Spare parts, repairs and patented products: AIPPI has a chat

The original replacement part? Both
legal teams carried a spare barrister 
(Tom and Lindsay) in case the main one 
yesterday got broken or worn out ...

Yesterday evening the AIPPI' s UK cell held a Rapid Response seminar on the extent to which replacing an expendable part of a patented product such as a machine should be regarded as a patent infringement, this being inspired by the need to understand properly the decision in the UK's Supreme Court last week in  Schütz v Werit [noted by the IPKat here and analysed in depth by a couple of Hogan Lovellies on PatLit here]. The IPKat is now pleased to publish this short note on the seminar from Freshfields Bruckhaus Deringer trainee Sebastian Wilkin. Thanks, Sebastian, for writing this up for us! This is what he tells us:

"Last week the Supreme Court delivered judgment in Schütz v Werit, and last night AIPPI UK pulled a powerful panel and a distinguished audience together at Freshfields to debate it.  Mr Justice Floyd presided over proceedings -– and he also presided over Schütz v Werit at first instance. Daniel Brooks of Hogan Lovells, Werit’s solicitors, introduced the case.   He was joined on the panel debate by Richard Meade QC and Lindsay Lane (both counsel for Schütz), Thomas Mitcheson (counsel for Werit), Michael Silverleaf QC (counsel for the respondents in the repair-a-patented-product case of United Wire v Screen Repair), and Bobby Mukherjee (President of the IP Federation, and BAe).

As the IPKat reported here, Schütz alleged that replacing bottles in its patented IBC's amounted to infringing the patent by an act of 'making' under s.60(1) of the Patents Act 1977. At first instance, Floyd J held that the inventive concept lay in other parts of the product than the bottle and so replacing a bottle could not be 'making'.  Although this decision was reversed by the Court of Appeal, the Supreme Court agreed with Floyd J’s conclusion. Lord Neuberger, delivering the judgment of the Court, stated that whether a party was 'making' something was a "a matter of fact and degree".  He identified a number of factors to help decide whether reconditioning 'made' the IBC, of which the inventive concept was an important part but not the only consideration.

Werit supplied bottles to customers, but it was the customers that fitted them to the IBCs.  Werit had conceded that it would be infringing if the customers were infringing.  Mr Justice Floyd asked the panel to comment on the effects of that concession, which avoided any discussion of whether the bottles were "means relating to an essential element of the invention".  The conclusion from the discussion that followed was that this was a pragmatic and commercial decision for a party in Werit’s position: it could not really benefit by avoiding a finding of infringement if its customers were infringing.

The Supreme Court imposed a multifactorial test.  Tom Mitcheson commented that, in the light of this decision, it would probably be necessary to consult your lawyer before answering the question: does what I am doing constitute “making”? 

Lord Hoffmann: not
so easy to replace ...

The panel discussed the influence of the Supreme Court's 'factor-based' approach from its cited 'trilogy' of decisions from the German Bundesgerichtshof (BGH).  Richard Meade QC commented that the citation was not necessarily a sign of convergence.  He noted in particular that in Paletenbehalter II, Schütz v Mauser (Pallet Container II) Case X ZR 97/11, the BGH remitted the case for a determination as to what proportion of used IBCs was returned to Schütz or reconditioners for no consideration -– effectively, a statement of end-user conduct or opinion.

Michael Silverleaf QC commented that it would be interesting to know whether United Wire would be decided the same way in the light of Schütz. He was answered in the affirmative by an intervention from the floor from the author of the leading opinion in that case, Lord Hoffmann, who observed that the Schütz finding was that there was nothing inventive in the bottle being replaced, while the components replaced in United Wire contained an inventive element. His Lordship added that the factual approach in the original German 'trilogy' of decisions was correct, but that the German courts should not have remitted Pallet Container II effectively to ascertain end-user opinion as this was irrelevant to the questions to be resolved in patent law.

The panel noted that the case emphasises the irrelevance of implied licence or exhaustion analyses in repair/replacement cases, but underlines that inventive concept will remain a central issue. There was a detailed discussion about whether the inventive concept was affected by the dividing line between pre-characterizing and characterizing parts of a claim, and whether this should be assessed by reference to what the inventor identifies as the invention, or by differences over the closest prior art.   The panel generally considered it may be better practice to avoid characterizing parts.  But it may not really matter as, according to the Supreme Court

“in almost all patents, the claimed inventive concept is clearly identified or identifiable from the patent and, if it is unclear or disputed, it will often be an issue in the proceedings anyway". 

Richard Meade QC posed the question of whether, if inserting the bottle into the Schütz cage was not 'making' the IBC, then what was?  The claim ruled out considering any lesser act as making the claimed product: making the bottle or the cage alone would not suffice.  Michael Silverleaf QC questioned whether a decomposition of the act of making into individual steps was a useful analysis:  the act of making was a composite action of which any one stage formed only a part.  Mr Justice Floyd noted that there were occasions where practicality may override strict logic.

A vote taken at the close of the evening invited the audience to consider whether the audience thought the decision was common sense, or whether it gave rise to difficulties.   An overwhelming majority believed it represented a common sense decision; many of them kept their hands up to indicate that nonetheless, it would still give rise to difficulties in future".

It seems so strange to this Kat that, at a time when our European patent system has never been as unified and unitary as it is now, and we have had a common policy on competition since Lord Hoffmann was a lad, we still have to fiddle around on a case-by-case basis to find out what a patent infringement is and whether we can mend, service or supply replacement items for patented machinery.  Extraordinary, isn't it!