To: Managing Director, MotoPhoto
From: In-house Counsel
Date: 26 October 2023
Re: Potential Patent Infringement Claim by Kodak Camera
## **Introduction and Summary of Advice**
You have requested a legal opinion regarding a potential claim of patent infringement by Kodak Camera (“Kodak”) against our company, MotoPhoto. The claim relates to our business of refurbishing and reselling Kodak’s patented single-use cameras. This opinion will outline the relevant legal principles under the law of England and Wales and apply them to our activities.
In summary, it is my opinion that Kodak’s allegations are unlikely to be substantiated in court. Our activities of opening the cameras, replacing the film, and reselling them are likely to be considered permissible repair rather than an infringing act of “making” a new camera. Our position is supported by the legal doctrine of exhaustion of rights, which limits a patent holder’s control over a product after it has been sold. However, there is an element of risk, as the outcome of any litigation can be uncertain.
This opinion will now analyse the matter in detail using the Issue, Rule, Application, and Conclusion (IRAC) framework.
## **I. Issue**
The central legal issue is whether MotoPhoto’s business practice of refurbishing and reselling Kodak’s patented single-use cameras constitutes patent infringement under the UK Patents Act 1977.
Specifically, the question is twofold:
1. Does the doctrine of “exhaustion of rights” apply to the cameras we acquire from consumers?
2. If so, do our refurbishment activities constitute permissible “repair” of the camera, or do they cross the line into impermissible “making” of a new patented product, which would be an act of infringement?
## **II. Rule (The Law)**
### Patent Infringement
In the United Kingdom, patent infringement is governed by the Patents Act 1977 (“the Act”). Section 60(1)(a) of the Act states that a person infringes a patent for a product if, without the consent of the patent proprietor, they “make, dispose of, offer to dispose of, use or import the product or keep it whether for disposal or otherwise”.
The key term for our purposes is “make”. Kodak alleges that by refurbishing the cameras, we are unlawfully “making” their patented device.
### The Doctrine of Exhaustion of Rights
The scope of a patent holder’s rights is not unlimited. A crucial limitation is the doctrine of exhaustion of rights. This principle holds that once a patent holder (or someone with their consent) has sold a patented product, the patent rights concerning that specific item are “exhausted”. The new owner of the item is then free to use, resell, or dispose of that item as they see fit without it being an infringement of the patent (Betts v. Willmott, 1871). The patent holder cannot use their patent to control the downstream market for that specific article once it has been placed on the market.
For example, if you buy a patented television, the manufacturer cannot use its patent to stop you from selling that television to a friend. Your friend can also repair it if it breaks. The exhaustion doctrine, therefore, permits the resale and repair of patented goods.
### The Repair vs. Making Distinction
The exhaustion of rights does not, however, give the owner the right to “make” a new version of the patented product. This leads to the critical distinction between permissible repair and impermissible making. The leading authority on this distinction in UK law is the House of Lords case, *United Wire Ltd v Screen Repair Services (Scotland) Ltd* (2001).
In *United Wire*, the defendant repaired worn-out screening assemblies (used for sifting oil drilling debris) by replacing the mesh, which was a key part of the patented item. The patent holder claimed this was an infringing act of “making”. The House of Lords disagreed and found the activity to be a non-infringing repair.
Lord Hoffmann, giving the leading judgment, clarified the law. He stated that the question is a matter of fact and degree. There is no single test, but the core question is whether the work done by the defendant results in the creation of what is, in substance, a new article. He explained that “the notion of repair is a broad one” and can include replacing worn or broken parts. He rejected the idea that replacing an “essential” or “inventive” part automatically amounted to making the product anew. Instead, it depends on the nature of the product. The Court will look at the whole of what the defendant has done. If the defendant’s work leaves the identity of the original article intact, it is likely to be a repair. If the work effectively destroys the old article and creates a new one, it is likely to be an infringing act of “making”.
