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UK Supreme Court Upholds The Right To Remanufacture

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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.

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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.”

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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.

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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.”

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