Natwest Bank launches IP lending scheme
Earlier this year Natwest Bank launched a new scheme to allow intellectual property to be used as collateral.
The long running ‘right to repair’/’spare parts’ saga took another interesting step forward with the recent Mars UK Ltd v Tecknowledge Ltd case – curiously, in the unlikely field of software.
Intellectual Property occupies an equivocal area of the law. Monopolistic protection is permitted, exceptionally, to preserve individual ownership rights and encourage innovation, but subject to a series of special limitations.
One well established limitation is the common law ‘right to repair’. IP cannot be used to prevent a legitimate purchaser of a protected product having that product repaired if it breaks down or wears, as long as the nature of the repair is not so extensive or unusual as to amount to ‘re-manufacture’.
The British Leyland case in the 1980s (British Leyland v Armstrong 1986 AC 577) extended this, by permitting manufacture of supplies of copied car exhaust systems in anticipation that they would be needed for repair purposes. This permission was given notwithstanding copyright protection for the exhaust systems, but the decision suggested that the position might not have been the same had there been statutory registered design protection. This case, and other disputes in the automotive industry, gave rise to the 1988 legislation which removed all protection in copyright and design law for ‘must fit’ and ‘must match’ spare parts.
Whilst going some way towards resolving the automotive spare parts issue, another problem which has remained is the question of what is a legitimate ‘repair’ rather than an unacceptable update or improvement. There are products which are of little value once they become outdated but could continue to be used if they were ‘repaired’ by modification. If this involves copying or rebuilding a protected part (i.e. a part which is not an excluded ‘must fit’ or ‘must match’ spare part), does this constitute infringement?
The Mars case was concerned with vending machine coin mechanisms which became outdated because they would not take new coins. The defendant decompiled the mechanism software and modified this to allow it to accommodate the new coins. Faced with the European Software Directive which allows decompilation for the purpose of producing separate ‘interface’ programs, and the British Leyland case which gave a right to make certain copies for repair purposes, the court could have decided on a ‘public policy’ basis that the defendants activities were legitimate. Bravely, it didn’t. The court held the activities of the defendant to be impermissible, as an infringement of copyright and database right, on the refreshingly simple and logical ground that the legislature could have expressly excluded such activities at European or national level, but didn’t. Despite common reference to the ‘spare parts’ exception, there is in fact no generalised right to ignore protection in this area, only a specific right of genuine repair which in the Mars case was not applicable.