## **III. Application**
We must now apply these legal principles to MotoPhoto’s specific activities.
### Application of Exhaustion of Rights
Kodak sells its single-use cameras directly to consumers. This initial sale, made with Kodak’s consent, places the patented articles onto the market. At this point, Kodak’s patent rights in those specific camera units are exhausted. The consumer who buys the camera becomes its owner and can lawfully dispose of it as they wish. This includes sending the used camera to us for processing. Kodak cannot, therefore, use its patent to prevent us from acquiring the used cameras from consumers or from subsequently reselling those specific cameras. The primary issue is not the buying and selling, but what we do to the cameras in between.
### Applying the Repair vs. Making Test from *United Wire*
The dispute with Kodak will centre on whether our refurbishment process is a “repair” or “making”. Kodak will argue that because their product is marketed as a “single-use” camera, any process that enables a second use is effectively creating a new product. We will argue that we are simply repairing and servicing an existing product.
Let’s analyse our process in the light of the *United Wire* principles:
1. **Opening the camera:** This is a necessary step to access the film. The damage caused is incidental to the primary service of developing the film.
2. **Replacing the film:** Film is a consumable item. It is not part of Kodak’s patented invention, which is the camera mechanism itself. Replacing a consumable is a classic example of servicing, not remaking a product.
3. **Resetting the film counter:** This is an ancillary step to replacing the film, making the camera functional again.
4. **Fixing the damage from opening and cleaning:** This action is restorative. We are repairing the casing to return the camera to its previous functional and aesthetic state. This strengthens the argument that our work is a repair.
Our argument is that the core identity of the camera—the patented mechanism including the body, lens, and shutter—remains intact throughout our process. We do not replace these core components. We are merely replacing a non-patented consumable (the film) and making good the damage required to do so. This falls squarely within the concept of repair as described by Lord Hoffmann in *United Wire*. The purpose of our actions is to restore the product to a functional state.
Kodak’s counter-argument would be that the “single-use” nature of the product is an essential characteristic. By enabling a second use, we are defeating the purpose of their design and, in effect, creating a new multi-use camera. However, this argument is weak under UK law. The *United Wire* case moved away from complex analyses of the “inventive concept” and towards a more practical assessment of what is physically being done. A patent protects a specific apparatus; it does not give the patentee the right to control how that apparatus is used or serviced after sale, nor does it protect a business model (such as selling lots of single-use items). The fact that Kodak calls it “single-use” is a marketing decision, not a legal shield against repair.
Therefore, on balance, our activities are far more analogous to the permissible repair in *United Wire* than to an infringing act of making a new product. We are preserving the identity of the original article and simply enabling it to be used again.
## **IV. Conclusion**
While Kodak can threaten legal action, their claim of patent infringement appears weak based on the current state of UK patent law.
The doctrine of exhaustion of rights allows us to acquire and resell the cameras. The central question is whether our refurbishment constitutes repair or making. Based on the leading authority of *United Wire Ltd v Screen Repair Services (Scotland) Ltd*, our actions of replacing the film, resetting the counter, and repairing the casing are very likely to be viewed by a court as permissible repair. We are not creating a new camera but are servicing an existing one by replacing a consumable component.
**Recommendation:** We should feel confident in defending our position if Kodak decides to pursue legal action. However, litigation is costly and time-consuming. It may be prudent to prepare a formal legal response to Kodak outlining our position, with reference to the case law, in the hope of resolving the matter without going to court. We should continue our business practices as described, but ensure our refurbishment process remains strictly limited to the current steps.
***
**Disclaimer:** This opinion is based on the facts provided and the current law of England and Wales. The outcome of any legal proceedings cannot be guaranteed.
## **References**
Betts v. Willmott (1871) LR 6 Ch App 239.
Patents Act 1977, c. 37.
United Wire Ltd v Screen Repair Services (Scotland) Ltd [2001] RPC 24 (HL).
