When Does Repairing a Patented Product Constitute Infringement by ‘Making’?

This article was included in our Spring/Summer 2011 edition of Inside IP magazine.

The UK Court of Appeal recently handed down a judgement in Schütz v Werit deciding that repair of the patented product constituted ‘making’ that product and was thereby infringement of the patent under UK law.  This decision has potential to seriously impact spare part/repair industries throughout the UK.

Background

The case relates to a patent (EP 0734967) for IBCs (‘Intermediate Bulk Containers’) which are large (about 1000 litres) cubic containers for liquids comprising a bottle surrounded by a reinforcing cage.  The patent in question claims an IBC but is primarily directed to features of the cage.  An image of the IBC from the patent in question is shown below:

IBCs are well known industrial containers, and the life-span of the outer cage is generally longer than that of the bottle within.  Accordingly, IBCs can be ‘reconditioned’ by ‘rebottling’ – where the bottle is replaced with another from the same manufacturer – or ‘cross-bottling’– where the bottle is replaced by a bottle from a different source.

The dispute originally arose as Schütz, the exclusive licensee of the patent in question and manufacturer of IBCs, objected to Werit’s supply of bottles to a reconditioning company called ‘Delta’ who bought discarded Schütz IBCs, replaced the old bottle with a new Werit bottle and sold the IBC on in competition with Schütz.

In the court of first instance, Schütz sued Werit for patent infringement and Werit counter-claimed that the patent was invalid.  The court found that the patent was valid but not infringed, reasoning that “the inventive concept…is wholly embodied in the Schütz cage” and so the process of replacing the original bottle with a Werit bottle did not affect the cage and so did not amount to ‘making’ the patented product.

Court of Appeal Decision

On appeal, the court overturned the first instance decision, finding that the cross-bottling process did indeed constitute ‘making’ of the patented product and was thereby infringement of the patent.  Furthermore, the court rejected the argument followed in the court of first instance that replacement of the bottle did not relate to the ‘whole inventive concept’ of the patent (i.e. the cage) and so was not ‘making’ the patented product.  The Court of Appeal found that the claimed product (i.e. the IBC) “ceased to exist” when the bottle was removed, leaving the cage as “merely an important component from which a new IBC could be made”.  When Delta subsequently fitted a new Werit bottle to the Schütz cage, it constituted ‘making’ a new IBC which fell within the scope of the patent.

Effect of the Decision

This judgement has the potential to render the process of repairing a patented product as constituting re-‘making’ that product and thereby being an infringement under UK law, irrespective of whether the replacement part is central to the main ‘inventive concept’ of the patent.  In the present case, the claimed product was a very simple device and so removal of one component part (the bottle) had the effect of the claimed product no longer existing.  However, in many industries, removal of a component to be repaired/replaced may not realistically be argued as rendering the overall product as no longer existing.  Nevertheless, it is not difficult to imagine how this judgment could impact many UK companies involved in the repair and recycling industry and it will now remain to be seen whether similar such actions are brought by other original equipment manufacturers against those who recondition or refurbish their products for resale onto the market.

Resources:

The full decision can be found at http://www.bailii.org/ew/cases/EWCA/Civ/2011/303.html

Alex Brown 24 May 2011

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