress has
legislated with an expectation that the principle will apply except
when a statutory purpose to the contrary is evident” (internal
quotation marks omitted)). And differentiating the patent
exhaustion and copyright first sale doctrines would make little
theoretical or practical sense: The two share a “strong similarity
. . . and identity of purpose,” Bauer & Cie v. O’Donnell , 229 U. S. 1, 13 (1913) , and many everyday
products—“automobiles, microwaves, calculators, mobile phones,
tablets, and personal computers”—are subject to both patent and
copyright protections, see Kirtsaeng , 568 U. S., at
545; Brief for Costco Wholesale Corp. et al. as Amici
Curiae 14–15. There is a “historic kinship between patent law
and copyright law,” Sony Corp. of America v. Universal
City Studios, Inc. , 464 U. S. 417, 439 (1984) , and the
bond between the two leaves no room for a rift on the question of
international exhaustion.

															Lexmark sees the matter differently. The Patent
Act, it points out, limits the patentee’s “right to exclude others”
from making, using, selling, or importing its products to acts that
occur in the United States. 35 U. S. C. §154(a). A
domestic sale, it argues, triggers exhaustion because the sale
compensates the patentee for “surrendering [those] U. S. rights.” Brief for Respondent 38. A foreign sale
is different: The Patent Act does not give patentees exclusionary
powers abroad. Without those powers, a patentee selling in a
foreign market may not be able to sell its product for the same
price that it could in the United States, and therefore is not sure
to receive “the reward guaranteed by U. S. patent law.” Id. , at 39 (internal quotation marks omitted). Absent that
reward, says Lexmark, there should be no exhaustion. In short,
there is no patent exhaustion from sales abroad because there are
no patent rights abroad to exhaust.

															The territorial limit on patent rights is,
however, no basis for distinguishing copyright protections; those
protections “do not have any extraterritorial operation” either. 5
M. Nimmer & D. Nimmer, Copyright §17.02, p. 17–26 (2017). Nor
does the territorial limit support the premise of Lexmark’s
argument. Exhaustion is a separate limit on the patent grant, and
does not depend on the patentee receiving some undefined premium
for selling the right to access the American market. A purchaser
buys an item, not patent rights. And exhaustion is triggered by the
patentee’s decision to give that item up and receive whatever fee
it decides is appropriate “for the article and the invention which
it embodies.” Univis , 316 U. S., at 251. The patentee
may not be able to command the same amount for its products abroad
as it does in the United States. But the Patent Act does not
guarantee a particular price, much less the price from selling to
American consumers. Instead, the right to exclude just ensures that
the patentee receives one reward—of whatever amount the patentee
deems to be “satisfactory compensation,” Keeler , 157
U. S., at 661—for every item that passes outside the scope of
the patent monopoly.

															This Court has addressed international patent
exhaustion in only one case, Boesch v. Gräff , decided
over 125 years ago. All that case illustrates is that a sale abroad
does not exhaust a patentee’s rights when the patentee had nothing
to do with the transaction. Boesch —from the days before the
widespread adoption of electrical lighting—involved a retailer who
purchased lamp burners from a manufacturer in Germany, with plans
to sell them in the United States. The manufacturer had authority
to make the burners under German law, but there was a hitch: Two
individuals with no ties to the German manufacturer held the
American patent to that invention. These patentees sued the
retailer for infringement when the retailer imported the lamp
burners into the United States, and we rejected the argument that
the German manufacturer’s sale had exhausted the American
patentees’ rights. The German manufacturer had no permission to
sell in the United States from the American patentees, and the
American patentees had not exhausted their patent rights in the
products because they had not sold them to anyone, so “purchasers
from [the German manufacturer] could not be thereby authorized to
sell the articles in the United States.” 133 U. S. 697, 703
(1890) .

															Our decision did not, as Lexmark contends,
exempt all foreign sales from patent exhaustion. See Brief for
Respondent 44–45. Rather, it reaffirmed the basic premise that only
the patentee can decide whether to make a sale that exhausts its
patent rights in an item. The American patentees did not do so with
respect to the German products, so the German sales did not exhaust
their rights.

															Finally, the United States, as an amicus ,
advocates what it views as a middle-ground position: that “a
foreign sale authorized by the U. S. patentee exhausts
U. S. pat-ent rights unless those rights are expressly
reserved.” Brief for United States 7–8. Its position is largely
based on policy rather than principle. The Government thinks that
an overseas “buyer’s legitimate expectation” is that a “sale
conveys all of the seller’s interest in the patented article,” so
the presumption should be that a foreign sale triggers exhaustion. Id. , at 32–33. But, at the same time, “lower courts long ago
coalesced around” the rule that “a patentee’s express reservation
of U. S. patent rights at the time of a foreign sale will be
given effect,” so that option should remain open to the patentee. Id. , at 22 (emphasis deleted).

															The Government has little more than “long ago”
on its side. In the 1890s, two circuit courts—in cases involving
the same company—did hold that patentees may use express
restrictions to reserve their patent rights in connection with
foreign sales. See Dickerson v. Tinling , 84 F. 192,
194–195 (CA8 1897); Dickerson v. Matheson , 57 F. 524,
527 (CA2 1893). But no “coalesc[ing]” ever took place: Over the
following hundred-plus years, only a smattering of lower court
decisions mentioned this express-reservation rule for foreign
sales. See, e.g ., Sanofi, S. A. v. Med-Tech
Veterinarian Prods., Inc. , 565 F. Supp. 931, 938 (NJ
1983). And in 2001, the Federal Circuit adopted its blanket rule
that foreign sales do not trigger exhaustion, even if the patentee
fails to expressly reserve its rights. Jazz Photo , 264
F. 3d, at 1105. These sparse and inconsistent decisions
provide no basis for any expectation, let alone a settled one, that
patentees can reserve patent rights when they sell abroad.

