Market Insights

Sparing a thought for intellectual property

This is a guest article by Jason Teng of IP law firm, Potter Clarkson.

With the rapid rise of the additive manufacturing sector, it has become increasingly possible for industry players to make spare and replacement parts in a cost-effective manner. What’s more, the sector lends itself especially well to the fabrication of parts for the customisation of existing products and equipment. As such, all parties in the supply chain need to be acutely aware of the very real risks of IP infringement in this evolving space, says Jason Teng, partner and patent attorney at leading full service IP law firm, Potter Clarkson.

As things stand, different considerations apply depending on the type of IP rights covering a particular part or a complex product that includes the part. For instance, the manufacture of a whole patented product would normally constitute patent infringement, unless certain exceptions apply such as private non-commercial use. On the other hand, the manufacture of a spare/replacement part for incorporation into a patented product could either constitute an infringing “making” of the patented product or a non-infringing “repair”, which would vary on a case-by-case basis. On this note, some guidance can be found in a 2011 Supreme Court decision in the Schütz v Werit case.

When it comes to design protection, whether the making of a spare/replacement part would constitute infringement depends on whether the part is used to restore the original appearance of a complex product, sold as an independent product for non-repair purposes, or used to customise/modify the appearance of the complex product. The former is exempted from infringement, but the latter two are usually not. The scope of infringement as applied to spare/replacement parts for the automotive industry was the subject of a recent December 2017 decision by the CJEU based on referrals from cases of Acacia v. Audi and Acacia v. Porsche, which could have analogous implications for the additive manufacturing sector.

Also, certain spare/replacement parts may not be eligible for design protection due to statutory exceptions, such as features falling under the “must fit” and “solely dictated by technical function” exclusions. The “must fit” exclusion applies to features which must necessarily be reproduced in their exact form and dimensions to enable an article to be connected to another article in order for either article to perform its function, while the “solely dictated by technical function” exclusion relates to features where the technical function is the only factor that determined those features.

What’s more, infringement issues may be different for other types of IP rights, such as trade marks and copyright, and the infringement risks and available exemptions may be different for consumers, manufacturers, and distributors/sellers.

It is important to be aware that IP laws can vary across different jurisdictions. For example, any act of making a spare/replacement part considered to be exempted from infringement in one jurisdiction may not necessarily be exempted in another. This has particular relevance when it comes to sharing digital files, or selling spare/replacement parts, across borders.

So, what proactive steps can industry players looking to minimise the risk of IP infringement take? As a bare minimum, they should undertake clearance searches to determine what IP rights (if any) exist, seek licenses from IP rights holders, or make completely sure that their activities fall within exemptions provided by the law.

Furthermore, the increasing affordability of 3D printing technology to smaller players brings about issues when it comes to IP rights. Whilst there are usually statutory exclusions for private non-commercial use of IP-protected innovations, it is not straightforward to determine where the line is drawn between acceptable private non-commercial use and IP infringement. An analogy can be found in the music industry where piracy is rife. For example, it is a common misunderstanding that a consumer is free to do as they like with purchased music, such as copying and distributing, when in fact certain limitations will apply. This is particularly relevant due to digital files being an essential element of modern additive manufacturing.

In reality, all of this background appears to beg the obvious question; do IP rights boost, or form a barrier to, innovation when it comes to spare parts and customisation in the additive manufacturing sector?

On the one hand, with some eye-watering estimates in circulation as to the potential annual global IP losses from additive manufacturing, robustly enforcing your IP rights could be seen as an obvious route to increased profits. On the other, an overzealous approach to enforcement could backfire in terms of marketability, especially in a sector where an open-source approach can be crucial for technology adoption.

As with many daily business challenges, occupying the middle ground on the issue is often the most sensible approach. In practice, this means IP rights holders striking a balance between enforcing their IP rights to protect their commercial position from competitors and effectively marketing their products & services to end users.

Ultimately, the current IP framework may prove ill-equipped to deal with challenges that additive manufacturing might force industries to face over the years and months ahead. As such, instead of applying traditional IP strategies to the additive manufacturing sector, there could well be a need to develop new IP commercialisation models, perhaps through an innovative licensing mechanism. Consumers, manufacturers and distributors alike should be watching this space with interest.

More information about Potter Clarkson is available online.

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Featured image shows Jason Teng of Potter Clarkson.