From ‘Linear’ to ‘Circular’: The Challenge of Aligning Intellectual Property Rights with the ‘Right to Repair’

Intellectual property laws might hamper the right to repair, as well as the overall transition towards the circular economy.

Introduction

At some point in life, everyone has probably experienced going to an authorised repair canter to fix their four-year-old smartphone only to be told that it couldn’t be fixed because replacement parts were no longer available. Or, because the phone’s warranty had expired, fixing it would be so expensive that getting a new one would be a better choice. Stories like these are a daily occurrence and concern nearly all electronic devices, from computers to cameras, but also washing machines, refrigerators, and so on.

Obstacles to products’ repairability have been the subject of vibrant debate at the European level, culminating in a proposal finally published by the Commission at the end of last March (‘Right to Repair Proposal’ or ‘Proposal’).[i] Although the Proposal represents a big step towards in addressing repair obstacles, there are still many issues left unresolved, including those related to Intellectual Property Rights. (‘IPRs’).

In the way they are currently conceived and designed, IPRs act as obstacles to products’ repair. For example, manufacturers can inhibit the import of refurbished spare parts by applying (almost invisible) trademarks over them. Copyright protection on instruction manuals can also prevent the dissemination of repairing information. Additionally, repairing activities that involve the ‘reconstruction’ or ‘modification’ of patented products often entails patent infringement.

In this context, the Right to Repair Proposal represents a valuable opportunity to start rethinking IPRs to make them dialogue with the other legislative instruments. This alignment becomes particularly crucial in light of the EU’s goals to promote products’ reparability as part of its broader efforts to move from a linear to a circular economic system.

Why We Need to Move from a ‘Linear’ to a ‘Circular’ Economic System

Our current economic system follows a ‘take-make-use-dispose’ path, whereby with extracted resources new products are created and, once used, are disposed of as waste. However, as pointed out by the European Green Deal[ii],  such linear economic model is no longer sustainable, as it leads to unnecessary waste at all stages of the production and consumption chain, including energy loss, environmental degradation and imbalances between the supply and demand of natural resources.[iii] Therefore, now more than ever it urges to shift to a regenerative growth model ‘that gives back to the planet more than it takes.’[iv]

Circular economy has been defined by the World Economic Forum as restorative and regenerative-by-design, as it aims to keep the value of products within the production and consumption chain for as long as possible, while minimising the generation of waste.[v] In particular, circular economy is based on a number of activities aimed at reducing the resources leaking out of the circle, namely ‘reusing’, ‘redistributing’, ‘refurbishing’, ‘remanufacturing’, ‘repairing’ and ‘recycling’. Among these activities, this contribution focuses on the ‘repairing’.

Towards a ‘Right to Repair’

Currently numerous products – particularly technological devices – have a short lifespan and cannot be easily repaired.  This is due to several factors, including lack of availability of spare parts, inadequate or unavailable repair information, and planned obsolescence, which further decreases the lifecycle of products. This leads to an excessive use of resources for the manufacturing of new products and the disposal of old ones.

Against this backdrop, the introduction of a ‘Right to Repair’ emerged as one of the key initiatives for 2022, as announced in the Commission’s State of the Union letter in 2021.[vi] The legislative Proposal, ultimately released by the Commission on 23 March 2023 in the form of a Directive,  includes both a revision of the Sale of Goods Directive[vii] (‘SGD’)  to promote repairing during the legal guarantee and new provisions designed to encourage repairs beyond the seller’s liability.

The Right to Repair Proposal

The Proposal introduces an amendment to Article 13 of SGD providing that the consumer may opt for replacement only if it is less expensive than repairing the product, making latter the preferred remedy. Whereas to promote repairing beyond the legal guarantee, i.e., when the defect occurs or becomes apparent after the liability period, the Proposal establishes an obligation for producers to carry out repair outside the seller’s liability for products in relation to which repairability requirements are set by EU law, either against payment of a fee or free of charge as part of the commercial guarantee. To this extent, producers shall ensure that repairers have access to spare parts and repair-related information and tools.

Unsurprisingly, the Right to Repair Proposal does not provide any explicit guidance on its interaction with IPRs. For example, it fails to address the specific challenges that may arise when trademarks are affixed to spare parts, or when repair information or software embedded products are protected by copyright, or when single components are protected by a patent. However, for the Proposal to be effective, it is essential to determine the extent to which repairs can be provided by third parties without infringing IPRs.

IPRs: More Obstacles than Enablers to Repair and Circular Economy

The IP regime is designed to meet the needs of a linear economic model of production and consumption.[viii] In this sense, traditional IPRs serve multiple functions: first, as incentives to encourage innovation and the creation of new products; second, as exclusive rights that can prevent third parties from repairing, refurbishing, and remanufacturing marketed products; and third, as control rights that limit the reusing and recycling of discarded products.

For example, trademarks are often used by manufacturers to prohibit the import of replacement parts bearing the manufacturers’ registered trademarks or resembling the trademarked part.[ix] So, the first challenge when third parties engage in repair activities related to a part safeguarded by a trademark is to determine if there is an actual ‘use’ of the trademark that qualifies as infringement. In this regards, EU Courts have determined that not only ‘altering’ the trademark after the product’s introduction to the market, but also ‘removing’ or ‘erasing’ it before commercialization, constitutes trademark infringement, as such actions undermine the trademark’s role as an indicator of the product’s origin and quality.[x] Even once infringement is proven, difficulties arise also in determining whether a defence should be applicable.[xi] This involves assessing whether the rights granted by trademarks have been exhausted or, conversely, if the owner has legitimate reasons to object to further commercialisation of the protected product.[xii] In particular, the owner can still exercise its rights when the goods bearing the trademark have been altered or damaged. This is particularly relevant because the exhaustion doctrine, which allows for the resale of trademarked products once they have entered the market, might not apply in cases where substantial modifications are made during the repair process.

