In its November 8 ruling the Court said that the sale of recycled ink cartridges imported by Recycle Assist contained elements of an invention patented by Canon.
Canon said in a statement that it was “pleased with the Supreme Court’s decision and believes it to be highly appropriate”.
Recycle Assist had been filling used Canon printer cartridges with ink, importing them into Japan and selling them to consumers, cutting into the printer-maker’s lucrative cartridge sales business.
The judgment of the Grand Panel of the IP High Court in January 2006 overturned a December 2004 decision by the Tokyo District Court, which said that filling old cartridges with ink amounted to a repair. Therefore, said the District Court, there had been no patent infringement.
The IP High Court set out two situations where an assigned patent is not exhausted. First, when the product is reused or recycled after it has finished its service. Secondly, when a third party has modified or replaced “whole or part of the components that constitute an essential portion of the marketed product”.
Although the Supreme Court has upheld the verdict, lawyers close to the case have told MIP Week that it has changed the reasoning.
Masakazu Iwakura, the Nishimura & Partners lawyer who represented Canon during the appeal, described the IP High Court’s reasoning as “a little vague”. Iwakura said that the Supreme Court had instead reasoned that if a defendant is deemed to have newly produced the patented product by making various additions to recycled products then it is patent infringement.
“I think the recycling industry is a little bit shocked because the Court accepted all our arguments,” said Iwakura.
But Tsuyoshi Nishimoto, an associate for Hibiya Park Law Offices, who acted for Recycle Assist, said the Supreme Court’s reasoning was closer to that of the original District Court decision. “We generally agree with the rule, but don’t agree with the finding of fact in this case,” he said.
Nishimoto also said that the recycling business had already adapted to the IP High Court ruling and so will not be affected by the Supreme Court decision.
