Lawyer give his customers signed a contract in the document. Consulting in regard to the various contracts

Repair or remake? Australia’s position on patent rights after sale

Malcolm Campbell ||

Most people think that when they buy a good, they wholly own that good and are free to do what they want to it or with it. That’s not always correct in Australia.

We all know that after a purchase, we have an ongoing relationship with the manufacturer or seller of the goods who must repair or replace a good that is not fit for purpose or breaks within a certain period of time. But other than fixing our goods by using authorised replacement parts, we tend to think everyone else’s claim to that good is exhausted. Not so in Australia, but maybe that is about to change.

Since at least 2017, the position in the United States has been very clear: “a patentee’s decision to sell a product exhausts all of its patent rights in that item, regardless of any restrictions the patentee purports to impose or the location of the sale’ (meaning it doesn’t matter if the first sale is in the US or overseas, the US rights are exhausted on sale). It takes the same position with goods in which copyright is protected.

In Australia, the answer to the question, can I repair my tractor or vehicle by replacing a part with a new version of the same part without infringing someone’s potential IP rights is typically yes (note manufacturer’s warranties are different and may require authorised parts).

But the answer to the question, can I take an engine and make a barbecue out of it, is ‘not necessarily’ yes because the IP owner’s rights in Australia are not exhausted on sale. Instead you are granted an ‘implied’ licence to use the goods within any restrictions the manufacturer, owner or seller places upon it.

That’s why there has been years of litigation about patented printer cartridges, where an entity that did not initially manufacture the cartridge, drilled a hole in the side, refilled it with ink, filled the hole and then resold the printer cartridge with either the same chip or a reworked chip that controls the cartridge’s work in the printing process.

In Australia, the current law is that when you purchase a good or service in which any intellectual property rights are vested, you are granted an ‘implied licence’ to use the good and related intellectual property. A licence is different to the US exhaustion of rights. The implied licence gives the IP owner a continued connection with the goods that may enable that person to limit the way they use the good or service purchased. However, a long running Australian case may change that – we are hoping the Australian High Court will take the opportunity to give a clear position, as has the US Supreme Court (it would not be too much of a stretch to suggest our High Court decided to take on the appeal in order to have the opportunity to tell us what the law on exhaustion of rights should be).

So, if you intend to ‘power up’ your tractor, you might need to think twice.

If you have any questions relating to any of the information in this blog or you require assistance, please do not hesitate to get in touch with a member of Coleman Greig’s Intellectual Property team, who would be more than happy to assist you.


Send an enquiry

Any personal information you provide is collected pursuant to our Privacy Policy.


More posts

Understanding roles in the strata scheme

A strata scheme is a building or group of buildings that have been divided into lots which can be apartments, villas, offices, units or townhouses. This will be articulated in the strata plan.

Can i put my home on Airbnb?

Airbnb is a form of short-term rental accommodation. To add your property to Airbnb in NSW, you are required to meet several laws and regulations governing short-term rentals.

When are liquidators required to seek approval to retain legal counsel?

When does a liquidator (or the company he or she is appointed to) need court, creditor, or committee approval to validly retain a solicitor to act in a liquidation matter which is likely to extend for longer than three months?  The answer to this question has only recently been settled.

Proposed changes to building and construction law in NSW

The Building Bill 2022 (the Bill) is the key avenue through which the NSW Government has proposed to reshape the culture of the building and construction industry by eliminating poor performance and improving the quality of building statewide.

Can you dismiss an employee who fails to return to the office?

Slowly but surely, most employers are requiring employees to return to the office for at least a portion of their working week. Some employers continue to struggle with employees resistant to returning to the office or those who have an expectation that they can continue to work from home whenever it suits them.

New powers to combat phoenixing in construction

The rise of phoenixing in the building and construction industry in Australia in recent years has proved a significant challenge to regulators. Mismanagement of time or cashflow can quickly propel businesses into insolvency.

The NSW Building Commission’s extraordinary powers

In late 2023, the NSW Government passed the Building Legislation Amendment Bill 2023 (Amendment Bill). The Amendment Bill established the NSW Building Commission and granted it extraordinary powers to enter construction sites, inspect work and take away information and materials.

© 2024 Coleman Greig Lawyers   |  Liability limited by a scheme approved under Professional Standards Legislation. ABN 73 125 176 230