EU's Right to Repair Directive Raises Unresolved Questions for Industrial Property Rights

On July 10, 2024, the European Union published Directive (EU) 2024/1799, known as the "Right to Repair" Directive, in the Official Journal of the EU. The measure is part of the EU's broader Green Deal strategy and is intended to facilitate easier, faster, and more transparent repair options for consumers, with the overarching goal of reducing waste and promoting sustainability through a "repair instead of replacement" approach.

A key provision of the directive is the obligation for manufacturers to offer comprehensive repair services upon consumer request. Importantly, Article 5(8) of the directive ensures that consumers are not limited to the original manufacturer for repairs; they may also choose any independent repairer. This is designed to foster competition among repair service providers.

The directive also encourages the use of "refurbished goods" in repairs, although it does not provide a precise definition of the term. Generally, refurbished goods are understood to be remanufactured or overhauled used products. These can be supplied as temporary replacements during repairs or, at the consumer's request, as permanent replacements, as outlined in Article 16(4)(c) and recital 42.

To further support consumers, Article 7(1) mandates the creation of a European online platform to help users locate repairers, sellers of refurbished goods, buyers of defective goods for refurbishment, and community-led repair initiatives such as repair cafes.

The scope of the directive primarily covers household appliances—so-called "white goods" like washing machines, dryers, dishwashers, vacuum cleaners, and refrigerators—as well as popular electronic devices, servers, data storage products, mobile phones, and goods containing batteries for light transport. Welding equipment is also included. Many of these products or their components may be protected by industrial property rights, including patents, trademarks, and design rights.

While the directive is widely welcomed from a sustainability perspective, it introduces legal complexities, especially regarding third-party repairs. The central legal issue is how the "right to repair" interacts with existing industrial property rights. While consumers seeking repairs for personal use are not considered to be acting commercially, independent repairers and remanufacturers operate as businesses and may risk infringing intellectual property rights when repairing or refurbishing protected products.

The principle of exhaustion, fundamental in patent law, provides that once a patented product is placed on the market by the patent holder or with their consent, the exclusive rights to that specific object are exhausted. This allows the general public to use the product as intended, including for maintenance and simple repairs. However, the distinction between permissible repair and unauthorized new manufacture—a matter not covered by exhaustion—can be difficult to determine in practice.

The German Federal Court of Justice, in its Flügelradzähler (impeller counter) decision (judgment of May 4, 2004 - X ZR 48/03), held that the key question is whether a repair preserves the identity of the patented product or results in the creation of a new product embodying the invention. If the replaced part reflects the technical effects of the invention, the act may be considered new manufacture, potentially exposing repairers or remanufacturers to patent infringement claims. This assessment is highly fact-dependent and must be made on a case-by-case basis.

This legal uncertainty creates tension between the directive's goal of expanding the repair market and the rights of IP holders, who may seek to restrict repairs or refurbishments that they view as infringing. The risk of patent infringement could deter independent repairers and remanufacturers, potentially undermining the directive's aim to increase competition and consumer choice in repair services.

The directive itself does not resolve these tensions. Although it references intellectual property rights, it does not provide detailed guidance on how to balance the right to repair with the protection of IP. Instead, it appears to leave these issues to be addressed by national legislators and courts. Article 5(6) of the directive states that manufacturers may not use contractual clauses, hardware, or software techniques to impede repairs unless justified by legitimate and objective factors, including IP protection under Union and national law. The directive also clarifies that it does not prejudice existing Union or national laws on IP rights.

Further, the directive acknowledges that manufacturers may restrict the use of original, second-hand, compatible, or 3D-printed spare parts by independent repairers if such restrictions are justified by product safety requirements or compliance with IP law. The directive cites several EU legal acts, including Directives 2001/29/EC, 2004/48/EC, and (EU) 2019/790, as relevant to the protection of IP rights.

As a result, the directive brings together competing interests: service providers seeking fewer restrictions on repairs and remanufacturing, the EU and consumers advocating for a robust repair market, and IP right holders aiming to protect their innovations. The ultimate resolution of these issues will depend on how national legislators and courts interpret and implement the directive.

One possible approach could be to limit patent protection for certain environmentally relevant products once they have been placed on the market with the patent holder's consent, or to presume consent for repairs or even new manufacture in specific circumstances. However, it remains uncertain whether legislators will pursue such measures.

In summary, while Directive (EU) 2024/1799 represents a significant step toward a more sustainable and competitive repair market in Europe, its interaction with industrial property rights remains unresolved. The lack of clear guidance on these issues leaves open the possibility of legal disputes and may limit the directive's effectiveness until further clarification is provided by national authorities.