When does modification extinguish an implied licence?.


Case: Seiko Epson Corporation v Calidad Pty Ltd [2017] FCA 1403.

A patent confers certain rights upon the patentee. Usually, the purchaser of a patented article can dispose of that article in any way. The purchaser has an “implied licence” to do so.

Seiko sells printer cartridges covered by an Australian patent. A Malaysian company, Ninestar, refurbishes the printer cartridges. Calidad imports the refurbished printer cartridges.

Seiko sued Calidad for infringement. Calidad argued that its purchase of patented cartridges gave it an implied licence. Seiko argued that the extent of refurbishment resulted in a different printer cartridge to that which was originally purchased by Ninestar.

The original cartridges included integrated circuitry. The integrated circuitry was removed and replaced during the refurbishment.

The Court held that the refurbished printer cartridge was not the same article as that purchased by Ninestar. But the refurbished cartridge was still covered by the patent. It found that there was patent infringement by Calidad.

Burley J. set out a three-stage factual enquiry:

  1. What is the scope of the invention as claimed in the patent?
  2. What is the manner in which the patentee’s product is an embodiment of the invention as claimed?
  3. To what extent do the modifications made affect the patented product insofar as it represents an embodiment of the claims?