Repair vs. Reconstruction

The distinction between permitted and prohibited activities, with respect to patented items after they have been placed in commerce by the patentee, has been distilled into the terms “repair” and “reconstruction.” The purchaser of a patented article has the rights of any owner of personal property, including the right to use it, repair it, modify it, discard it, or resell it, subject only to overriding conditions of the sale. Thus patented articles when sold “become the private individual property of the purchasers, and are no longer specifically protected by the patent laws.” Mitchell v. Hawley, 83 U.S. (16 Wall.) 544, 548 (1872). The fact that an article is patented gives the purchaser neither more nor less rights of use and disposition. However, the rights of ownership do not include the right to construct an essentially new article on the template of the original, for the right to make the article remains with the patentee.While the ownership of a patented article does not include the right to make a substantially new article, it does include the right to preserve the useful life of the original article. It is readily apparent that there is a continuum between these concepts; precedent demonstrates that litigated cases rarely reside at the poles wherein “repair” is readily distinguished from “reconstruction.” Thus the law has developed in the body of precedent, illustrating the policy underlying the law as it has been applied in diverse factual contexts. Cf. Goodyear Shoe Mach. Co. v. Jackson, 112 F. 146, 150 (1st Cir. 1901) (”It is impracticable, as well as unwise, to attempt to lay down any rule on this subject, owing to the number and infinite variety of patented inventions.”)

The principle of the distinction between permissible and prohibited activities was explained in Wilson v. Simpson, 50 U.S. (9 How.) 109 (1850), where the Court distinguished the right of a purchaser of a patented planing machine to replace the machine’s cutting-knives when they became dull or broken, from the patentee’s sole right to make or renew the entire machine. The Court observed that the knives had to be replaced every 60-90 days whereas the machines would last for several years, explaining, “what harm is done to the patentee in the use of his right of invention, when the repair and replacement of a partial injury are confined to the machine which the purchaser has bought?” Id. at 123. This principle underlies the application of the law.

The US Supreme Court has always taken an expansive view of conduct that constitutes permissible repair of a patented combination of unpatented elements, as was the explained by the Court in Aro Manufacturing Co. v. Convertible Top Replacement Co., 365 U.S. 336 (1961), where the patented combination was a fabric convertible top and the associated metal support structure. The Court explained that replacement of the worn fabric top constituted permissible repair of the patented combination, and could not be controlled by the patentee. The Court restated the principles that govern the inquiry as applied to replacement of unpatented parts of a patented article:

The decisions of this Court require the conclusion that reconstruction of a patented entity, comprised of unpatented elements, is limited to such a true reconstruction of the entity as to “in fact make a new article,” United States v. Aluminum Co. of America, [148 F.2d 416, 425 (2d. Cir. 1945)], after the entity, viewed as a whole, has become spent. In order to call the monopoly, conferred by the patent grant, into play for a second time, it must, indeed, be a second creation of the patented entity, as, for example, in American Cotton Tie Co. v. Simmons, [106 U.S. 89 (1882)]. Mere replacement of individual unpatented parts, one at a time, whether of the same part repeatedly or different parts successively, is no more than the lawful right of the owner to repair his property.

365 U.S. at 346.

This right of repair, provided that the activity does not “in fact make a new article,” accompanies the article to succeeding owners. In Wilbur-Ellis Co. v. Kuther, 377 U.S. 422, 141 USPQ 703 (1964), the Court dealt with the refurbishing of patented fish-canning machines by a purchaser of used machines. The Court held that the fairly extensive refurbishment by the new owner, including modification and resizing of six separate parts of the machine, although more than customary repair of spent or broken components, was more like repair then reconstruction, for it extended the useful life of the original machine. See id. at 425, 141 USPQ at 704-05 (”Petitioners in adapting the old machines to a related use were doing more than repair in the customary sense; but what they did was kin to repair for it bore on the useful capacity of the old combination, on which the royalty had been paid.”)

Precedent has classified as repair the disassembly and cleaning of patented articles accompanied by replacement of unpatented parts that had become worn or spent, in order to preserve the utility for which the article was originally intended. In General Electric Co. v. United States, 572 F.2d 745, 198 USPQ 65 (Ct. Cl. 1978), the court held that the Navy’s large scale “overhauling” of patented gun mounts, including disassembly into their component parts and replacement of parts that could not be repaired with parts from other gun mounts or new parts, was permissible repair of the original gun mounts. The court explained that the assembly-line method of reassembly, without regard to where each component had originated, was simply a matter of efficiency and economy, with the same effect as if each gun mount had been refurbished individually by disassembly and reassembly of its original components with replacement of a minor amount of worn elements. Id. at 780-86, 198 USPQ at 95-100.

