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The rules on exhaustion of patent rights allow a patented product which has been brought onto the market with the consent of the patent owner to be used by the buyer.
This right also entitles the buyer to repair and maintain the product in order to ensure that it can still be used. However, in some cases the boundaries between repairing and maintaining a product and remanufacturing it (which constitutes patent infringement) seem to blur.
The differentiation is especially important in cases when patented products are used by the buyer and third parties then try to commercialise refilled or recycled products in which the used parts are substituted with new ones. One example is printer cartridges, which are the subject matter of a decision rendered by Germany’s Federal Supreme Court in October 2017, Drum Unit (Trommeleinheit). The plaintiff asserted claims based on direct infringement of claim 1 of the patent through the distribution of recycled printer cartridges for laser printers.
Claim 1 covers a photosensitive drum unit, and further independent claims of the same patent cover a cartridge and an electrophotographic image-forming apparatus which both encompass a drum unit. The defendants distribute recycled printer cartridges which may be used instead of the cartridges manufactured and distributed by the plaintiff. The defendants substituted, inter alia, a new picture drum for the used picture drum (which is part of the drum unit) in the original product manufactured by the plaintiff.
The Düsseldorf District Court had found patent infringement. On appeal, the Düsseldorf Court of Appeal affirmed this. The Court of Appeal said that the substitution of the picture drum was an act of remanufacturing the drum unit covered by claim 1. One main argument was that, according to the relevant consumer, approximately 70% of the value of the drum unit could be attributed to the picture drum, ie, to the part that was substituted by the defendants.
"The court said the point of reference must always be the patented subject matter in question. This rule also applies if—as here—the patented subject matter is not itself the marketed product but only part of a broader product."
The Federal Supreme Court disagreed with the Court of Appeal. It overturned the judgment and dismissed the action for patent infringement. The court said that an assessment on the basis of the relevant consumer’s perception was not admissible in this case, which is characterised by the fact that the protected device (the drum unit) was distributed only as a part of a broader product (the cartridge). In that situation it was decisive whether the technical effects of the invention were reflected exactly in the substituted parts.
A special situation
The Supreme Court’s judgment refers to a special situation. The plaintiff had asserted an infringement of claim 1 which covered only a part of the cartridge that was actually marketed by the patent owner. The consequence of this was twofold:
- The Supreme Court had to decide which patented subject matter was the starting point for the evaluation of whether there was remanufacturing. This issue had not yet been decided by Germany’s highest court in civil matters, because before Drum Unit, the patented subject matter and the actual marketable product had been identical.
The court said the point of reference must always be the patented subject matter in question. This rule also applies if—as here—the patented subject matter is not itself the marketed product but only part of a broader product.
Furthermore, the court said it was irrelevant whether the broader product (the cartridge) is itself the subject matter of an independent patent claim (whether of the same or a different patent). I believe this is correct, since the starting point must always be the independent patent claim in question (the drum unit), ie, the patent claim whose infringement is asserted.
- Second, the court had to decide whether in cases of substitution of a part of the patented subject matter the remanufacturing could be evaluated from the consumer’s point of view, as the Court of Appeal had done. The consumer’s view is undoubtedly the correct standard in cases where the patented product is identical to the one the consumer buys. That had already been decided previously by the Supreme Court.
The court now says that standard cannot be applied where the patented subject matter is not itself the marketed product, but rather just a part of it, because in that kind of situation there was no “consumer’s view” which the court could apply. In that particular case, the Supreme Court draws on purely technical considerations and correspondingly asks whether it was exactly the substituted parts in which the technical effects of the invention are reflected.
Jens Künzel is a partner at Krieger Mes & Graf v. der Groeben in Düsseldorf, Germany. He can be contacted at: firstname.lastname@example.org
patent, patent rights, printer cartridges, German Federal Supreme Court, patent infringement, Drum Unit