Jazz Photo Corp. v International Trade Commission
264 F.3d 1094 (Fed. Cir. 2001)
Fuji made disposable cameras
that were meant to be used for one roll of film and then thrown away when
the film was developed.
This was back in the day
before digital when film needed to be sent in to a photo lab to be
37 companies, including Jazz
Photo were buying up bins of used disposable cameras from photo labs in
the US, taking them apart in overseas facilities, adding a fresh roll of
film and new batteries, and reselling them in the US as 'refurbished'
Fuji sued Jazz Photo et al
under the Tariff Act of 1930 (18
U.S.C. §1337) for infringement
of 15 different patents.
Jazz Photo et al argued that
they were simply repairing the
cameras, and that repairing a patented product is by definition non-infringing.
See Aro Manufacturing
Co. v. Convertible Replacement Co.,
(377 U.S. 476 (1964)) which held that a purchaser of patented goods
obtains an implied license to repair the goods, so those that sell
replacement parts are not contributory infringers.
Fuji argued that what Jazz
Photo et al were doing went beyond repair and was reconstruction, (it was essentially a new product) so they were not protected
The International Trade
Commission found that 26 of the companies had infringed on Fuji's patent. They appealed.
The Appellate Court reversed.
The Appellate Court looked
to a whole bunch of cases (like Mitchell v. Hawley (83 U.S. (16 Wall.) 544 (1872))) and found
that it is well established that once sold, a product is no longer
specifically protected by patent laws.
That includes the right to repair.
It does not include the
right to make an entirely new product by reproducing all of the
individual parts (See e.g. Wilson v. Simpson (50 U.S. (9 How.) 109 (1850)).
The Court found that the
difference between repair and reconstruction was when the patentee "exhausts" the
Basically, the first
sale doctrine says that a patentee
recoups all their profits in the "first sale" and subsequent
sales of the product (like people buying used items at a flea market)
don't count as patent infringement.
The Court found that since
the refurbishment didn't replace any patented components, it was more
like a repair than a reconstruction and so the first sale doctrine applied.
Fuji unsuccessfully argued
that since the cameras were meant to de disposable, after they'd been
used once their useful life had been spent, and that the refurbished
cameras were essentially a new product, so the first sale doctrine doesn't apply.
The Court found that just
because Fuji said the cameras shouldn't be reused, that didn't mean that
their useful life ended after the first use. The cameras could
obviously be used more than once.
The Court noted that in
order to exhaust the US patent,
that first sale must occur
in the US. So if there was a disposable camera sold in Japan and then
refurbished in Japan, that camera could not be sold in the US.
This doctrine of
international exhaustion is still in
debate in US courts.