The owner of an item embodying patented technology is allowed to have the item repaired, but if the repairing goes too far it can stray into “making” the item and infringe the patent. A recent ruling explores the boundary between making and repairing, providing some helpful pointers in relation to complex products.
The equipment in this case was larger than usual – a pneumatic bulk cargo discharge system for a ship. A vessel for transporting cement incorporating the system ran aground in 2008. It was damaged to the extent that it was no longer cost-effective to repair. The owners, KGJS Cement, claimed on their insurance and sold the damaged ship on. It was later acquired by PPS, which completed extensive repairs and got the bulk discharge system working again.
The main question for the court was whether the work done between the ship's grounding and sale and its final condition could be classed as repair, or effectively making a new system covered by KGJS Cement's patent. The judge dealt with other points on exhaustion of patent rights and implied licensing, but we will focus on the repair analysis.
Several earlier cases have explained where the line should be drawn. Briefly, "you may prolong the life of a licensed article but you must not make a new one under the cover of repair". Important considerations here were:
- Purchaser expectations – how long would the buyer of a ship including the patented system expect it to last? What repairs and maintenance would the buyer expect to make? With a ship of this kind you would expect a 20-40 year life span with both regular maintenance and unscheduled repairs.
- Life expectancy of components – would the components be expected to be replaced periodically? Here it was clear that some of the components were not ones you might have expected to replace.
- Were they subsidiary or substantial components? The replaced components were subsidiary – the substantial ones being features like the blow tanks and their inlets.
- Did the components have independent identity? They did, although they had to be made to measure.
- Were the replaced components related to the key inventive concept of the patent? They were not – the key components (the blow tanks etc) remained unaffected by the work.
The judge concluded that the work done to the ship by the intermediate owners and the final buyer amounted to repair rather than manufacture of a new system.
Earlier rulings have generally dealt with simpler products (a tensioned wire screen, plastic bulk containers in a metal cage, for example). The analysis in this case gives a useful example of finding the boundary between making and repair where you have a complex product with numerous components.