Right to repair: intellectual property & additive manufacture of spare parts
Key takeaways
It is unlikely that there will be infringement of intellectual property rights (IPRS) where the spare part is 3D printed by the machine owner for the purposes of repair of a complex machine. This has been reaffirmed in the recent High Court decision of CALIDAD PTY LTD V SEIKO EPSON CORPORATION[1] where it was held that the replacement of an unpainted component was not infringing because it did not involve making a new product.
However, there is still uncertainty for 3D printing in instances where the spare part itself is patent-protected.
The underlying CAD drawings used in 3D printing will be protected by copyright, but infringement requires actual copying of the original drawings.
Developments in 3D printing technology have improved the metal additive manufacturing of parts, and in particular the cost-effective manufacture of metal parts suitable for heavy industry and defence. By leveraging cold-spray technology, 3D printers can produce industrial high-quality large metal parts in just minutes, at normal production costs. Consequently, large-scale metal spare parts can now be printed on site and on demand by the machine owner.
The ability to cost effectively and quickly 3D print large-scale metal parts has several advantages for heavy industry and defence that rely on the consistent operation of machine equipment and tools, often in remote locations.
First, it reduces the downtime of the machines and provides greater stability in maintaining production levels. Until now, machine parts have been shipped from the original equipment manufacturer (OEM) or specific third-party parts manufacturer (TPM). The OEM or TPM may be located overseas and the part may not be ready when needed. Further delays are incurred when the spare part needs to be delivered to remote locations. Additive manufacturing reduces delays and supports ‘just-in-time’ manufacturing processes, allowing for emergency repairs, seamless maintenance of existing inventory and re-purposing of legacy systems.
The ability to 3D print large-scale machine parts also means that the owners of the machines are not reliant on a third-party provider for parts. The COVID-19 pandemic highlighted the weakness of single-source dependencies in supply logistics and the need to regionalise supply.[2] While global supply logistics will still be relevant, there is a recognition by government of the importance of sovereign capability in key industry areas such as defence, energy technology and waste and recycling.[3]
Finally, 3D printing technology introduces greater flexibility to heavy industry and defence on many different levels: machines are more adaptive to different uses and can be customised due to the high degree of design freedom afforded by additive manufacturing techniques. Single purpose machines could potentially be adapted for a wider variety of uses and parts could be tailored and improved by the user, leading to further innovation and development.
Being able to use 3D printing technology for spare parts may fundamentally change the way heavy equipment and large machine tools are constructed. It is easy to envisage how complex machines used in defence, mining, agriculture, construction and exploration may now be built to allow greater flexibility in component parts, allowing for continuous upgrades and evolvement.
This article explores the potential intellectual property issues in 3D printing of spare parts. While issues surrounding intellectual property rights (IPRs) and manufacturing of spare parts is not new, the increased accessibility of the machine owner being able to 3D print metal spare parts for use in heavy machinery and equipment has meant that a new group of stakeholders is now able to manufacture parts. Accordingly, it is important to understand what types of IPRs might exist and when such IPRs will, or will not, be a barrier to 3D printing of spare parts.
Understanding what types of intellectual property exist in parts
Many OEMs try to control the spare parts aftermarket by using IPRs to maintain exclusivity over the manufacture of the spare part or by contractual clauses that require the consumer use an ‘authorised’ replacement part to maintain a product warranty. However, in Australia as well as many other countries, the IPRs granted to spare parts is curtailed.
This is because there has long been a public policy recognition that IPRs should not be improperly used as a barrier against a consumer’s ‘right to repair’ and, more broadly, against a consumer’s right to an increased range of quality and value of goods and services.[4]
Patents
A patent gives the patent owner the exclusive right, during the term of the patent, to make, hire, sell or otherwise dispose of the invention, and to use and import the invention. While it is an infringement to ‘make’ a product that falls within the scope of a patent, in general, it is not an infringement of a patent to make and supply a replacement part for a complex machine even if the machine is subject to patent protection.
The doctrine of ‘exhaustion’, also referred to as the ‘first sale doctrine’, followed in the United States[5] and the European Union[6] limits the extent to which patent owners can enforce their rights on a patented product after it has entered the market with the right holder’s consent. The approach followed in the United Kingdom is that the first sale of the patented machine provides the purchaser with an ‘implied licence’ that permits the purchaser of a patented product to use, maintain, re-sell and import the product without infringing the patent.[7] Until recently, Australia followed the UK in adopting the ‘implied licence’ doctrine. However, in obiter dicta the majority in the recent High Court decision of Calidad[8], found that the sale of a patented product exhausts the patent owner’s right to control further exploitation of the patented product.
