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When Does Replacing an Expendable Part Infringe a Patent?

When Does Replacing an Expendable Part Infringe a Patent?

Published: 06.06.13 at 12:03

Necessity is the mother of invention.  In an uncertain economic climate, it is essential to get the most out of the products that we use and potentially reuse.  With a push to reduce waste and to increase recycling, many people are inventing cost-effective ways to repair items.  It often may be more practical and economical to replace a component part of an item than to purchase a wholly new item.

Most inventions these days are protected by patents.  So when does replacing an expendable part infringe a patent? This recent case of Schütz v Werit provides a ruling on when recycling, repairing and reusing will constitute the act of "making" a patented product and thereby amount to infringement

Schütz v Werit : The Supreme Court decision

The case involved the replacement of a component part of an intermediate bulk container (IBC).  An IBC is used for the storage and transfer of large quantities of liquid. A typical IBC consists of three principal components: the outer metal 'cage', an inner plastic container referred to as a 'bottle,' and a pallet base.  IBCs commonly transport chemicals and it is customary that the bottles are replaced, often after just one journey, so as to avoid future contamination.  The sturdy outer metal cage has a much longer life expectancy (around five to six times that of the bottle) and it is common practice in the industry to refit the cages with new bottles.

In this instance, Schütz was the exclusive licensee in the UK for the company holding the patent in question.  Werit was a supplier of bottles that were sold to third parties who recondition used IBCs.  The third parties inserted "Werit" bottles into used Schütz cages, an act known as "cross-bottling."

Schütz protested that this cross-bottling constituted the "making" of the patented IBC and infringed the patent right.  Under the Patents Act 1977, section 60(1)(a) makes it an infringement for a person to "make" the patented product.  Schütz claimed that Werit was involved in exactly such acts of "making".  Therefore, the main question for the court to consider was whether or not Werit made the article described by inserting its own bottle into the Schütz cage.

In deciding this question, the Supreme Court applied a factor-based approach, identifying all relevant factors and weighing up their cumulative effect.  The factors considered crucial to the case included:

  • The bottle had a significantly lower life expectancy than the cage and replacement was expected;
  • The bottle did not include any aspect of the inventive concept;
  • The bottle was a free-standing article and a "subsidiary" part of the overall product; and
  • The recycler did no more than replace the bottle; no improvement or manufacturing occurred.

In a unanimous decision, the five Supreme Court Justices held that there had been no infringement.  There was no "making" of the patented article by replacing the expendable bottle.  Werit's supply of the bottles did not amount to patent infringement.

Case commentary

While the 1977 Act makes it clear that the "making" of the patented object will constitute infringement, it is less certain how the courts will apply this case going forward.  In his judgment, Lord Neuberger stated that what constitutes "making" is a matter of fact and degree.  Clearly, each case will turn on its facts. 

In this case, it was of particular importance that the replaceable component had a much shorter lifespan than the cage.  The patent itself acknowledged that the bottle was exchangeable and it was envisioned that the bottle would be replaced.

The Supreme Court also identified that the inventiveness of the patent lay in the metal cage and the unique welding of its joints.  While integral to the overall composition of the IBC, the bottle was not integral to the inventiveness of the patent.

Prior to this case, the House of Lords delivered a different decision when faced with a similar question in United Wire Ltd v Screen Repair and Service, with the defendant found liable for patent infringement in this instance.  In United Wire, the relevant factors pertaining to the replacement component included:

  • The component was integral to the retained part;
  • The inventive concept of the patent resided in the replacement component; and
  • The component required significant additional improvement work (or "manufacturing").

Not only were the decisions from these two cases different, so too were the key factors considered.  A comparison of the distinguishable factors from these cases provides insight as to the sort of factors likely to influence future court decisions where the question of "making" arises.  While the physical alteration of the replaceable component in United Way amounted to "making", Schütz v Werit makes it clear that mere replacement or repair to a component part of the patented article will not necessarily be an act of "making".

Going forward

The factor-based approach and decision from Schütz v Werit presents the English courts with a domestic case law precedent more in line with similar case law from the German Supreme Court, providing a more harmonised approach in this area of Intellectual Property law with that of other EU member states.  Notably, the decision from Schütz v Werit reminds us of the critical need to balance the protection of patent rights (and the patentee's monopoly) with the aims of EU competition law.  The courts will be prepared to prevent the use of an IP right when this right is being used as a means for restricting trade or competition. 

A timely response to Schütz v Werit may reside in the recent spate of lawsuits launched across the EU by Nestec in relation to rival manufacture of replacement coffee capsules for its Nespresso machines.  While many national courts, including the English High Court, have reached decisions in line with Schütz v Werit, appeal proceedings are still pending at the European Patent Office.  Thus, it remains to be seen what the EU's main patent authority will ultimately "make" of these facts.

This article was written by Amy Lovell-Odone and Maggie Walters, students at the University of Law.

Photograph (some rights reserved) by Bulent Yusuf

 

Please note that this article discusses the legal position in the UK at the time of publication. It provides general information only but is not to be regarded as legal advice. You must take advice from a specialist lawyer in relation to your specific circumstances. Further, you should seek additional legal advice when dealing with parties based in other parts of the world or works originating from other parts of the world as the legal position may vary.

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