Refill, reuse, recycle: New Supreme Court decision implicitly includes sustainability in a much-anticipated ruling on a fundamental doctrinal impacting patent law — intellectual property

Australia: Refill, reuse, recycle: New High Court decision implicitly includes sustainability in much-anticipated ruling on fundamental doctrinal impacting patent law

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The High Court recently clarified that post-sale IP exhaustion law in Australia is the same as in the US.

In summary, Seiko has (collectively) filed a case in the Australian Federal Court alleging Calidad infringed its patent rights on printer cartridges. In particular, taking used Epson printer cartridges, drilling a hole in the page and refilling them with ink (and in some cases providing a modified chip to communicate with the printer) is said to be an infringement of the patent owner’s rights.

Calidad eventually appealed, asking the High Court to rule that in cases of this nature a doctrine that a patentee’s statutory monopoly rights to use and sell a product are exhausted upon the first sale of that product (the ” exhaustion doctrine”) should be applied in place of the existing “implicit license” doctrine.

The practical question for the court was whether the drilling and refilling modifications made to the product to enable its reuse: a manufacture of a new product thereby infringing the exclusive rights of the patentee on that basis.

The High Court held that the modifications to the original Epson cartridges did not constitute improper manufacture of a new product and that the exhaustion doctrine should be accepted, which overturns a decades-old “tacit license doctrine”. The refilled and restored cartridges were simply modified versions of the products sold by Seiko. The changes were within the rights of an owner of chattel to extend the life of a product and make it more useful.

What that means in practice

This means that in the future it should no longer be an injury to repair or modify a product – previously this was more of a gray area. There are likely many other uses for existing products that could not be reinvented commercially due to the risk of patent infringement. While the High Court is unlikely to have recognized or been motivated by the sustainability issue, the Court’s acknowledgment of employing an exhaustion doctrine will provide a pathway for the innovation of existing products that can ultimately help reduce waste.

The content of this article is intended to provide a general guide to the topic. Professional advice should be sought in relation to your specific circumstances.

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