Under both the doctrine of ‘exhaustion’ and the ‘implied license’ doctrine, the purchaser of the patented product can use, re-sell and repair their product without requiring permission from the patent holder. However, the purchaser cannot re-make the product. The courts have recognised that there is a line between repairing a product and re-making a product and this is a question of ‘fact and degree’.[9] The relevant factors are:
Whether and to what extent the technical effects of the patent are embodied in the replaced part.
The need for repair of the product having regard to its normal life cycle.
The extent of the repair and whether it equates to a new product.
The extent to which the repaired part competes with the original part.[10]
This was further clarified in the Calidad case, where the court found that modifications to prolong the life of a product and to replace an unpatented component part were within the owners right. However, where the extent of the modifications was such that it resulted in a significant change to the form and function of the patented product, then then the modifications would be found to be re-making the patented product and therefore infringing.[11]
While the doctrines of ‘exhaustion’ and ‘implied license’ operate to allow the printing of spare parts for the purpose of repair of complex machines even if such machines are patent protected, this exception will not apply if the spare part itself is subject to a patent. If the spare part is subject to a patent, then it may be an infringement to make the replacement part using 3D printers.
Designs
Spare parts may also be protected under design registration. A design registration protects the aesthetic appearance of the product or part and a design registration will be infringed by the making of a product that is identical or substantially similar in overall impression to the registered design.
Australian design law expressly includes ‘a right to repair’ for the purpose of opening up the spare parts aftermarket to greater competition. Section 72 of the Designs Act 2003 (Cth) provides that where a component part is used for the repair of a complex product, so as to restore the overall appearance of the complex product, the use of the component part for that purpose does not infringe a registered design. Repair can include restoring or replacing damaged parts or carrying out maintenance on a complex product. However, it cannot include enhancements.
Section 72 was tested in the Federal Court case of GM Technology Operations LLC v SSS Auto Parts Pty Ltd[12] (2019) whereby GM sought an injunction against SSS Auto Parts (SSS) for the sale of spare Holden car parts to second-hand owners to be used to repair Holden Commodores. In this case, there was no dispute that the parts produced by SSS were substantially identical to GM’s registered designs. The issue was whether the spare parts were for the purposes of repair. However, the evidentiary burden rests on the registered design owner to prove the alleged infringer knew, or ought reasonably have known, that the parts were not being used for repair purposes and, in this case, the court found that GM did not discharge its onus and SSS was entitled to rely on the repair defence.
While Australian law has introduced an express right of repair for registered designs, the position is less clear in Europe. At the EU-wide level most spare parts are unlikely to be protected by design registration because:
Internal spare parts which are not visible cannot be protected as registered designs;[13] and
There is a ‘must fit’ exception that provides that a part cannot be registered as a design if the features of the part must be reproduced in the same form and dimensions so to permit the machine in which the design is incorporated to perform its function.[14]
There is also a defence to infringement if the spare part is used for the purpose of the repair of a complex product[15].
However, member states of the EU have all been able to maintain their own national laws regarding spare parts and the ‘right to repair’. While several EU member states have bought their national law in line with the EU position, there are a number of countries that still maintain protection of spare parts.
In the United States, it is clear that there is no exception for infringement of patented parts used for repairs.[16] Despite ‘right to repair’ legislative bills being before 20 states and calls for a right to repair from various industry groups, none of these bills have been enacted into law.
Copyright
Copyright protects artistic expression and will be infringed where someone other than the copyright owner uses a substantial portion of their work in one of the ways reserved for the copyright owner without permission. This would include reproducing the work in material form.
However, copyright is not intended to protect the manufacture of mass-produced machine parts. Items that are functional in nature or ‘industrially applied’ (that is, more than 50 articles have been made) will not be protected by copyright. Accordingly, copyright is unlikely to protect most spare parts.
While copyright may not protect the spare part, copyright would protect any underlying drawings of the part and it would be copyright infringement if a machine owner uses the OEMs drawings to make a spare part. However, actual ‘copying’ is an element of copyright infringement and it would not be infringement if the drawings were reverse-engineered from the part itself or the 3D print was made by scanning the part.
Trade Marks
Trade marks protect any signs that act as a source of origin. While we mostly think of trade marks as brand names and logos, trade marks can also be shapes (like the Coca-Cola bottle). A trade mark is infringed if it is used as a sign that is substantially identical or deceptively similar to the registered trade mark for the same or closely-related goods or services.
