Judge cagey about retro-fit patent infringement

It's a late March decision but the IPKat has only just caught up with it. He's talking about Schütz (UK) Ltd v Werit Ltd and Protechna SA [2010] EWHC 660 (Pat), a fascinating and pretty long (227 paragraph) ruling of Mr Justice Floyd, sitting in the Patents Court, England and Wales.

Schütz owned two European patents (307 and 967) for intermediate bulk containers (IBCs) which consisted of a metal outer protective cage and a removable plastic inner bottle. No little bottle, this removable feature could hold up to 1,000 litres. The patents claimed, among other things, a system of welding for the metal cages. Werit sold its own plastic bottles to a third party, Delta, which retro-bottled them into second-hand Schütz cages before selling them on. According to Schütz, this was a "making" the patented product and Werit's supply of bottles to Delta for retro-fitting into its frames was a contributory infringement under the Patents Act 1977 s.60(2).

Did these alleged infringements fall within the claims? It all depended on whether Schütz's cages fell within its own patents. Werit said that (i) Delta's retro-fitting didn't constitute infringement in the first place because they did not amount to making the patented product; (ii) Schütz's patents weren't even valid on the grounds obviousness, insufficiency and, for the 967 patent, added matter; and (iii) even if the patents were valid, since there was an unlawful restrictive licensing agreement made by Schütz with a third party, Protechna, there was a breach of the Patents Act 1977, s.44, which rendered Schütz's patent rights unenforceable during the period of the alleged infringements.

Holding both patents to be valid, Floyd J gave judgment for Werit on the basis that the company hadn't infringed them. In doing so, he explained that, in any infringement action, the crucial issue was whether what the defendant is shown to have done actually deprives the patentee of the rights to which his patent entitled him. In this instance, where the alleged infringement related to only part of the patent, the correct approach was to consider whether, when the part in dispute was removed, what was left embodied the whole of the inventive concept of the claim. Such a test would give the patentee the full rights to which his patent entitled him, having regard to the nature of the invention as claimed and to the nature of the patented article.

On the facts here, Floyd J continued, replacing the inner container of Schütz's IBC with a bottle from Werit did not amount to making the patented product under either patent since the inventive concept of each patent was wholly embodied in the cage. Accordingly when the bottle was removed, the part that was left -- the cage -- embodied the whole of the inventive concept.

The judge added that s.44 didn't apply here anyway. The agreement between Schütz and Protechna was not a restrictive abuse of monopoly, but a harmless agreement under which the licensee agreed to purchase the patented product in kit form.

The IPKat draws the attention of readers to the classical and historical allusions which reflect earlier versions of the conundrum raised in this case. He said:

"According to Greek legend (as reported by Plutarch):

"The ship wherein Theseus and the youth of Athens returned [from Crete] … was preserved by the Athenians down even to the time of Demetrius Phalereus, for they took away the old planks as they decayed, putting in new and stronger timber in their place, insomuch that this ship became a standing example among the philosophers, for the logical question of things that grow; one side holding that the ship remained the same, and the other contending that it was not the same."

This paradox, like that of George Washington's axe with its three new handles and two new heads, has divided philosophers for centuries. One of the issues which divides the parties to the present patent action is whether the acts of infringement relied on amount to making a new product, or merely replacing parts in an old one".

Other intellectual property assets involving cages here, here and here