Company A v Company B [2000] UKHL 42

Factual and Procedural Background

Company A is the proprietor of two United Kingdom patents covering improved sifting screens used to recycle drilling fluid in offshore oil-drilling. Each patented screen comprises a rigid metal frame and two superimposed mesh layers of different mesh size that are adhesively bonded to the frame at differential tensions to prevent clogging.

The mesh layers are prone to tearing in use, whereas the metal frame remains serviceable. Company B acquired worn screens from Company A’s customers, removed the old meshes, stripped the frame to bare metal, applied fresh adhesive, attached new coarse and fine meshes, and sold the refurbished assemblies—crediting customers for the returned frames.

Company A sued for infringement. At first instance, Judge Walker—relying on Solar Thomson Engineering Co. Ltd v Barton—found that Company B’s conduct amounted to permissible repair under an implied licence. The Court of Appeal (Judges Evans, Aldous and Ward) overturned that decision, holding that Company B had “made” the patented product and thus infringed. Company B appealed to the House of Lords, which delivered the present judgment.

Legal Issues Presented

1. Whether Company B’s replacement of the mesh layers constituted mere “repair” or amounted to “making” the patented product within section 60(1)(a) of the Patents Act 1977.
2. Whether the initial sale of the patented screens impliedly licensed subsequent owners to perform the reconditioning work or exhausted Company A’s patent rights.

Arguments of the Parties

Plaintiff's Arguments

• The patented “screen assembly” is the combination of frame and pre-tensioned double mesh; removing the meshes destroys the patented article.
• By attaching new meshes, Company B manufactures a new patented product and infringes section 60(1)(a).
• No express or implied licence authorised third parties to make new screens; the patentee’s rights were not exhausted by the first sale.

Defendant's Arguments

• The sale of the screens carried an implied licence allowing owners to repair and prolong their life.
• Company B’s activities were repair, not manufacture; therefore section 60(1)(a) was not engaged.
• The patentee’s rights were exhausted upon first sale, preventing any infringement claim.
• The Court of Appeal should not have disturbed the trial judge’s fact-based assessment.

Table of Precedents Cited

Court's Reasoning and Analysis

• Judge Hoffmann (with Judges Bingham, Steyn, Cooke and Hutton concurring) stated that the central question is whether Company B “made” the patented product; notions of implied licence or exhaustion are irrelevant to that inquiry.
• The patented article is the frame plus the bonded meshes. Once the meshes are removed and the frame stripped, the patented product no longer exists; only a component remains.
• Company B’s process—cleaning the frame, applying adhesive, bonding new meshes, and trimming—creates a new patented screen in the same way it would if the frame had been purchased from a third-party supplier.
• The right to repair is merely the residual right to act in ways that do not constitute making; it is not an independent licence.
• The Court of Appeal correctly identified the product and was therefore entitled to substitute its own evaluative judgment for that of the trial judge.

Holding and Implications

APPEAL DISMISSED. The House of Lords affirmed the Court of Appeal’s decision, holding that Company B infringed Company A’s patents by making new screen assemblies.

Implications: The ruling clarifies the boundary between repair and manufacture under section 60(1)(a) of the Patents Act 1977. Replacing consumable elements that embody essential features of the invention constitutes making a new patented product, not repair. The judgment limits the scope of implied licence to genuine repair and confirms that first sale does not exhaust the patentee’s right to prevent the fabrication of new embodiments of the invention.