CHANTILLY, Va. – In a decision closely watched by remanufacturers in the United Kingdom and Europe, the Supreme Court of the U.K. affirmed the right of companies to remanufacture patented products originally made by another company. The Automotive Parts Remanufacturer’s Association (APRA) had previously filed an amicus curiae letter in the case, supporting the remanufacturer’s appeal. In its letter, APRA advised the court of the desirability of remanufacturing products and the favorable treatment that has been given to the remanufacturing of patented products in the United States.
The case, Werit (U.K.) Limited v. Schutz (U.K.) Limited, involved the reconditioning of intermediate bulk containers. These containers are used to transport liquids. They consist of a metal cage on a wooden pallet in which a large plastic bottle is fitted. The bottle must fit inside the cage as snugly as possible to avoid damage during transport. Often the bottle cannot be reused because it is damaged or contains residues of a toxic liquid. The metal cage has a much longer life. Schutz was the licensee of a company that had patented a new bulk container in which the bottle fit more snugly into the metal cage and therefore was less prone to damage. Werit made new bottles, which were then sold to re-conditioners who used them to replace unusable bottles in the patented bulk containers originally produced by Schutz. At trial, the court said that using Werit’s bottles did not infringe the patent, but the appellate court disagreed and found that infringement had occurred. Werit took the case to the Supreme Court, which agreed to hear it.
The Supreme Court based its decision on the issue of whether Werit was “making” the patented product. While the court recognized an owner’s right to repair, it was unwilling to base its decision solely on determining whether what was done by Werit and the re-conditioners was repair. Instead, it felt that it had to decide whether in replacing a part of a patented article “making” occurred. In its holding, the court ruled that each case had to be decided on its own facts and that “… it is a matter of degree, to be assessed in each case, whether replacing a worn or damaged part of patented article amounts to ‘making’ the patented article.”
While each case is to be fact-driven, the court did enumerate certain guidelines and factors to be considered in making that decision. First, it found that replacement of a “damaged essential element” of a product can constitute repair rather than making the product. Next, it believed that replacement of a part which, though essential, was clearly a subsidiary part of the patented product did not involve “making.” Another factor it considered was whether a part was physically easy to replace and in practice relatively perishable. Such factors would favor a conclusion that its replacement did not constitute “making.” The court also looked at whether the inventive concept resided in the part that was being replaced, i.e., if the part the component where the patented improvements were incorporated. Finally, it felt that if the used part had no value (was not a marketable core), then that would favor the idea that its renewal would be “making” bulk containers. After reviewing all those factors, the court decided that what Werit and the re-conditioners were not “making” new bulk containers.
The court’s decision follows similar logic used by U.S. courts to uphold the right to remanufacture. Starting with the U.S. Supreme Court, those courts have focused on whether the work done by the alleged patent infringer is “re-construction” of the patented product or merely “permissible repair.” The U.S. courts also look to the facts of each case. U.S. courts also have made it clear that even replacement of a key or dominant element of a patented product does not constitute illegal reconstruction of that product.
According to APRA General Counsel Michael Conlon, “In Werit, the Supreme Court of the United Kingdom has recognized and confirmed the previous decisions of U.S. and European community courts, upholding the right to remanufacture patented products. These decisions are vitally important to the continued remanufacturing and reuse of motor vehicle parts and other products.”