Similarly, in Dana Corp. v. American Precision Co., 827 F.2d 755, 3 USPQ2d 1852 (Fed. Cir. 1987), the court held that the “rebuilding” of worn truck clutches, although done on a commercial scale, was permissible repair. The defendants in Dana Corp. acquired worn clutches that had been discarded by their original owners, disassembled them, cleaned and sorted the individual parts, replaced worn or defective parts with new or salvaged parts, and reassembled the clutches. Although the patentee stressed that some new parts were used and that the rebuilding was a large scale commercial operation, the activity was held to be repair. Id. at 759, 3 USPQ2d at 1855. The court also observed that in general the new parts were purchased from Dana, the original manufacturer of the patented clutches, and that repair of used clutches was contemplated by the patentee. The court rejected the argument that the complete disassembly and production-line reassembly of the clutches constituted a voluntary destruction followed by a “second creation of the patented entity,” invoking the phrase of Aro Manufacturing, 365 U.S. at 346.

“Reconstruction,” precedent shows, requires a more extensive rebuilding of the patented entity than is exemplified in Aro Manufacturing, Wilbur-Ellis, General Electric, and Dana Corp.. See also, e.g., Bottom Line Mgmt., Inc. v. Pan Man, Inc., 228 F.3d 1352, 56 USPQ2d 1316 (Fed. Cir. 2000) (repair of cooking device by reapplying non-stick coating); Hewlett-Packard Co. v. Repeat-O-Type Stencil Mfg. Corp., 123 F.3d 1445, 43 USPQ2d 1650 (Fed. Cir. 1997) (modifying unused printer cartridges akin to repair); Kendall Co. v. Progressive Med. Tech., Inc., 85 F.3d 1570, 38 USPQ2d 1917 (Fed. Cir. 1996) (replacement of used pressure sleeve in medical device is repair); Sage Prods., Inc. v. Devon Indus., Inc., 45 F.3d 1575, 33 USPQ2d 1765 (Fed. Cir. 1995) (replacement of inner container for medical waste is repair); FMC Corp. v. Up-Right, Inc., 21 F.3d 1073, 30 USPQ2d 1361 (Fed. Cir. 1994) (replacing worn unpatented picking heads of harvester is repair); Everpure, Inc. v. Cuno, Inc., 875 F.2d 300, 10 USPQ2d 1855 (Fed. Cir. 1989) (replacement of entire cartridge containing spent filter is repair); Porter v. Farmers Supply Serv., Inc., 790 F.2d 882, 229 USPQ 814 (Fed. Cir. 1986) (replacement of disks in tomato harvester head is repair). In contrast, in Sandvik Aktiebolag v. E.J. Co., 121 F.3d 669, 43 USPQ2d 1620 (Fed. Cir. 1997), reconstruction was held to apply when a patented drill bit was “recreated” by construction of an entirely new cutting tip after the existing cutting tip could no longer be resharpened and reused. The court explained that it was not dispositive that the cutting tip was the “novel feature” of the invention, but that prohibited reconstruction occurred because a “new article” was made after the patented article, “viewed as a whole, has become spent.” See also Lummus Indus., Inc. v. D.M. & E. Corp., 862 F.2d 267, 8 USPQ2d 1983 (Fed. Cir. 1988) (jury verdict of reconstruction for cutter wheels that were material part of patented invention).

Underlying the repair/reconstruction dichotomy is the principle of exhaustion of the patent right. The unrestricted sale of a patented article, by or with the authority of the patentee, “exhausts” the patentee’s right to control further sale and use of that article by enforcing the patent under which it was first sold. In United States v. Masonite Corp., 316 U.S. 265, 278 (1942), the Court explained that exhaustion of the patent right depends on “whether or not there has been such a disposition of the article that it may fairly be said that the patentee has received his reward for the use of the article.” See, e.g., Intel Corp. v. ULSI Sys. Tech., Inc., 995 F.2d 1566, 1568, 27 USPQ2d 1136, 1138 (Fed. Cir. 1993) (”The law is well settled that an authorized sale of a patented product places that product beyond the reach of the patent.”) Thus when a patented device has been lawfully sold in the United States, subsequent purchasers inherit the same immunity under the doctrine of patent exhaustion. However, the prohibition that the product may not be the vehicle for a “second creation of the patented entity” continues to apply, for such re-creation exceeds the rights that accompanied the initial sale.