															The theory behind the Government’s
express-reservation rule also wrongly focuses on the likely
expectations of the patentee and purchaser during a sale.
Exhaustion does not arise because of the parties’ expectations
about how sales transfer patent rights. More is at stake when it
comes to patents than simply the dealings between the parties,
which can be addressed through contract law. Instead, exhaustion
occurs because, in a sale, the patentee elects to give up title to
an item in exchange for payment. Allowing patent rights to stick
remora-like to that item as it flows through the market would
violate the principle against restraints on alienation. Exhaustion
does not depend on whether the patentee receives a premium for
selling in the United States, orthe type of rights that buyers
expect to receive. As a result, restrictions and location are
irrelevant; what matters is the patentee’s decision to make a
sale.

															*  *  *

															The judgment of the United States Court of
Appeals for the Federal Circuit is reversed, and the case is
remanded for further proceedings consistent with this opinion.

															It is so ordered.

															Justice Gorsuch took no part in the
consideration or decision of this case. SUPREME COURT OF THE UNITED STATES

															_________________

															No. 15–1189

															_________________

															IMPRESSION PRODUCTS, INC., PETITIONER v. LEXMARK INTERNATIONAL, INC.

															on writ of certiorari to the united states
court of appeals for the federal circuit

															[May 30, 2017]

															Justice Ginsburg, concurring in part and
dissenting in part.

															I concur in the Court’s holding regarding
domestic exhaustion—a patentee who sells a product with an express
restriction on reuse or resale may not enforce that restriction
through an infringement lawsuit, because the U. S. sale
exhausts the U. S. patent rights in the product sold. See ante , at 5–13. I dissent, however, from the Court’s holding
on international exhaustion. A foreign sale, I would hold, does not
exhaust a U. S. inventor’s U. S. patent rights.

															Patent law is territorial. When an inventor
receives a U. S. patent, that patent provides no protection
abroad. See Deepsouth Packing Co. v. Laitram Corp. ,
406 U. S. 518, 531 (1972) (“Our patent system makes no claim
to extraterritorial effect.”). See also 35 U. S. C.
§271(a) (establishing liability for acts of patent infringement
“within the United States” and for “import[ation] into the United
States [of] any patented invention”). A U. S. pat-entee must
apply to each country in which she seeks the exclusive right to
sell her invention. Microsoft Corp. v. AT&T
Corp. , 550 U. S. 437, 456 (2007) (“[F]oreign law alone,
not United States law, currently governs the manufacture and sale
of components of patented inventions in foreign countries.”). See
also Convention at Brussels, An Additional Act Modifying the Paris
Convention for the Protection of Industrial Property of Mar. 20,
1883, Dec. 14, 1900, Art. I, 32Stat. 1940 (“Patents applied
for in the different contracting States . . . shall be
independent of the patents obtained for the same invention in the
other States.”). And patent laws vary by country; each country’s
laws “may embody different policy judgments about the relative
rights of inventors, competitors, and the public in patented
inventions.” Microsoft , 550 U. S., at 455 (internal
quotation marks omitted).

															Because a sale abroad operates independently of
the U. S. patent system, it makes little sense to say that
such a sale exhausts an inventor’s U. S. patent rights.
U. S. patent protection accompanies none of a U. S.
patentee’s sales abroad—a competitor could sell the same patented
product abroad with no U. S.-patent-law consequence.
Accordingly, the foreign sale should not diminish the protections
of U. S. law in the United States.

															The majority disagrees, in part because this
Court decided, in Kirtsaeng v. John Wiley & Sons,
Inc. , 568 U. S. 519, 525 (2013) , that a foreign sale
exhausts U. S. copyright protections. Copyright and
patent exhaustion, the majority states, “share a strong
similarity.” Ante , at 14 (internal quotation marks omitted).
I dissented from our decision in Kirtsaeng and adhere to the
view that a foreign sale should not exhaust U. S. copyright
protections. See 568 U. S., at 557.

															But even if I subscribed to Kirtsaeng ’s
reasoning with respect to copyright, that decision should bear
little weight in the patent context. Although there may be a
“historical kinship” between patent law and copyright law, Sony
Corp. of America v. Universal City Studios, Inc. , 464
U. S. 417, 439 (1984) , the two “are not identical twins,” id , at 439, n. 19 . The Patent Act contains no
analogue to 17 U. S. C. §109(a), the Copyright Act
first-sale provision analyzed in Kirtsaeng . See ante ,
at 13–14. More importantly, copyright protections, unlike patent
protections, are harmonized across countries. Under the Berne
Convention, which 174 countries have joined,[ 1 ] members “agree to treat authors from other
member countries as well as they treat their own.” Golan v. Holder , 565 U. S. 302, 308 (2012) (citing Berne
Convention for the Protection of Literary and Artistic Works, Sept.
9, 1886, as revised at Stockholm on July 14, 1967, Arts. 1, 5(1),
828 U. N. T. S. 225, 231–233). The copyright
protections one receives abroad are thus likely to be similar to
those received at home, even if provided under each country’s
separate copyright regime.

															For these reasons, I would affirm the Federal
Circuit’s judgment with respect to foreign exhaustion. Notes 1 See WIPO-Administered
Treaties: Contracting Parties: Berne Convention,
www.wipo.int/treaties/en/ShowResults.jsp?lang=en&treaty_id=5
(as last visited May 25, 2017).


Mayo Collaborative Services v. Prometheus Laboratories, Inc.

NOTICE: This opinion is subject to
formal revision before publication in the preliminary print of the
United States Reports. Readers are requested to notify the Reporter
of Decisions, Supreme Court of the United States, Washington,
D. C. 20543, of any typographical or other formal errors, in
order that corrections may be made before the preliminary print
goes to press.

															SUPREME COURT OF THE UNITED STATES

															_________________

															No. 10–1150

															_________________

															MAYO COLLABORATIVE SERVICES, dba MAYO MEDICAL
LABORATORIES, et al., PETITION- ERS v. PROMETHEUS
LABORATORIES, INC.

															on writ of certiorari to the united states
court of appeals for the federal circuit

															[March 20, 2012]

															Justice Breyer delivered the opinion of the
Court.

															Section 101 of the Patent Act defines patentable
subject matter. It says:

															“Whoever invents or discovers any new and
useful process, machine, manufacture, or composition of matter, or
any new and useful improvement thereof, may obtain a patent
therefor, subject to the conditions and requirements of this
title.” 35 U. S. C. §101.

