Shasta wins exhaustion argument at CAFC; Quanta discussed

A patent exhaustion defense doe defendant-appellant succeeded in LifeScan v. Shasta: Because we agree that Shasta has established
that it has a patent exhaustion defense, we reverse.

The CAFC noted:


Before Quanta, the Supreme Court had repeatedly
held, in addressing device patents, that the sale of a
patented device exhausted the patent-
holder’s right to exclude, and that an infringement suit would not lie with
respect to the subsequent sale or use of the device. In Adams v. Burke, for example, the accused infringer argued that the sale of patented coffin lids exhausted the patentee’s rights in the lids throughout the United States
even though the assignee from whom the accused infring-
er purchased the lids was only authorized to sell the lids
in a limited geographical area. 84 U.S. (17 Wall.) 453 (1873).



AND


Contrary to the dissent, a biosensor with multiple
electrodes was known in the prior art, as LifeScan’s
own expert admitted. JA 1459. (...)

There is also no dispute that in LifeScan’s blood glucose testing system, it is the meter, not the strips, which performs the “measuring,” “comparing,” and “giving an
indication of an error” steps.