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Sale of Replacement Part Does Not Lead to Infringing Reconstruction

May 17, 2002

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Last Month at the Federal Circuit - June 2002

Judges: Dyk (author), Michel, and Lourie

In Husky Injection Molding Systems Ltd. v. R&D Tool & Engineering Co., No. 01-1346 (Fed. Cir. May 17, 2002), the Federal Circuit ruled that contributory infringement of a patent did not result by selling a replacement part for a machine covered by a patent where the part to be replaced was readily replaceable.

Husky Injection Molding Systems Ltd. (“Husky”) is the assignee of U.S. Patent No. Re 33,237 (“the ‘237 patent”) directed to an injection-molding machine, and Husky manufactures and sells such machines. Among the parts of this machine are a mold and a carrier plate, neither of which is patented by itself. The molding machine produces plastic preforms whose design is dictated by the shape of the mold and carrier plate. Customers can change the preform design by buying a substitute mold and corresponding carrier plate. Both Husky and R&D Tool & Engineering Company (“R&D”) make and sell such substitute molds and carrier plates. Alleging that R&D’s sale of substitute mold and carrier plate combinations constitutes contributory infringement, Husky sued R&D.

The trial court had focused on whether substitution of a new mold and carrier plate combination for an unspent combination constituted reconstruction, which is impermissible conduct, or repair, which is permissible conduct. The district court had reasoned that R&D’s sale of the mold and carrier plate combinations was more akin to repair than reconstruction, even though the new combinations produced a preform design different than that produced by the original mold and carrier plate. Accordingly, the district court granted SJ of noninfringement.

On appeal, the Federal Circuit affirmed. Addressing the issue of when the permissible repair exception applies, the Court reviewed its precedents and identified three distinct scenarios. In one scenario, the entire patented item is spent, and the alleged infringer reconstructs it to make it useable again. According to the Court, such reconstruction is impermissible. In the second scenario, a spent part is replaced. According to the Court, such repair is permissible no matter how essential that part may be to the patented combination. In the third scenario, described by the Court as “akin to repair,” a part of a machine is not spent but it is replaced to enable the machine to perform a different function. Such replacement, according to the Court, is also permissible.

The Court rejected Husky’s argument that the owner of a patented combination has no right to voluntarily replace an unspent part unless there is a valid public policy justification for the replacement, such as increased safety.

Applying its legal conclusions to the facts of this case, the Court found no question that the particular parts at issue were “readily replaceable” because the design of the machine allowed replacement of the mold and carrier plate. Typical customers would replace the mold and carrier plate after three to five years in order to change the preform design, and Husky itself sold such substitute molds and carrier plates. Accordingly, the Court concluded that Husky’s customers did not directly infringe the ‘237 patent by replacing the molds and carrier plates, and, therefore, R&D did not contributorily infringe.