Trade mark infringement is unlikely to occur in the case of a machine owner 3D printing their own spare parts, because such spare part is not being used as a ‘sign’ in the course of trade. The question may be different if the purpose of printing the part was for further re-sale. Then it would be important to consider whether the use of the trade mark falls within the ‘good faith’ defence[17] or amounts to ‘fair use’.[18]
Conclusion
3D printing now provides a commercially viable alternative for heavy industry and defence to manufacture their own metal spare parts for large scale machines and equipment, rather than relying on the existing OEM and TPM models. However, it is important to have a clear IPR framework directed to the end-user’s right to repair to avoid uncertainty as to when an additive manufactured part will be infringed.
Under the existing IPR systems, it is unlikely that there will be infringement of IPRs where the spare part is 3D-printed for the purposes of repair by the machine owner. However, there is still uncertainty in instances where the spare part itself is patent-protected.
To reduce this uncertainty, amendments to the existing IPR system are required. In particular, there should be clear statutory exceptions for private, non-commercial use where spare parts are manufactured by the machine owner. Most countries already have some exceptions in their patent law regarding private, non-commercial use.[19] However, there is inconsistency in the application of the private, non-commercial use exception and in the definitions of ‘private’ and ‘commercial’. This could be clarified under the international treaty system which has successfully been used to harmonise IPRs and promote agreed international standards.
For OEMs, valuable IPRs may be controlled through the distribution of digital blueprints by appropriate license arrangements and security protocols. The advantage to both machine owners and OEMs is that a licensing system provides the opportunity for both parties to further innovate on commercial negotiated terms. The focus for protection of IPRs in 3D printing should be in software design, scanning, streaming of digital blueprints, file authentication and security and digital rights management.[20]
[1] Calidad Pty Ltd v Seiko Epson Corporation [2020] HCA 41
[2] Cordon, C and Buatois, E (2020) ‘A post COVID-19 outlook: the future of the supply chain’ accessed 01 November 2020 < https://www.imd.org/research-knowledge/articles/A-post-COVID-19-outlook-The-future-of-the-supply-chain/>
[3] Riley J, (2020) ‘Sovereign capability a new priority: Andrews’ access on 12 November 2020 <https://www.innovationaus.com/sovereign-capability-a-new-priority-andrews/>
[4] Australian Government Productivity Commission (2018) ‘Intellectual Property Arrangements: Productivity Commission Inquiry Report’, No. 78, dated 23 September 2018 and Grinvald, L C and Tur-Sinai, O (2019) ‘Intellectual Property Law and the Right to Repair’, Fordham Law Review, Volume 88, Issue 1, Article 3, p 84.
[5] Impression Products v Lexmark (2017) 581 U.S. 1523
[6] Deutsche Grammophon Gesselschaft mbH v Metro-SB-Grossmarkte GmbH & Co KG [1971]
[7] HTC Corporation v Nokia Corporation [2014] RPC 577
[8] Calidad Pty Ltd v Seiko Epson Corporation [2020] HCA 41.
[9] ibid
[10] Ballardini R M, Ituarte I F and Pei E (2018) ‘Printing Spare Parts through Additive Manufacturing: Legal and Digital Business Challenges’, Journal of Manufacturing Technology Management, July 2018
[11] Calidad Pty Ltd v Seiko Epson Corporation [2020] HCA 41 at 266.
[12] (2019) 139 IPR 199
[13] Article 4(2) of the Regulation on Community Designs (Council Regulation (EC) No. 6/2002)
[14] Article 8 of the Regulation on Community Designs
[15] Article 110 of the Regulation on Community Designs and Acacia Srl v Pneusgarda and another C-397/16; Acacia Srl and another v Porsche AG C-435/16
[16] Automotive Body Parts Association v. Ford Global Technologies, LLC No. 18-1613 (Fed. Cir. 2019). The design patents in question were for the hood and headlights used by Ford in its F-150 trucks.
[17] Section 122 of the Trade Marks Act 1995 (Cth)
[18] §33(b)(4), 15 U.S.C. § 1115(b)(4) Lanham Act (1946)
[19] WIPO (2013) ‘Exceptions and Limitations to Patent Rights: Private and/or Non-Commercial Use’, Standing Committee on the Law of Patents’ Twentieth Session, Geneva, January 27 to 31, 2014
[20] Hornick, J. (2015) ‘IP licensing in a 3D Printed World’, World Trademark Review, February 27, 2015