Jazz Photo Corp. v. International Trade Commission
264 F.3d 1094 (2001)
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Rule of Law:
The refurbishment of a patented article, which was first sold in the United States without restriction, constitutes permissible repair and not infringing reconstruction when it involves replacing unpatented, spent components to preserve the article's utility, even if the patentee intended the article for a single use.
Facts:
- Fuji Photo Film Co. (Fuji) manufactures and sells patented 'single-use' cameras, also known as lens-fitted film packages (LFFPs).
- Fuji designed the cameras with the intention that they would be used only once, and the plastic casing must be broken by a photoprocessor to remove the exposed film.
- Jazz Photo Corporation and other respondents acquired discarded LFFPs after consumers had used them and turned them in for film processing.
- In overseas facilities, the respondents' agents refurbished the used camera bodies.
- The refurbishment process included removing the cardboard cover, cutting open the plastic casing, inserting a new roll of film and a container, replacing the battery in flash models, resetting the film counter, and resealing the casing.
- The respondents then imported these refurbished cameras into the United States for resale.
- Some of the cameras being refurbished were originally sold by Fuji in the United States, while others were first sold only in foreign markets.
Procedural Posture:
- Fuji Photo Film Co. filed a complaint with the U.S. International Trade Commission (ITC) under Section 337 of the Tariff Act of 1930.
- Fuji alleged that twenty-seven respondents, including Jazz Photo Corporation, infringed its patents by importing refurbished single-use cameras.
- An Administrative Law Judge (ALJ) conducted a hearing and issued an Initial Determination finding that the respondents' refurbishment process was prohibited 'reconstruction' and therefore infringed Fuji's patents.
- The full ITC affirmed the ALJ's conclusion that the respondents' activities constituted infringement.
- The ITC issued a General Exclusion Order and an Order to Cease and Desist, effectively banning the importation of the refurbished cameras.
- Jazz Photo Corporation and two other respondents appealed the ITC's final determination to the U.S. Court of Appeals for the Federal Circuit.
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Issue:
Does the refurbishment of patented single-use cameras, which involves opening the casing, replacing the film and battery, resetting the film counter, and resealing the casing, constitute permissible repair under the patent exhaustion doctrine, or is it prohibited reconstruction that infringes the patent?
Opinions:
Majority - Newman, Circuit Judge
Yes, for cameras first sold in the U.S., this activity is permissible repair. The refurbishment of single-use cameras by replacing spent, unpatented components like film and batteries does not constitute a 'second creation' of the patented article and is therefore protected under the patent exhaustion doctrine. The court's reasoning is grounded in the principle that an unrestricted, authorized sale of a patented article in the U.S. exhausts the patentee's right to control that specific article's further use or sale. Precedent, such as Aro Manufacturing Co. v. Convertible Top Replacement Co., establishes that replacing worn, unpatented parts of a patented combination to preserve its fitness for use is the right of the article's owner. The core components of the camera (lens, shutter, body) have a useful life beyond a single use, and replacing the consumable film is akin to repair, not reconstruction. Fuji's unilateral intent for the cameras to be single-use, as indicated on the packaging, does not create an enforceable contractual license restricting reuse. However, this defense of repair only applies to cameras for which the U.S. patent right was exhausted by a first sale in the United States; it does not apply to cameras of foreign provenance.
Analysis:
This decision significantly clarifies the boundary between permissible repair and prohibited reconstruction, especially for products marketed as 'single-use' or 'disposable.' It reinforces the strength of the patent exhaustion doctrine, limiting a patentee's ability to control a product's lifecycle after its first authorized sale in the U.S. The ruling indicates that patentees cannot rely on patent law alone to enforce single-use restrictions and must instead use explicit, enforceable contracts or license agreements. This precedent impacts industries with significant aftermarkets for refurbished goods, such as printer cartridges and medical devices, by protecting the right of owners to extend the life of their property.
