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Court Recognizes Right to “Repair” a Patented Product Even If It Is Not Broken

00-1356
September 05, 2001

Decision icon Decision

Last Month at the Federal Circuit - October 2001

Judges: Newman (author), Mayer, and Rader

In Surfco Hawaii v. Fin Control Systems Pty, Ltd., No. 00-1356 (Fed. Cir. Sept. 5, 2001), the Federal Circuit reversed the District of Hawaii’s SJ in favor of the owner of a patent on a surfboard with removable fins, granting SJ instead to its competitor to continue selling replacement fins for the patented surfboard.

Fin Control Systems Pty, Ltd. (“Fin Control”) patented a “surf craft” with releasable fins. The patent describes a surfboard whose fins releasably attach to the board by inserting tabs on the fins into openings in the surfboard and securing the fins to the board with screws. Surfco Hawaii (“Surfco”) made and sold fins to use on Fin Control’s surfboards that were distinguished solely by their rubber edges, which Surfco promoted as a safety feature. Surfco brought a DJ action in the U.S. District Court of Hawaii seeking SJ that its replacement fins were akin to a “permissible repair” by surfboard owners and, therefore, not infringing.

Fin Control argued that Surfco’s products could not be a “repair,” because the original fins were in good working condition and did not need to be replaced. The district court agreed with Fin Control that, because Surfco’s fins were not sold for “repair” of worn or broken fins, but were sold instead for safety reasons, Surfco had created an incentive for surfboard owners to replace unworn fins and was liable for contributory infringement and inducing infringement.

The Federal Circuit observed that because the first sale of a patented product exhausts a patent owner’s right to control disposition of a product after a sale, a purchaser of the product may lawfully replace unpatented components of the product so long as it does not result in making a new article that infringes the patent.

The Court stated that although the extension of the useful life of an article is the usual reason for modification or replacement of components, it is not the only reason. It recognized that the purchaser of a patented product has a right to replace or modify an unpatented component for any reason, not just for repairing a worn or broken part, so long as there is not a “reconstruction” that creates a new article.

Against this background, the Court ruled that in this case, substitution of different fins does not “recreate” the patented surfboard and, therefore, an owner who modifies a surfboard by substituting the Surfco fins does not infringe. Because a purchaser of a Fin Control surfboard may replace its fins regardless of whether they are broken or worn without infringing the patent, Surfco’s sale of replacement fins can be neither an inducement of infringement nor contributory infringement.