Similar concerns arise in relation to patents. As with trademarked products, repairing patented products is generally permitted under the exhaustion doctrine. However, activities involving ‘reconstruction’ or ‘modification’ entail patent infringement.[xiii] But – again – the line between ‘repairing’ and ‘reconstructing’ or ‘modifying’ is very difficult to define.  In the absence of a clear definition of the boundaries of permitted repairs, it is left to national courts to decide which activities involving a patented product can be conducted by third parties and which ones are prohibited, often with controversial outcomes. Adding to the complexity, legal repairing of patented products is limited to their ‘normal lifespan’, which is a very narrowly defined concept. Currently, there is no legislative definition of what the normal life cycle of products is, with the consequence that its determination is left to patent holders.[xiv]

Finally, copyright protection over instruction manuals, guides, and schematics may prevent the unauthorised copying and spreading of repair information.[xv] In addition, electronic consumer devices often contain a software, which may be subject to copyright protection. Such protection may create obstacles to repair when it entails some ‘alterations’ or ‘modification’ of copyrighted software contained within the software-embedded products, potentially leading to the creation of a new object. [xvi] Also in this case the applicability of the exhaustion doctrine becomes intricate: questions arise whether such activities fall within the boundaries of the exhaustion doctrine or infringe upon the copyright holder’s exclusive rights to control derivative works.

Some Concluding Remarks

In order to be effective, the right to repair requires a regulatory framework capable of introducing appropriate incentives for all stakeholders involved. IPRs represent a fundamental part of this framework, particularly for the role as drivers of industrial development which they traditionally perform. However, to avoid being a barrier to the implementation of the Right to Repair Proposal and, more generally, to the transition towards circular economy, they might need to be reshaped.

Potential solutions encompass existing instruments within the EU legal system, such as the exhaustion doctrine, to evaluate the potential expansion of their interpretation beyond distribution rights, particularly in relation to repair activities. If found inadequate, the feasibility of introducing specific exceptions to IPRs exclusively for repair purposes should be considered, taking into account the potential risk of further fragmentation within the EU IP landscape.

This article is part of the thesis project, which has benefited from the comments and feedback received during the visiting period conducted at the University of Helsinki from April to June 2023.

[i] Proposal for a Directive of the European Parliament and of the Council on common rules promoting the repair of goods and amending Regulation (EU) 2017/2394, Directives (EU) 2019/771 and (EU) 2020/1828 of 2023 COM(2023) 155 final (‘Right to Repair Proposal’).

[ii] Commission, ‘The European Green Deal’, COM(2019) 640 final.

[iii] Gustavo Michelini and others, ‘From Linear to Circular Economy: PSS Conducting the Transition’ (2017) 64 Procedia CIRP 2.

[iv] Commission, ‘A new Circular Economy Action Plan For a Cleaner and more Competitive Europe’ COM(2020) 98 final.

[v] ‘The Economy of the Future is Circular. Here’s How Entrepreneurship Can Help’ (World Economic Forum, 22 October 2019) <https://www.weforum.org/agenda/2019/10/innovation-entrepreneurship-waste-circular-economy/> accessed 26 April 2023.

[vi] European Commission, ‘State of the Union 2021 Letter of Intent’ (15 September 2021).

[vii] Directive (EU) 2019/771 of the European Parliament and of the Council of 20 May 2019 on certain aspects concerning contracts for the sale of goods, amending Regulation (EU) 2017/2394 and Directive 2009/22/EC, and repealing Directive 1999/44/EC Text with EEA Relevance [2019] OJ L 136/28.

[viii] See Annette Kur and Irene Calboli, ‘Intellectual Property in the Circular Economy’ (2023) 18 J. Intellect. Prop. Law Pract. 337.

[ix]    Leah Chan Grinvald and Ofer Tur-Sinai, ‘Intellectual Property Law and the Right to Repair’ (2019) 88 Fordham L. Rev. 64, 117.

[x] Christopher Heath, ‘Remarks on the so-called ‘Right to Repair’’, Excerpt from HEATH/FURUTA, comments on two Japanese decisions, ZJapanR (forthcoming 2023).

[xi] Annette Kur, ‘“As Good as New” – Sale of Repaired or Refurbished Goods: Commendable Practice or Trade Mark Infringement?’ (2021) 70 GRUR Int. 228.

[xii] Article 15 of Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union trade mark [2017] OJ L 154/1.

[xiii] Christopher Heath, ‘Exhaustion and Patent Rights’in Okediji R L and Bagley M A eds. Patent Law in Global Perspective (1st edition, Oxford University Press 2014) 437.

[xiv] Taina Pihlajarinne, ‘Repairing and Re-Using from an Exclusive Rights Perspective: Towards Sustainable Lifespan as Part of a New Normal?’ in Rognstad O-A and Ørstavi I eds.  Intellectual Property and Sustainable Markets (Edward Elgar Publishing 2021).

[xv] See Anthony D. Rosborough, ‘Zen and the Art of Repair Manuals: Enabling a Participatory Right to Repair through an Autonomous Concept of EU Copyright Law’ (2022) 13 J Intell Prop Info Tech & Elec Com L 113.

[xvi] See Taina Pihlajarinne and Rosa Maria Ballardini, ‘Paving the Way for the Environment – Channeling ‘Strong’ Sustainability into the European IP System’ (2020) 42 EIPR 239.

Kuva: iStock/Galeanu Mihai