															The Court has long held that this provision
contains an important implicit exception. “[L]aws of nature,
natural phenomena, and abstract ideas” are not patentable. Diamond v. Diehr , 450 U.S.
175 , 185 (1981); see also Bilski v. Kappos , 561
U. S. ___, ___ (2010) (slip op., at 5); Diamond v. Chakrabarty , 447 U.S.
303 , 309 (1980); Le Roy v. Tatham , 14 How. 156,
175 (1853); O’Reilly v. Morse , 15 How. 62, 112–120
(1854); cf. Neilson v. Harford , Webster’s Patent
Cases 295, 371 (1841) (English case discussing same). Thus, the
Court has written that “a new mineral discovered in the earth or a
new plant found in the wild is not patentable subject matter.
Likewise, Einstein could not patent his celebrated law that E=mc2;
nor could Newton have patented the law of gravity. Such discoveries
are ‘manifestations of . . . nature, free to all men and
reserved exclusively to none.’ ” Chakrabarty , supra , at 309 (quoting Funk Brothers Seed Co. v. Kalo Inoculant Co. , 333 U.S.
127 , 130 (1948)).

															“Phenomena of nature, though just discovered,
mental processes, and abstract intellectual concepts are not
patentable, as they are the basic tools of scientific and
technological work.” Gottschalk v. Benson , 409 U.S.
63 , 67 (1972). And monopolization of those tools through the
grant of a patent might tend to impede innovation more than it
would tend to promote it.

															The Court has recognized, however, that too
broad an interpretation of this exclusionary principle could
eviscerate patent law. For all inventions at some level embody,
use, reflect, rest upon, or apply laws of nature, natural
phenomena, or abstract ideas. Thus, in Diehr the Court
pointed out that “ ‘a process is not unpatentable simply
because it contains a law of nature or a mathematical
algorithm.’ ” 450 U. S., at 187 (quoting Parker v. Flook , 437
U.S. 584 , 590 (1978)). It added that “an application of
a law of nature or mathematical formula to a known structure or
process may well be deserving of patent protection.” Diehr , supra, at 187. And it emphasized Justice Stone’s similar
observation in Mackay Radio & Telegraph Co. v. Radio
Corp. of America, 306 U.S.
86 (1939):

															“ ‘While a scientific truth, or the
mathematical expression of it, is not a patentable invention, a
novel and useful structure created with the aid of knowledge of
scientific truth may be.’ ” 450 U. S., at 188 (quoting Mackay Radio , supra , at 94).

															See also Funk Brothers , supra , at
130 (“If there is to be invention from [a discovery of a law of
nature], it must come from the application of the law of nature to
a new and useful end”).

															Still, as the Court has also made clear, to
transform an unpatentable law of nature into a patent-eligible application of such a law, one must do more than simply
state the law of nature while adding the words “apply it.” See, e.g., Benson , supra , at 71–72 . The case before us lies at the intersection of
these basic principles. It concerns patent claims covering
processes that help doctors who use thiopurine drugs to treat
patients with autoimmune diseases determine whether a given dosage
level is too low or too high. The claims purport to apply natural
laws describing the relationships between the concentration in the
blood of certain thiopurine metabolites and the likelihood that the
drug dosage will be ineffective or induce harmful side-effects. We
must determine whether the claimed processes have transformed these
unpatentable natural laws into patent-eligible applications of
those laws. We conclude that they have not done so and that
therefore the processes are not patentable.

															Our conclusion rests upon an examination of the
particular claims before us in light of the Court’s precedents.
Those cases warn us against interpreting patent statutes in ways
that make patent eligibility “depend simply on the draftsman’s art”
without reference to the “principles underlying the prohibition
against patents for [natural laws].” Flook , supra , at
593. They warn us against upholding patents that claim processes
that too broadly preempt the use of a natural law. Morse , supra , at 112–120; Benson , supra , at
71–72 . And they insist that a process that focuses upon the
use of a natural law also contain other elements or a combination
of elements, sometimes referred to as an “inventive concept,”
sufficient to ensure that the patent in practice amounts to
significantly more than a patent upon the natural law itself. Flook , supra , at 594; see also Bilski , supra , at ___ (slip op., at 14) (“[T]he prohibition against
patenting abstract ideas ‘cannot be circumvented by attempting to
limit the use of the formula to a particular technological
environment’ or adding ‘insignificant postsolution activity’ ”
(quoting Diehr , supra , at 191–192)).

															We find that the process claims at issue here do
not satisfy these conditions. In particular, the steps in the
claimed processes (apart from the natural laws themselves) involve
well-understood, routine, conventional activity previously engaged
in by researchers in the field. At the same time, upholding the
patents would risk disproportionately tying up the use of the
underlying nat- ural laws, inhibiting their use in the making of
further discoveries.

															I

															A

															The patents before us concern the use of
thiopurine drugs in the treatment of autoimmune diseases, such as
Crohn’s disease and ulcerative colitis. When a patient ingests a
thiopurine compound, his body metabolizes the drug, causing
metabolites to form in his bloodstream. Because the way in which
people metabolize thiopurine compounds varies, the same dose of a
thiopurine drug affects different people differently, and it has
been difficult for doctors to determine whether for a particular
patient a given dose is too high, risking harmful side effects, or
too low, and so likely ineffective.

															At the time the discoveries embodied in the
patents were made, scientists already understood that the levels in
a patient’s blood of certain metabolites, including, in particular,
6-thioguanine and its nucleotides (6–TG) and
6-methyl-mercaptopurine (6–MMP), were correlated with the
likelihood that a particular dosage of a thiopurine drug could
cause harm or prove ineffective. See U. S. Patent
No. 6,355,623, col. 8, ll. 37–40, 2 App. 10. (“Previous
studies suggested that measurement of 6–MP metabolite levels can be
used to predict clinical efficacy and tol- erance to azathioprine
or 6–MP” (citing Cuffari, Théorêt, Latour, & Seidman,
6-Mercaptopurine Metabolism in Crohn’s Disease: Correlation with
Efficacy and Toxicity, 39 Gut 401 (1996))). But those in the field
did not know the precise correlations between metabolite levels and
likely harm or ineffectiveness. The patent claims at issue here set
forth processes embodying researchers’ findings that identified
these correlations with some precision.

