First Sale

Used for at least four different purposes:

(a) as a term in license agreements, usually defined as the first sale to an unrelated party, to provide a basis for calculating royalty rates;

(b) exhaustion-on-first sale refers to exhaustion of rights, which typically occurs on the first sale by the holder of an intellectual property right or a licensee;

(c) first sale of a newly invented product or product made by an invented method (or indeed the first offer for sale) can preclude applying for a patent, a rule known as the on-sale-bar; or

(d) demonstrating first commercial use or first sale may be important in disputes over entitlement to a trademark in some jurisdictions such as the United States and Europe.

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