Monday, 15 November 2010

Manufacture or repair?

Authors: Brian Whitehead and Richard Kempner (Kempner & Partners LLP)

Citation: Journal of Intellectual Property Law & Practice (2010) doi: 0.1093/jiplp/jpq167, first published online: 9 November 2010

Schütz (UK) Limited v Werit UK Limited, Protechna SA [2010] EWHC 660 (Pat), 31 March 2010

The Patents Court of England and Wales has confirmed that there is no free-standing right to repair in patent law, and has provided useful guidance for assessing whether repairing or reconditioning a patented product amounts to patent infringement.

Legal context

By s. 60(1)(a) of the Patents Act 1977 a product patent is infringed by making, disposing or offering to dispose of, using or importing the protected product, or keeping it for disposal or otherwise, without the consent of the patentee. This is a wide range of activities, but the concepts of repairing or reconditioning products are not specifically addressed in the Patents Act. Accordingly it is necessary to decide whether these acts constitute ‘making’ a patented product.

Facts

This case relates to a type of container, used for transportation of liquids, known as an intermediate bulk container (IBC). This consists of an outer protective cage and a removable plastic inner bottle in which the liquid is held. In some IBCs, the bottle can be replaced when it becomes unusable. IBC manufacturers sell replacement bottles, but there is also a market for replacement bottles produced by manufacturers other than the manufacturer of the original IBC. Delta reconditioned used IBCs by removing the old bottle, repairing the cage as appropriate, and fitting a new bottle. Delta purchased its replacement bottles from Werit, the first defendant. The reconditioned IBCs were then sold in competition with the original manufacturers' products.

Schütz, the owner of European Patents (UK) 0 370 307 (‘307’) and 0 734 967 (‘967’) relating to IBCs, sued Werit for secondary infringement under s. 60(2) of the Patents Act 1977 and (in separate proceedings) Delta for primary infringement.

Various issues arose in the claim, including the validity of the patents, and whether Schütz's cages fell within the scope of the patents. The latter issue was relevant because repairing a cage could not constitute infringement if the cage itself did not fall within the scope of the patents. Both patents were upheld as valid, although it was held that only the 967 patent was potentially infringed by use of Schütz's cages to produce reconditioned IBCs—Schütz's cages did not fall within the scope of the 307 patent. Of particular interest is the judge's analysis of whether Delta's activities constituted patent infringement: did Delta's activities constitute ‘making’ a product which fell within the claims of either patent?

Analysis

The leading case on whether an activity constitutes ‘making’ a patent product is United Wire Ltd v Screen Services (Scotland) [2001] RPC 24. That case concerned United Wire's patents claiming heavy duty screen assemblies for filtering well drilling mud. The products consisted of two main parts: a filter mesh and a supporting frame. Screen Services reconditioned worn out screen assemblies, originally manufactured by United Wire, by repairing the frames and fitting brand new mesh. Both patents contained claims directed at both the frame and mesh.

Both the Court of Appeal and the House of Lords rejected Screen Services' defence based on an implied right to repair. Lord Hoffmann explained that, for the purposes of patent law, the notions of ‘repairing’ and ‘making’ are mutually exclusive. Any right to repair is therefore nothing more than a residual right, forming part of the right to do whatever does not amount to making the product. The correct test was ‘whether, having regard to the nature of the patented article, the defendant could be said to have made it’. Lord Bingham explained this further, holding that ‘In any action brought by a patentee alleging infringement the crucial underlying question must always be whether what the defendant is shown to have done has deprived the patentee of the full rights to which his patent entitled him’.

The judge in Schütz v Werit, Floyd J, interpreted United Wire as meaning that ‘the correct approach is to ask whether, when the part in question is removed, what is left embodies the whole of the inventive concept of the claim’. Floyd J noted that, if this test was applied to the facts of United Wire, the same conclusion would be reached, because the invention in that case was a combination of both the frame and the mesh.

Applying this approach to the facts, Floyd J concluded that replacing the inner container of a Schütz IBC with a Werit bottle does not amount to making a product which fell within the scope of either patent. This was on the ground that, unlike the situation in United Wire, the inventive concept of the patents resided entirely in the cage, rather than the bottle. After removal of the bottle, the cage still embodies the whole of the inventive concept, and accordingly the addition of a new bottle to an empty cage did not fall within the scope of the patents' claims. The patents were therefore not infringed.

In order to succeed against Werit, Schütz needed to establish that Delta's acts constituted patent infringement. The action against Delta was stayed pending the outcome of this action. Presumably, given the outcome, the patent infringement claims in the action against Delta will now be discontinued, unless this decision is successfully appealed.

Practical significance

There is no free-standing right to repair in patent law. Instead, the issue of whether repairing/reconditioning a patented product amounts to patent infringement must be assessed by considering the particular activities of the repairer in the context of the patent. In most cases, the answer will be straightforward, although in some instances it may be difficult to assess whether the inventive concept is embodied only in the retained part or is a combination of the retained and replaced/repaired parts.

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