															More specifically, the patents—U. S. Patent
No. 6,355,623 (’623 patent) and U. S. Patent No. 6,680,302
(’302 patent)—embody findings that concentrations in a patient’s
blood of 6–TG or of 6–MMP metabolite beyond a certain level (400
and 7000 picomoles per 8x108 red blood cells, respectively)
indicate that the dosage is likely too high for the patient, while
concentrations in the blood of 6–TG metabolite lower than a certain
level (about 230 picomoles per 8x108 red blood cells) indicate that
the dosage is likely too low to be effective.

															The patent claims seek to embody this research
in a set of processes. Like the Federal Circuit we take as typical
claim 1 of the ’623 Patent, which describes one of the claimed
processes as follows:

															“A method of optimizing therapeutic efficacy
for treatment of an immune-mediated gastrointestinal disorder,
comprising:

															“(a) administering a drug providing
6-thioguanine to a subject having said immune-mediated
gastrointestinal disorder; and

															“(b) determining the level of 6-thioguanine in
said subject having said immune-mediated gastrointestinal
disorder,

															“wherein the level of 6-thioguanine less than
about 230 pmol per 8x108 red blood cells indicates a need to
increase the amount of said drug subsequently administered to said
subject and

															“wherein the level of 6-thioguanine greater than
about 400 pmol per 8x108 red blood cells indicates a need to
decrease the amount of said drug subsequently administered to said
subject.” ’623 patent, col. 20, ll. 10–20, 2 App. 16.

															For present purposes we may assume that the
other claims in the patents do not differ significantly from
claim 1.

															B

															Respondent, Prometheus Laboratories, Inc.
(Prometheus), is the sole and exclusive licensee of the ’623 and
’302 patents. It sells diagnostic tests that embody the processes
the patents describe. For some time petitioners, Mayo Clinic
Rochester and Mayo Collaborative Services (collectively Mayo),
bought and used those tests. But in 2004 Mayo announced that it
intended to begin using and selling its own test—a test using
somewhat higher metabolite levels to determine toxicity (450 pmol
per 8x108 for 6–TG and 5700 pmol per 8x108 for 6–MMP). Prometheus
then brought this action claiming patent infringement.

															The District Court found that Mayo’s test
infringed claim 7 of the ’623 patent. App. to Pet. for Cert.
110a–115a. In interpreting the claim, the court accepted
Prometheus’ view that the toxicity-risk level numbers in Mayo’s
test and the claim were too similar to render the tests
significantly different. The number Mayo used (450) was too close
to the number the claim used (400) to matter given appropriate
margins of error. Id., at 98a–107a. The District Court also
accepted Prometheus’ view that a doctor using Mayo’s test could
violate the patent even if he did not actually alter his treatment
decision in the light of the test. In doing so, the court construed
the claim’s language, “indicates a need to decrease” (or “to
increase”), as not limited to instances in which the doctor
actually decreases (or increases) the dosage level where the test
results suggest that such an adjustment is advisable. Id., at 107a–109a; see also Brief for Respondent i (describing claimed
processes as methods “for improving . . . treatment
. . . by using individualized metabolite measurements to inform the calibration of . . . dosages of
. . . thiopurines” (emphasis added)).

															Nonetheless the District Court ultimately
granted summary judgment in Mayo’s favor. The court reasoned that
the patents effectively claim natural laws or natural
phenomena—namely the correlations between thiopurine metabolite
levels and the toxicity and efficacy of thiopurine drug dosages—and
so are not patentable. App. to Pet. for Cert. 50a–83a.

															On appeal, the Federal Circuit reversed. It
pointed out that in addition to these natural correlations, the
claimed processes specify the steps of (1) “administering a
[thiopurine] drug” to a patient and (2) “determining the [resulting
metabolite] level.” These steps, it explained, involve the
transformation of the human body or of blood taken from the body.
Thus, the patents satisfied the Circuit’s “machine or
transformation test,” which the court thought sufficient to
“confine the patent monopoly within rather definite bounds,”
thereby bringing the claims into compliance with §101. 581 F.3d
1336, 1345, 1346–1347 (2009) (internal quotation marks
omitted).

															Mayo filed a petition for certiorari. We granted
the petition, vacated the judgment, and remanded the case for
reconsideration in light of Bilski , 561 U. S. ___,
which clarified that the “machine or transformation test” is not a
definitive test of patent eligibility, but only an important and
useful clue. Id., at ___–___ (slip op., at 7–8). On remand
the Federal Circuit reaffirmed its earlier conclusion. It thought
that the “machine-or-transformation test,” understood merely as an
important and useful clue, nonetheless led to the “clear and
compelling conclusion . . . that the . . .
claims . . . do not encompass laws of nature or preempt
natural correlations.” 628 F.3d 1347, 1355 (2010). Mayo again filed
a petition for certiorari, which we granted.

															II

															Prometheus’ patents set forth laws of
nature—namely, relationships between concentrations of certain
metabolites in the blood and the likelihood that a dosage of a
thiopurine drug will prove ineffective or cause harm. Claim 1, for
example, states that if the levels of 6–TG in the blood (of
a patient who has taken a dose of a thiopurine drug) exceed about
400 pmol per 8x108 red blood cells, then the administered
dose is likely to produce toxic side effects. While it takes a
human action (the administration of a thiopurine drug) to trigger a
manifestation of this relation in a particular person, the relation
itself exists in principle apart from any human action. The
relation is a consequence of the ways in which thiopurine compounds
are metabolized by the body—entirely natural processes. And so a
patent that simply describes that relation sets forth a natural
law.

															The question before us is whether the claims do
significantly more than simply describe these natural relations. To
put the matter more precisely, do the patent claims add enough to their statements of the correlations to allow the
processes they describe to qualify as patent-eligible processes
that apply natural laws? We believe that the answer to this
question is no.

															A

															If a law of nature is not patentable, then
neither is a process reciting a law of nature, unless that process
has additional features that provide practical assurance that the
process is more than a drafting effort designed to monopolize the
law of nature itself. A patent, for example, could not simply
recite a law of nature and then add the instruction “apply the
law.” Einstein, we assume, could not have patented his famous law
by claiming a process consisting of simply telling linear
accelerator operators to refer to the law to determine how much
energy an amount of mass has produced (or vice versa). Nor could
Archimedes have secured a patent for his famous principle of
flotation by claiming a process consisting of simply telling boat
builders to refer to that principle in order to determine whether
an object will float.

