In Schütz (UK) Limited v Werit (UK) Limited [2013] UKSC 16 the UK Supreme Court has provided guidance on the meaning of “making” a product, as opposed to repairing a product, in the context of patent infringement disputes.

BACKGROUND

Schütz (UK) Limited is the exclusive licensee of a patent relating to intermediate bulk containers (IBCs), which are used to transport a wide range of liquids. IBCs consist of a cage into which a large bottle is fitted that holds the liquid. Typically, the cage will last five to six times longer than the bottle, as often the bottle will become damaged or cannot be reused, owing to the liquid that was stored in it. The patent protects the IBC as a whole, but it is agreed that the inventive concept of the patent relates to the flexible welds on the cage that improve the durability of the IBC.

Werit UK Limited manufacturers IBC bottles. These are sold to an IBC reconditioner that replaces the no longer usable Schütz bottle with a Werit one and offers the reconditioned IBC on the market. Schütz brought patent infringement proceedings against Werit, alleging that the replacement of the bottle in its IBCs constituted “making” the product for the purposes of Section 60(1)(a) of the Patents Act 1977. The High Court of England and Wales found in favour of Werit. It considered that the correct approach to determine whether or not Werit’s actions constituted making the product was to ask whether or not, when the part was removed, what was left embodied the whole of the inventive concept of the claim. The Court of Appeal disagreed with the High Court’s approach, and found in favour of Schütz on the basis that the product covered by the claim of the patent (the IBC) ceased to exist when the bottle was removed. Werit appealed to the Supreme Court.

DECISION

The Supreme Court, in a judgment given by Lord Neuberger, began by considering the meaning of the word “makes”. Lord Neuberger set out a number of considerations, including that it should be given an ordinary meaning and not treated as a term of art, and that it will often be a question of fact and degree as to its meaning, amongst other policy considerations. Against this background, he undertook a review of the leading English case on the subject, United Wire Ltd v Screen Repair Services (Scotland) Ltd [2000] 4 All ER 353 (a House of Lords decision that he noted should not be departed from unless there was a very good reason to do so) and a number of German decisions on the equivalent German patent.

The Supreme Court considered that both lower courts had not approached the central issue in this case in the correct manner. It decided the High Court had oversimplified the issue, whilst the Court of Appeal relied overly on United Wire and did not appreciate that making is a matter of fact and degree. It thus fell to the Supreme Court to decide the correct approach to the question of when a product is “made” in the context of repairing.

Lord Neuberger considered it helpful to ask whether or not the bottle was “such a subsidiary part” of the product protected by the patent that replacing it would not invoke making a new product. This is a question of degree. The bottle was a substantial part of the IBC, but it was noted that its life expectancy was five to six times less than that of the cage and was easily replaceable. Further, it did not include any aspect of the inventive concept of the patent, which related to the welds on the cage. On this analysis, the Supreme Court sided with the High Court in finding that replacing the bottle did not constitute “making” a new IBC.

COMMENT

Ultimately, the Supreme Court agreed with the High Court but for, in Lord Neuberger’s words, “more nuanced reasons”. Making is a question of degree and in finding in favour of Werit, Lord Neuberger considered his approach to be compatible with United Wire.

Of interest is the Supreme Court’s willingness to review the German decisions on the German equivalent patent. Lord Neuberger noted that, whilst the Supreme Court was not bound to follow the German courts, it was “sensible for national courts at least to learn from each other”.