When Werit finds Merit: UK Supreme Court okays spare parts

Today, following some years of litigation which the IPKat has monitored here, here and here, the UK Supreme Court has given its decision in Schütz v Werit [2013] UKSC 16, A unanimous five-judge court (Lord Neuberger, Lord Walker -- both of whom are former members of the Patents Court -- plus Lady Hale, Lord Mance and Lord Kerr) allowing the appeal and holding that Werit was not infringing Schütz's patent rights by supplying replacing parts. While this dispute involved replacement parts consisting of plastic bottles patented intermediate bulk containers (or IBCs, as they are affectionately called by their admirers), the principle articulated here is equally applicable to consumable and therefore ideally replaceable parts for items as different as cars and cartridges for printers.

The decision, covering 28 pages and 107 paragraphs, is too long for immediate consumption, so this and other Kats may well return to it at greater length in due course. However, for the sake of its newsworthiness a note is posted here and now, with the guidance of information provided by Hogan Lovells, solicitors for the victorious Werit.

In short, the Supreme Court ruled that, when replacing parts, manufacturers should to take into account a range of factors, including whether the part in question is expected to be replaced in the normal life of the larger item to which it belongs and also whether it forms part of the invention. This decision, at paras 37 to 47, also brings UK law more closely in line with equivalent Bundesgerichtshof (German Supreme Court) case law including Schütz v Mauser (Pallet Container II) Case X ZR 97/11, in July 2012 [by pure coincidence, a full English translation of this ruling was published in the January 2013 issue of JIPLP]. At trial, the Patents Court (Mr Justice Floyd) ruled that Schütz’s patent was not infringed by Werit’s sale of reconditioned bulk containers in which a new plastic bottle was inserted into the IBC's metal 'cage' which, being made of metal, was a good deal more durable.  The Court of Appeal (Sir Robin Jacob delivering judgment on behalf of himself and Lords Justices Ward and Patten) disagreed: the patented product should be considered as a whole, of which the cage and the bottle were each parts. By putting a new bottle into the cage, said the Court of Appeal, Werit's customers were effectively completing the patented product and, in doing so without a licence, they infringed Schütz’s patent. Werit was therefore liable as a patent infringer for supplying infringing products.

Now that the Supreme Court has ruled that replacing a part is not necessarily an act of 'making', things have become easier for businesses further down the line from the original manufacturer. Said Hogan Lovells partner Stephen Bennett:

"This decision removes an obstacle to reconditioning – it means that manufacturers can now potentially create replacement parts for larger consumable objects without fear of infringing patent rights. It also has the potential to open up the market for consumable parts and allow more competition in the manufacture of consumable parts such as filters and cartridges",

this being something that the competition authorities, long-time enthusiasts for opening up new markets, will no doubt be chortling about (though this result was reached through analysis of IP law, with no need for intervention by the competition authorities).

The Cat, the Cage and the Plastic Bottles -- the movie