															What else is there in the claims before us? The
process that each claim recites tells doctors interested in the
subject about the correlations that the researchers discovered. In
doing so, it recites an “administering” step, a “determining” step,
and a “wherein” step. These additional steps are not themselves
natural laws but neither are they sufficient to transform the
nature of the claim.

															First, the “administering” step simply refers to
the relevant audience, namely doctors who treat patients with
certain diseases with thiopurine drugs. That audience is a
pre-existing audience; doctors used thiopurine drugs to treat
patients suffering from autoimmune disorders long before anyone
asserted these claims. In any event, the “prohibition against
patenting abstract ideas ‘cannot be circumvented by attempting to
limit the use of the formula to a particular technological
environment.’ ” Bilski , supra, at ___ (slip op.,
at 14) (quoting Diehr , 450 U. S., at 191–192).

															Second, the “wherein” clauses simply tell a
doctor about the relevant natural laws, at most adding a suggestion
that he should take those laws into account when treating his
patient. That is to say, these clauses tell the relevant audience
about the laws while trusting them to use those laws appropriately
where they are relevant to their decisionmaking (rather like
Einstein telling linear accelerator operators about his basic law
and then trusting them to use it where relevant).

															Third, the “determining” step tells the doctor
to determine the level of the relevant metabolites in the blood,
through whatever process the doctor or the laboratory wishes to
use. As the patents state, methods for determining metabolite
levels were well known in the art. ’623 patent, col. 9, ll. 12–65,
2 App. 11. Indeed, scientists routinely measured metabolites as
part of their investigations into the relationships between
metabolite levels and efficacy and toxicity of thiopurine
compounds. ’623 patent, col. 8, ll. 37–40, id., at 10. Thus,
this step tells doctors to engage in well-understood, routine,
conventional activity previously engaged in by scientists who work
in the field. Purely “conventional or obvious” “[pre]-solution
activity” is normally not sufficient to transform an unpatentable
law of nature into a patent-eligible application of such a law. Flook , 437 U. S., at 590; see also Bilski , 561
U. S., at ___ (slip op., at 14) (“[T]he prohibition against
patenting abstract ideas ‘cannot be circumvented by’
. . . adding ‘insignificant post-solution
activity’ ” (quoting Diehr , supra , at
191–192)).

															Fourth, to consider the three steps as an
ordered combination adds nothing to the laws of nature that is not
already present when the steps are considered separately. See Diehr , supra , at 188 (“[A] new combination of steps
in a process may be patentable even though all the constituents of
the combination were well known and in common use before the
combination was made”). Anyone who wants to make use of these laws
must first administer a thiopurine drug and measure the resulting
metabolite concentrations, and so the combination amounts to
nothing significantly more than an instruction to doctors to apply
the applicable laws when treating their patients.

															The upshot is that the three steps simply tell
doctors to gather data from which they may draw an inference in
light of the correlations. To put the matter more suc- cinctly, the
claims inform a relevant audience about certain laws of nature; any
additional steps consist of well-understood, routine, conventional
activity already engaged in by the scientific community; and those
steps, when viewed as a whole, add nothing significant beyond the
sum of their parts taken separately. For these reasons we believe
that the steps are not sufficient to transform unpatentable natural
correlations into patentable applications of those
regularities.

															B

															1

															A more detailed consideration of the
controlling precedents reinforces our conclusion. The cases most
directly on point are Diehr and Flook, two cases in
which the Court reached opposite conclusions about the patent
eligibility of processes that embodied the equivalent of natural
laws. The Diehr process (held patent eligible) set forth a
method for molding raw, uncured rubber into various cured, molded
products. The process used a known mathematical equation, the
Arrhenius equation, to determine when (depending upon the
temperature inside the mold, the time the rubber had been in the
mold, and the thickness of the rubber) to open the press. It
consisted in effect of the steps of: (1) continuously monitoring
the temperature on the inside of the mold, (2) feeding the
resulting numbers into a computer, which would use the Arrhenius
equation to continuously recalculate the mold-opening time, and (3)
configuring the computer so that at the appropriate moment it would
signal “a device” to open the press. Diehr , 450 U. S.,
at 177–179.

															The Court pointed out that the basic
mathematical equation, like a law of nature, was not patentable.
But it found the overall process patent eligible because of the way
the additional steps of the process integrated the equation into
the process as a whole. Those steps included “installing rubber in
a press, closing the mold, constantly determining the temperature
of the mold, constantly re- calculating the appropriate cure time
through the use of the formula and a digital computer, and
automatically opening the press at the proper time.” Id., at
187. It nowhere suggested that all these steps, or at least the
combination of those steps, were in context obvious, already in
use, or purely conventional. And so the patentees did not “seek to
pre-empt the use of [the] equation,” but sought “only to foreclose
from others the use of that equation in conjunction with all of the
other steps in their claimed process.” Ibid. These other
steps apparently added to the formula something that in terms of
patent law’s objectives had significance—they transformed the
process into an inventive application of the formula.

															The process in Flook (held not
patentable) provided a method for adjusting “alarm limits” in the
catalytic conversion of hydrocarbons. Certain operating conditions
(such as temperature, pressure, and flow rates), which are
continuously monitored during the conversion process, signal
inefficiency or danger when they exceed certain “alarm limits.” The
claimed process amounted to an improved system for updating those
alarm limits through the steps of: (1) measuring the current level
of the variable, e.g., the temperature; (2) using an
apparently novel mathematical algorithm to calculate the current
alarm limits; and (3) adjusting the system to reflect the new
alarm-limit values. 437 U. S., at 585–587.

