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I’ITC part of opposition to potentially pivotal remanufacturing case

January 21, 2013

The US-based trade association teams up with two vehicle remanufacturing associations to oppose a case that could have “chilling” effects on all forms of remanufacturing in the USA.

Trucking Info reports on the case currently being held at the United States Supreme Court, in which a patent holder is fighting for the right to impose “post-sale restrictions on the use of its patented products”.

The case, Vernon Hugh Bowman v. Monsanto Company, et al., concerns the sale of soybean seeds to farmers, in which the seeds contain genetically-altered materials patented by the latter. The seeds were sold by the company “subject to a technology agreement”, which meant that replanting seeds grown from plants that came from the original seeds would be infringing the company’s patents.

The second-generation seeds could be sold to local grain elevators as a commodity however, and Vernon Bowman, who bought some second-generation seeds, planted them, and because he had not signed a technology agreement, he was of the belief that Monsanto “could not allege that he violated its technology agreement”.

However, Monsanto in turn argued that the prohibition imposed on the purchaser of the original seeds are applicable to all other users or buyers of said seeds, so Bowman is liable for patent infringement despite the fact he was not party to the original agreement. As the website notes, the case’s implications could “have long-reaching effects” on remanufacturers in all industries in the USA.

The idea of the “exhaustion” of such a first-sale doctrine under patent law has been part of patent law since the 20th century, and was previously brought to the Supreme Court in 2008, where it was upheld against the patent holder, but in this case the Federal Court of Appeals has ignored that earlier case and upheld the patent owners’ rights to “impose post-sale restrictions on all subsequent users”.

The implications of the case mean that a manufacturer of a patented product could “include restrictive language” in documents to “prevent certain uses of the product” as well as to “limit or deny the right of all subsequent owners of the product to resell, repair or refurbish that product”. In turn, any patent holder “could effectively dictate […] how, when and where the product could be used and reused”.

The Automotive Parts Remanufacturing Association (APRA), along with the Automotive Aftermarket Industry Association and the International Imaging Technology Council, has filed a “friend of the court brief” to ask the Supreme Court to overrule the Appeals Court’s ruling. APRA previously contested the 2008 efforts.

APRA’s General Counsel Michael Conlon added: “Allowing post-sale restrictions on the subsequent use of a patented product as an exception to the exhaustion doctrine could have a chilling effect on the remanufacturing industry.

“Any manufacturer of a patented product could impose these conditions in the small print of sales documents, which the original purchaser may never read and subsequent owners will never even see. If consumers, service facilities and remanufacturers are afraid of what unknown conditions might have been imposed on the use of a product, they will be very hesitant to risk a patent suit by selling, repairing or remanufacturing that product.”

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