Innovative Distinctions between Make and Repair

An intermediate bulk container (IBC) was the subject of an ongoing patent suit between exclusive UK licensee of the patent, Schütz (U.K.) Limited (Schütz), and Werit UK Limited (Werit). IBC’s are bulk liquid shipping containers with wire frames surrounding a plastic container in order to improve structural stability. IBCs are designed this way in order to better withstand the structural stress of long-distance shipping.

One of the IBCs other attractive qualities is that the inner plastic containers can be switched out after they are no longer viable, and new plastic containers can be inserted into the wire frame.  Werit is a company that will swap out used containers for new plastic containers of a design not offered by licensee Schütz. Schütz argues that pursuant to their rights under the UK Patents Act 1977 section 60(1) this swapping out of bottles is an infringement of their exclusive rights to make IBCs.

At Trial, Floyd J. made note of the fact that the inventive element to the underlying patent had nothing to do with the bottles themselves.  On that basis the Judge found that without any changes to the inventive physical compound of the patent, “…a Werit bottle does not amount to making the patented product”. The UK Court of Appeal however, overturned that decision on the basis that “[the] product (i.e. the IBC) ceased to exist when the bottle is removed”. Therefore it follows that “[w]hat remained at that stage was merely an important component from which a new IBC could be made”, meaning refitting the IBC with a new bottle constituted a making.

On March 13, 2013 the UK Supreme Court gave its own opinion on whether swapping bottles could constitute making an IBC. In its assessment the court justified the distinction of fact between a repair and a making of a product. Repair had been held as not infringing on any rights which a patent holder enjoys.  Though the court conceded that replacing a component is sometimes seen as a repair, they acknowledged that the distinction is not obvious and should be treated with caution.

The court decided therefore to consider the importance of the bottle in connection with the patent as a whole. The court determined that the degree to which the replaced component represented a primary aspect of the patent, the more likely the replacing of that component would be regarded as a making of the patented item. The question was also found to be one of fact. In this case, weighing a variety of factors, the court supported Justice Floyd’s decision for similar grounds. The replacing of the bottle was found to simply be a repair, and not a making of the patented product.

Although I think the decision was highly fact driven, I think there was an additional legal argument which may have deserved some attention.  That argument is based on the idea that when Werit replaced the Schütz bottles, they weren’t repairing an IBC, nor were they making one. Instead, they were making something new.  Part of Schütz’s argument (especially according to the court of appeal) is that the bottle itself was a fundamental part of the patent. If such a fundamental component is replaced, is it correct to state that their patent was infringed?

As Justice Floyd discussed, the only inventive element to the patent was the wire cage around the bottle. This means that all other components of an IBC, including their combination, were not innovative. Since the cage wasn’t modified in any way, Schütz was left with asserting that an IBC is patented as a unit and can be infringed by removing a component and replacing it with something else, even if that component has nothing inventive about it. To make such an assertion would, in my opinion, limit the ability of improvement patents to be registered, since apparently replacing non-inventive components can constitute a making of the underlying product. Apart from issues of whether this was a repair in this case, I would have liked to see a discussion about the limits that this kind of assertion makes on novel products. However, I do believe that the reasoning used by the UK Supreme Court was correct and resulted in a proper conclusion.

Adam Stevenson is a JD Candidate of Western University, Faculty of Law.

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