															The Court, as in Diehr, pointed out that
the basic mathematical equation, like a law of nature, was not
patentable. But it characterized the claimed process as doing
nothing other than “provid[ing] a[n unpatentable] formula for
computing an updated alarm limit.” Flook , supra , at
586. Unlike the process in Diehr , it did not “explain how
the variables used in the formula were to be selected, nor did the
[claim] contain any disclosure relating to chemical processes at
work or the means of setting off an alarm or adjusting the alarm
limit.” Diehr , supra , at 192, n. 14; see also Flook , 437 U. S., at 586. And so the other steps in the
process did not limit the claim to a particular application.
Moreover, “[t]he chemical processes involved in catalytic
conversion of hydrocarbons[,] . . . the practice of
monitoring the chemical process variables, the use of alarm limits
to trigger alarms, the notion that alarm limit values must be
recomputed and readjusted, and the use of comput- ers for
‘automatic monitoring-alarming’ ” were all “well known,” to
the point where, putting the formula to the side, there was no
“inventive concept” in the claimed application of the formula. Id., at 594. “[P]ost-solution activity” that is purely
“conventional or obvious,” the Court wrote, “can[not] transform an
unpatentable principle into a patentable process.” Id., at
589, 590.

															The claim before us presents a case for
patentability that is weaker than the (patent-eligible) claim in Diehr and no stronger than the (unpatentable) claim in Flook. Beyond picking out the relevant audience, namely
those who administer doses of thiopurine drugs, the claim sim- ply
tells doctors to: (1) measure (somehow) the current level of the
relevant metabolite, (2) use particular (unpatentable) laws of
nature (which the claim sets forth) to calculate the current
toxicity/inefficacy limits, and (3) reconsider the drug dosage in
light of the law. These instructions add nothing specific to the
laws of nature other than what is well-understood, routine,
conventional activity, previously engaged in by those in the field.
And since they are steps that must be taken in order to apply the
laws in question, the effect is simply to tell doctors to apply the
law somehow when treating their patients. The process in Diehr was not so characterized; that in Flook was
characterized in roughly this way.

															2

															Other cases offer further support for the view
that simply appending conventional steps, specified at a high level
of generality, to laws of nature, natural phenomena, and abstract
ideas cannot make those laws, phenomena, and ideas patentable. This
Court has previously discussed in detail an English case, Neilson, which involved a patent claim that posed a legal
problem very similar to the problem now before us. The patent
applicant there asserted a claim

															“for the improved application of air to
produce heat in fires, forges, and furnaces, where a blowing
apparatus is required. [The invention] was to be applied as
follows: The blast or current of air produced by the blowing
apparatus was to be passed from it into an air-vessel or receptacle
made sufficiently strong to endure the blast; and through or from
that vessel or receptacle by means of a tube, pipe, or aperture
into the fire, the receptacle be kept artificially heated to a
considerable temperature by heat externally applied.” Morse ,
15 How., at 114–115.

															The English court concluded that the claimed
process did more than simply instruct users to use the principle
that hot air promotes ignition better than cold air, since it
explained how the principle could be implemented in an inventive
way. Baron Parke wrote (for the court):

															“It is very difficult to distinguish
[Neilson’s claim] from the specification of a patent for a
principle, and this at first created in the minds of some of the
court much difficulty; but after full consideration, we think that
the plaintiff does not merely claim a principle, but a machine
embodying a principle, and a very valuable one. We think the case
must be considered as if the principle being well known, the
plaintiff had first invented a mode of applying it by a mechanical
apparatus to furnaces; and his invention then consists in this—by
interposing a receptacle for heated air between the blowing
apparatus and the furnace. In this receptacle he directs the air to
be heated by the application of heat externally to the receptacle,
and thus he accomplishes the object of applying the blast, which
was before of cold air, in a heated state to the furnace.” Neilson v. Harford , Webster’s Patent Cases, at
371.

															Thus, the claimed process included not only a
law of nature but also several unconventional steps (such as
inserting the receptacle, applying heat to the receptacle
externally, and blowing the air into the furnace) that confined the
claims to a particular, useful application of the principle.

															In Bilski the Court considered claims
covering a process for hedging risks of price changes by, for
example, contracting to purchase commodities from sellers at a
fixed price, reflecting the desire of sellers to hedge against a
drop in prices, while selling commodities to consumers at a fixed
price, reflecting the desire of consumers to hedge against a price
increase. One claim described the process; another reduced the
process to a mathematical formula. 561 U. S., at ___–___ (slip
op., at 2–3). The Court held that the described “concept of
hedging” was “an unpatentable abstract idea.” Id., at ___
(slip op., at 15). The fact that some of the claims limited hedging
to use in commodities and energy markets and specified that
“well-known random analysis techniques [could be used] to help
establish some of the inputs into the equation” did not undermine
this conclusion, for “ Flook established that limiting an
abstract idea to one field of use or adding token postsolution
components did not make the concept patentable.” Id., at
___, ___ (slip op., at 16, 15).

															Finally, in Benson the Court considered
the patentability of a mathematical process for converting
binary-coded decimal numerals into pure binary numbers on a general
purpose digital computer. The claims “purported to cover any use of
the claimed method in a general-purpose digital computer of any
type.” 409 U. S., at 64, 65. The Court recognized that
“ ‘a novel and useful structure created with the aid of
knowledge of scientific truth’ ” might be patentable. Id., at 67 (quoting Mackay Radio , 306 U. S., at
94). But it held that simply implementing a mathematical principle
on a physical machine, namely a computer, was not a patentable
application of that principle. For the mathematical formula had “no
substantial practical application except in connection with a
digital computer.” Benson , supra , at 71. Hence the
claim (like the claims before us) was overly broad; it did not
differ significantly from a claim that just said “apply the
algorithm.”

															3

															The Court has repeatedly emphasized this last
mentioned concern, a concern that patent law not inhibit further
discovery by improperly tying up the future use of laws of nature.
Thus, in Morse the Court set aside as unpatentable Samuel
Morse’s general claim for “ ‘the use of the motive power of
the electric or galvanic current . . . however developed,
for making or printing intelligible characters, letters, or signs,
at any distances,’ ” 15 How., at 86. The Court explained:

															“For aught that we now know some future
inventor, in the onward march of science, may discover a mode of
writing or printing at a distance by means of the electric or
galvanic current, without using any part of the process or
combination set forth in the plaintiff’s specification. His
invention may be less complicated—less liable to get out of
order—less expensive in construction, and in its operation. But yet
if it is covered by this patent the inventor could not use it, nor
the public have the benefit of it without the permission of this
patentee.” Id. , at 113.

