When does replacing a consumable part infringe a patent?
The UK Supreme Court ruled today on the tricky question of when replacing a consumable part of a larger device is an act of patent infringement. The unanimous decision of five justices of the Supreme Court makes it clear that the test is not a simple mechanical test of whether the replaced part is a feature of the patent's claims. Rather, the issue is more nuanced, taking into account a range of factors including: whether the replaced part in any way embodies the invention; and whether that part is expected to be replaced in the normal working life of the larger device. Significantly, the case brings English law more closely in-line with equivalent German Supreme Court case law.
Schütz and Werit, the parties to the case, are both manufacturers of containers called Intermediate Bulk Containers (IBCs). These are containers designed to carry liquids and powders in approximately 1,000 litre volumes. As shown below, an IBC is made up of an outer metal part (the cage), an inner plastic container (referred to as a bottle), a pallet base, tap and lid.
IBCs are used to transport chemicals. It is common that the bottle will be contaminated after one journey carrying chemicals so that it cannot be re-used. The cage, however is more durable with a life of up to five years. As a result, there is a practice of replacing the inner bottles of the IBC so the IBC can be re-used. The standardized outer dimensions of IBCs mean that the inner dimensions of the cages are largely the same between manufacturers. The result is that the bottle for a Schütz cage will fit into a Werit cage and a Werit bottle in a Schütz cage. The practice of putting one manufacturer's replacement bottle in the cage of another is known in the industry as "cross-bottling". Schütz objected to the cross bottling of Schütz cages, suing Werit for infringement of Schütz' patents by supplying Werit bottles to companies that replace the bottles in used IBC cages, including Schütz' cages.
Schütz' objections were originally based on three patents. Schütz dropped its case on one patent EP 673,846 before trial and lost on infringement of a second EP 370,967 at trial (its own cage did not meet the claim requirements). At first instance, Floyd J held that replacing the bottle in a used Schütz IBC with a Werit bottle did not infringe the remaining patent EP 734, 967 ("EP 967"). He reasoned that the bottle was not part of Schütz' invention and that replacing it was not an act of making the claimed IBC. In the Court of Appeal the decision went the other way with Sir Robin Jacob holding that replacing the bottle must be making because, in essence, the bottle is a claim feature. The Supreme Court reversed the Court of Appeal and held that there was no making by replacing the bottle and accordingly, Werit (represented by Hogan Lovells), had not infringed by supplying replacement bottles.
It was established by the time the case arrived at the Supreme Court that Schütz' invention in EP 967 was in the way that the metal tubes forming the cage of its IBCs were welded together. The claim of EP 967 in dispute is as follows (using the break-down adopted by the Supreme Court):
“[A] Pallet container for the transporting and storing of liquids, having a flat pallet, an exchangeable inner container made of plastic material with an upper, closable filler opening and a lower emptying device and also, surrounding the inner container, one outer sleeve which consists of vertical and horizontal lattice bars made of metal which support the plastic inner container filled with liquid,
[B] the lattice bars which are configured as tubes being indented at the intersection points to form trough-like, double-walled recesses extending in the longitudinal direction of the lattice bars
[C] in such a manner that at each intersection point between the longitudinal edges of the recesses of two lattice bars lying perpendicularly one above the other there arise four contact points with a material accumulation respectively corresponding to the quadruple lattice bar wall thickness, and the four contact points of the two lattice bars being welded together at the intersection points,
[D] characterised in that the trough-like recesses of the vertical and horizontal lattice bars have a central raised part extending across the cross-section of the recesses,
[E] two lattice bars respectively lying one above the other at the intersection points are welded together at the four contact points of these raised parts and the incisions of the recesses of the lattice bars adjacent on both sides to the raised part
[F] with the contact and weld points form restrictedly elastic bending points with a reduced bending resistance moment relative to the raised part for relieving the weld joints at the intersection points upon application of static and/or dynamic pressure on the lattice sleeve.”
Although Schütz' invention lay only in the weld joints, it had chosen to claim a complete IBC including the bottle, lid and tap (see feature [A]). Schütz' case was that anyone who inserted a non-Schütz bottle in a used Schütz cage thereby made an IBC falling within the claim and so infringed.
United Wire explained
The leading case before Schütz v Werit was United Wire v Screen Repair Services  RPC 24. In that House of Lords case, the two patents in issue related to vibrating sifting screen assemblies for use in machines that cleaned up drilling fluid (known as "mud") in large machines known as vibratory sifting machines. The vibrating screen assemblies were themselves consumables – they had a life measured in days and needed to be replaced regularly. The patents' claims were to the vibrating screen assemblies which comprised at least two frames with a mesh stretched across each frame. The defendants in that case took used screen assemblies, took them to pieces, cleaned the frames, glued on new meshes and sold the resulting items. In that case, the House of Lords key point was that asking whether the defendants' acts were "repair" or were allowed by an implied licence was not necessarily a useful approach. The question to be asked was simply whether the acts in question amounted to making. In United Wire, the acts in question did amount to making. The decision in United Wire is brief and gave little guidance on how to assess what constitutes an act of making.
Both sides in Schütz v Werit relied on United Wire, each saying that the question of "making" should be answered in its favour. Schütz case was that replacing any claim feature was making. Werit argued that there must be more involved and that, in particular, it was important to ask whether the part replaced was any part of the invention of the patent and whether it was a part that was expected to be replaced (in other words, a consumable). The national law provisions relating to infringement in the UK and Germany are based on the provisions of the Community Patent Convention (CPC). Werit therefore felt able to cite a trilogy of German Supreme Court cases that had developed the law in Germany for assessing infringement when parts are replaced (Impeller Flow Meter Case X 2R 48/03, Wheel Tread Case X ZR 45/05 and Pipette System Case X ZR 38/06 ). The UK Supreme Court emphasised the importance of giving considerable respect to decisions of the courts of CPC signatories although it made it clear that there was no obligation to follow such national court decisions (in contrast to the stronger requirement to follow certain EPO decisions in HGS v Eli Lilly  UKSC51). The German trilogy proposed a test that involved looking at whether the invention of the patent lay in the replaced part and whether the part replaced was a consumable (expected to wear out in the normal life of the larger device).
With respect to the part in issue, whether the part:
(i) is a freestanding replaceable component of the patented article;
(ii) has any connection with the claimed inventive concept;
(iii) has a much shorter life expectancy than the other, inventive concept; and
(iv) cannot be described as the main component of the patented article.Not necessarily infringement ...
The decision sheds considerable light on the pithy United Wire v Screen Repair Services  RPC 24 decision. Most significantly, it makes it clear that replacing a part which is a claim feature is not necessarily an act of making. Parties will have to look at further factors and key considerations will include whether the part is expected to be replaced in the normal life of the larger item and whether it forms part of the invention.