From the Ship of Theseus, to Trigger’s Broom, the question of when repairing something leads to making that item new has puzzled philosophers for millennia. In Schütz v Werit, a similar question has been puzzling the UK Courts.
The original claimant, Schütz, holds an exclusive license to a European patented Intermediate Bulk Container (IBC); a metal cage sitting atop a pallet and into which goes a plastic bottle. IBCs were known, but the patent claimed the aforementioned three features and included a dimple on either side of the weld joints in the cage. The dimple enabled flexing of the cage adjacent to the weld, which relieved stress on the weld joint and made the container more durable.
It is typical in the IBC industry for “re-bottling” to take place by a manufacturer, whereby a worn bottle is replaced within an existing pallet and cage. “Cross-bottling” also takes place, which is where a bottle from one manufacturer is inserted into the cage of another manufacturer.
Werit sells its bottles to third parties, including a manufacturer called Delta who buys used Schütz IBCs, re-bottles them with Werit bottles, repairs any damage to the cage and offers the reconditioned IBCs for sale, in direct competition with Schütz.
Were Werit and Delta making the Schütz IBC and thus liable for infringement? Or were they merely repairing the IBC, which is a non-infringing act?
- The claim was first heard in the UK High Court in 2010. Following an earlier decision by the House of Lords in United Wire v Screen Repair Services (the leading UK judgment on this matter), Floyd J applied the following test to distinguish between repair and manufacture:“In my judgment the correct approach is to ask whether, when the part in question is removed, what is left embodies the whole of the inventive concept of the claim.”Floyd J decided that because the claim was really about an improved cage, when the old bottle was removed from a Schütz IBC what remained was essentially still a Schütz IBC. He therefore found that a repair, rather than manufacture was being performed and thus there was no infringement.
- This judgment, was appealed in 2011 and Jacob LJ of the Court of Appeal rejected the interpretation of United Wire by Floyd J.Referring again to United Wire v Screen Repair Services it was held that whilst the whole inventive concept could be said to lie in a component of the product which was not replaced during the alleged infringing act, there was still infringement. Jacob LJ rejected the additional “whole inventive concept” test, considering it to be “fuzzy and uncertain”, and without basis in the law of infringement. The question, he stated, is whether the alleged infringer had made the patented product. When applying this test, Jacob LJ held that Delta had made IBCs when they replaced Schütz’s bottles with those manufactured by Werit. Delta and Werit had, therefore, infringed.
- However, in a ruling of the Supreme Court, published on Wednesday 13 March 2013, this decision was overturned and a unanimous verdict reached that repairing a product frequently involves replacing one or some of its parts and this should not be viewed as “making” a new article. The presiding judge, Lord Neuberger, stated that whether carrying out repairs constitutes making, depends on a number of factors. Neuberger concluded that the bottle of a Schütz IBC was only a subsidiary part of the patented product, because it was a freestanding, replaceable component, had no connection with the claimed inventive concept, has a shorter life expectancy than the cage in which it sits and could not be described as the main component of the article. Delta carries out no work beyond re-bottling the Schütz IBC with Werit bottles and repairing any cage damage. It was concluded, therefore, that Delta and Werit were not making the patented product and thus were not infringing.
The ruling brings UK case law more in line with German Supreme Court decisions in Impeller Flow Meter, Laufkranz case X ZR 45/05 and Pipettensystem case X ZR 38/06 and, as remarked by the advisers of Werit, “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”. The question of which parts of a product can be replaced without “making” the product will need to be considered case by case, but the Supreme Court judgement in Schütz v Werit suggests that subsidiary parts of a product can be replaced without infringement.