															Similarly, in Benson the Court said that
the claims before it were “so abstract and sweeping as to cover
both known and unknown uses of the [mathematical formula].” 409
U. S., at 67, 68. In Bilski the Court pointed out that
to allow “petitioners to patent risk hedging would pre-empt use of
this approach in all fields.” 561 U. S., at ___ (slip op., at
15). And in Flook the Court expressed concern that the
claimed process was simply “a formula for computing an updated
alarm limit,” which might “cover a broad range of potential uses.”
437 U. S., at 586.

															These statements reflect the fact that, even
though rewarding with patents those who discover new laws of nature
and the like might well encourage their discovery, those laws and
principles, considered generally, are “the basic tools of
scientific and technological work.” Benson , supra , at
67. And so there is a danger that the grant of patents that tie up
their use will inhibit future innovation premised upon them, a
danger that becomes acute when a patented process amounts to no
more than an instruction to “apply the natural law,” or otherwise
forecloses more future invention than the underlying discovery
could reasonably justify. See generally Lemley, Risch, Sichelman,
& Wagner, Life After Bilski, 63 Stan. L. Rev. 1315
(2011) (hereinafter Lemley) (arguing that §101 reflects this kind
of concern); see also C. Bohannan & H. Hovenkamp, Creation
without Restraint: Promoting Liberty and Rivalry in Innovation 112
(2012) (“One problem with [process] patents is that the more
abstractly their claims are stated, the more difficult it is to
determine precisely what they cover. They risk being applied to a
wide range of situations that were not anticipated by the
patentee”); W. Landes & R. Posner, The Economic Structure of
Intellectual Property Law 305–306 (2003) (The exclusion from patent
law of basic truths reflects “both . . . the enormous
potential for rent seeking that would be created if property rights
could be obtained in them and . . . the enormous
transaction costs that would be imposed on would-be users [of those
truths]”).

															The laws of nature at issue here are narrow laws
that may have limited applications, but the patent claims that
embody them nonetheless implicate this concern. They tell a
treating doctor to measure metabolite levels and to consider the
resulting measurements in light of the statistical relationships
they describe. In doing so, they tie up the doctor’s subsequent
treatment decision whether that treatment does, or does not, change
in light of the inference he has drawn using the correlations. And
they threaten to inhibit the development of more refined treatment
recommendations (like that embodied in Mayo’s test), that combine
Prometheus’ correlations with later discovered features of
metabolites, human physiology or individual patient
characteristics. The “determining” step too is set forth in highly
general language covering all processes that make use of the
correlations after measuring metabolites, including later
discovered processes that measure metabolite levels in new
ways.

															We need not, and do not, now decide whether were
the steps at issue here less conventional, these features of the
claims would prove sufficient to invalidate them. For here, as we
have said, the steps add nothing of significance to the natural
laws themselves. Unlike, say, a typical patent on a new drug or a
new way of using an existing drug, the patent claims do not confine
their reach to particular applications of those laws. The presence
here of the basic underlying concern that these patents tie up too
much future use of laws of nature simply reinforces our conclusion
that the processes described in the patents are not patent
eligible, while eliminating any temptation to depart from case law
precedent.

															III

															We have considered several further arguments
in support of Prometheus’ position. But they do not lead us to
adopt a different conclusion. First, the Federal Circuit, in
upholding the patent eligibility of the claims before us, relied on
this Court’s determination that “[t]ransformation and reduction of
an article ‘to a different state or thing’ is the clue to
the patentability of a process claim that does not include
particular machines.” Benson , supra , at 70–71
(emphasis added); see also Bilski , supra , at ___
(slip op., at 6–7); Diehr , 450 U. S., at 184; Flook , supra , at 588, n. 9; Cochrane v. Deener , 94 U.S.
780 , 788 (1877). It reasoned that the claimed processes are
therefore patent eligible, since they involve transforming the
human body by administering a thiopurine drug and transforming the
blood by analyzing it to determine metabolite levels. 628
F. 3d, at 1356–1357.

															The first of these transformations, however, is
irrelevant. As we have pointed out, the “administering” step simply
helps to pick out the group of individuals who are likely
interested in applying the law of nature. See supra, at
9 . And the second step could be satisfied without
transforming the blood, should science develop a totally different
system for determining metabolite levels that did not involve such
a transformation. See supra, at 18. Regardless, in stating
that the “machine-or-transformation” test is an “ important and
useful clue” to patentability, we have neither said nor implied
that the test trumps the “law of nature” exclusion. Bilski , supra , at ___ (slip op., at 6–7) (emphasis added). That
being so, the test fails here.

															Second, Prometheus argues that, because the
particular laws of nature that its patent claims embody are narrow
and specific, the patents should be upheld. Thus, it encourages us
to draw distinctions among laws of nature based on whether or not
they will interfere significantly with innovation in other fields
now or in the future. Brief for Respondent 42–46; see also Lemley
1342–1344 (making similar argument).

															But the underlying functional concern here is a relative one: how much future innovation is foreclosed
relative to the contribution of the inventor. See supra, at
17. A patent upon a narrow law of nature may not inhibit future
research as seriously as would a patent upon Einstein’s law of
relativity, but the creative value of the discovery is also
considerably smaller. And, as we have previously pointed out, even
a narrow law of nature (such as the one before us) can inhibit
future research. See s upra , at 17–18.

															In any event, our cases have not distinguished
among different laws of nature according to whether or not the
principles they embody are sufficiently narrow. See, e.g., Flook , 437 U.S.
584 (holding narrow mathematical formula unpatentable). And
this is understandable. Courts and judges are not institutionally
well suited to making the kinds of judgments needed to distinguish
among differ- ent laws of nature. And so the cases have endorsed a
bright-line prohibition against patenting laws of nature,
mathematical formulas and the like, which serves as a somewhat more
easily administered proxy for the underlying “building-block”
concern.

															Third, the Government argues that virtually any
step beyond a statement of a law of nature itself should transform
an unpatentable law of nature into a potentially patentable
application sufficient to satisfy §101’s demands. Brief for United
States as Amicus Curiae . The Government does not necessarily
believe that claims that (like the claims before us) extend just
minimally beyond a law of nature should receive patents. But in its
view, other statutory provisions—those that insist that a claimed
process be novel, 35 U. S. C. §102, that it not be
“obvious in light of prior art,” §103, and that it be “full[y],
clear[ly], concise[ly], and exact[ly]” described, §112—can perform
this screening function. In particular, it argues that these claims
likely fail for lack of novelty under §102.

															This approach, however, would make the “law of
nature” exception to §101 patentability a dead letter. The approach
is therefore not consistent with prior law. The relevant cases rest
their holdings upon section 101, not later sections. Bilski ,
561 U. S. ___; Diehr , supra ; Flook , supra ; Benson , 409 U.S.
63 . See also H. R. Rep. No. 1923, 82d Cong., 2d
Sess., 6 (1952) (“A person may have ‘invented’ a machine or a
manufacture, which may include anything under the sun that is made
by man, but it is not necessarily patentable under section
101 unless the conditions of the title are fulfilled” (emphasis
added)).

															We recognize that, in evaluating the
significance of additional steps, the §101 patent-eligibility
inquiry and, say, the §102 novelty inquiry might sometimes overlap.
But that need not always be so. And to shift the patent-eligibility
inquiry entirely to these later sections risks creating
significantly greater legal uncertainty, while assuming that those
sections can do work that they are not equipped to do.

															What role would laws of nature, including newly
discovered (and “novel”) laws of nature, play in the Government’s
suggested “novelty” inquiry? Intuitively, one would suppose that a
newly discovered law of nature is novel. The Government, however,
suggests in effect that the novelty of a component law of nature
may be disregarded when evaluating the novelty of the whole. See
Brief for United States as Amicus Curiae 27. But §§102 and
103 say nothing about treating laws of nature as if they were part
of the prior art when applying those sections. Cf. Diehr, 450 U. S., at 188 (patent claims “must be considered as a
whole”). And studiously ignoring all laws of nature when
evaluating a patent application under §§102 and 103 would “make all
inventions unpatentable because all inventions can be reduced to
underlying principles of nature which, once known, make their
implementation obvious.” Id. , at 189, n. 12. See also
Eisenberg, Wisdom of the Ages or Dead-Hand Control? Patentable
Subject Matter for Diagnostic Methods After In re
Bilski, 3 Case W. Res. J. L. Tech. & Internet 1, ___
(forthcoming, 2012) (manuscript, at 85–86, online at
http://www.patentlyo.com/
files/eisenberg.wisdomordeadhand.patentlyo.pdf (as vis- ited Mar.
16, 2012, and available in Clerk of Court’s case file)); 2 D.
Chisum, Patents §5.03[3] (2005).

															Section 112 requires only a “written description
of the invention . . . in such full, clear, concise, and
exact terms as to enable any person skilled in the art
. . . to make and use the same.” It does not focus on the
possibility that a law of nature (or its equivalent) that meets
these conditions will nonetheless create the kind of risk that
underlies the law of nature exception, namely the risk that a
patent on the law would significantly impede future in- novation.
See Lemley 1329–1332 (outlining differences between §§101 and 112);
Eisenberg, supra, at ___ (manuscript, at 92–96) (similar).
Compare Risch, Everything is Patentable, 75 Tenn. L. Rev. 591
(2008) (defending a minimalist approach to §101) with Lemley
(reflecting Risch’s change of mind).

															These considerations lead us to decline the
Government’s invitation to substitute §§102, 103, and 112 inquiries
for the better established inquiry under §101.

															Fourth, Prometheus, supported by several amici, argues that a principle of law denying patent
coverage here will interfere significantly with the ability of
medical researchers to make valuable discoveries, particularly in
the area of diagnostic research. That research, which includes
research leading to the discovery of laws of nature, is expensive;
it “ha[s] made the United States the world leader in this field”;
and it requires protection. Brief for Respondent 52.

															Other medical experts, however, argue strongly
against a legal rule that would make the present claims patent
eligible, invoking policy considerations that point in the opposite
direction. The American Medical Association, the American College
of Medical Genetics, the American Hospital Association, the
American Society of Human Genetics, the Association of American
Medical Colleges, the Association for Molecular Pathology, and
other medical organizations tell us that if “claims to exclusive
rights over the body’s natural responses to illness and medical
treatment are permitted to stand, the result will be a vast thicket
of exclusive rights over the use of critical scientific data that
must remain widely available if physicians are to provide sound
medical care.” Brief for American College of Medical Genetics
et al. as Amici Curiae 7; see also App. to Brief for
Association Internationale pour la Protection de la Propriété
Intellectuelle et al. as Amici Curiae A6, A16 (methods
of medical treatment are not patentable in most of Western
Europe).

															We do not find this kind of difference of
opinion surprising. Patent protection is, after all, a two-edged
sword. On the one hand, the promise of exclusive rights provides
monetary incentives that lead to creation, invention, and
discovery. On the other hand, that very exclusivity can impede the
flow of information that might permit, indeed spur, invention, by,
for example, raising the price of using the patented ideas once
created, requiring potential users to conduct costly and
time-consuming searches of existing patents and pending patent
applications, and requiring the negotiation of complex licensing
arrangements. At the same time, patent law’s general rules must
govern inventive activity in many different fields of human
endeavor, with the result that the practical effects of rules that
reflect a general effort to balance these considerations may differ
from one field to another. See Bohannan & Hovenkamp, Creation
without Restraint, at 98–100.

															In consequence, we must hesitate before
departing from established general legal rules lest a new
protective rule that seems to suit the needs of one field produce
unforeseen results in another. And we must recognize the role of
Congress in crafting more finely tailored rules where necessary.
Cf. 35 U. S. C. §§161–164 (special rules for plant
patents). We need not determine here whether, from a policy
perspective, increased protection for discoveries of diagnostic
laws of nature is desirable.

															*  *  *

															For these reasons, we conclude that the patent
claims at issue here effectively claim the underlying laws of
nature themselves. The claims are consequently invalid. And the
Federal Circuit’s judgment is reversed . It is so ordered.