Right to Repair: A German perspective on the legal and commercial developments in Europe and the US

Spirit Legal

Spirit Legal

A large proportion of all electrical appliances in Germany are simply thrown away, because repairing your toaster, your TV or your smartphone would be more expensive than just buying a new one. This is a waste of resources that needs to be stopped. And it’s one of the reasons why Germany pledged to comply with the UN Sustainable Development Goals, or SDGs, in 2015. The twelfth SDG, for instance, calls for sustainable consumption and production patterns – and disposable technology is anything but sustainable.

Repairing a camera: an impossible task without detailed documentation, manuals and access to suitable spare parts

Photo by Alexander Andrews on Unsplash

On the basis of this voluntary commitment, German consumer groups are calling for consumers to be given a ‘right to repair’ of goods they have purchased. But this whole area is something of a minefield, because if consumers opt to have their appliance repaired, that means fewer sales of new appliances.

The European Commission released a plan on March 11, the Circular Economy Action Plan as part of the “European Green Deal” (facts and figures here), that builds on the Ecodesign Directive that will help guide European Union-wide economic policy toward 2050. The plan specifically mentions the “right to repair,” but not just for machine tools, washing machines and light spurces, but for displays, cell phones and cell phone–related products as well. The European Commission is establishing new standards here, to the displeasure of cell phone manufacturers. They had previously been very critical of the “right to repair” and have so far successfully fended off any desire for regulation.

Excerpt from the “EU Circular Economy Action Plan”, p.8

Let’s take a look across the pond and consider the United States, the home of many a technological innovation. On the 30th of May 2017, the Supreme Court of the United States voted eight votes to zero in a remarkable decision that demonstrated an interesting display of consensus. The dispute was between printer manufacturer Lexmark and the company Impression Products. Impression Products had bought up empty printer cartridges from consumers, refilled them and resold them for less than Lexmark was charging. Impression’s business model was a violation of patents held by Lexmark, or so Lexmark’s attorneys claimed. So Lexmark decided to sue for patent infringement, and attempted to prevent the resale of its used ink cartridges. Lexmark argued that it is fair to impose certain requirements on its own goods – and that the buyer should be required to adhere to those requirements after purchase.

Exhaustion doctrine applies in US, European and German law

The Supreme Court well and truly rejected this view: The holder of a US patent right cannot prevent a regular buyer from doing whatever he or she pleases after purchasing a product. Had it come to a different conclusion – so if the manufacturer of a commodity needed to be consulted whenever that commodity was resold – then the very principle of buying and selling would come to a grinding halt, and second-hand shops would be a thing of the past. And this would, of course, be absurd. Which is why the Supreme Court’s decision restricts the rights of patent holders by referring to the globally recognised ‘exhaustion doctrine’:

“An authorized sale outside the United States, just as one within the United States, exhausts all (patent) rights,” wrote Chief Justice John Roberts for the court.

We’re also familiar with this principle of exhaustion in German and European law; it dictates that the producer of a commodity only has a one-time right to enforce its own terms, i.e. at the time of the initial sale, and that the producer is but a mere spectator when it comes to any further transfer of ownership later on.

In this respect, the Supreme Court has brought US patent law into line with US copyright law. The Supreme Court already published a nifty little decision back in 2013: It declared that it was perfectly OK for cheap books churned out for the Thai market by major American publishing house John Wiley to be reimported into the US and sold there, without affecting the publisher’s copyright. Wiley didn’t like that at all. We Germans know similar situations involving cars or medication, which are often cheaper when purchased as EU reimports.

Back to the Lexmark case: To justify its clear decision, which is peppered with strong wording, the court even quotes Sir Edward Coke, the author of the famous Institutes of the Lawes of England, a foundation of English common law:

“As Lord Coke put it in the 17th century, if an owner restricts the resale or use of an item after selling it, that restriction “is voide, because . . . it is against Trade and Traffique, and bargaining and contracting between man and man.”

Excerpt from Impression Products v. Lexmark International, 137 S.Ct. 1523 (2017)

The court bases its verdict on a nice example, a typically American analogy: Imagine a small, independent car repair garage in the Rust Belt in the north-eastern US. It buys used cars, repairs them, modifies them, and then sells the cars on at a profit. There are loads of car repair shops, tuning specialists, and similar businesses just like this all over the world.

“Old and new make the warp and woof of every moment.” (Ralph Waldo Emerson)

Photo by Dietmar Becker on Unsplash

If patent holders were still allowed to impose restrictions on their customers after selling their cars – for example “You’re not allowed to touch the valves!” or “No lowering your vehicle!” – then on the one hand tuning garages like these would no longer exist, and on the other our economy and our engine-loving subcultures would find themselves running dangerously low on creativity and entrepreneurial spirit. And if you’re thinking these are just the hypothetical musings of a lawyer, then you may well have missed the dawning of a new era; because the court’s example wasn’t simply plucked out of thin air.

Tractor manufacturer prohibits farmers from carrying out repairs

The tractor manufacturer John Deere, for example, prohibits farmers and agricultural enterprises from repairing their tractors themselves or even modifying their vehicles using software or microchips. As is so often the case, John Deere justifies this by claiming the need to protect its own intellectual property. Heaven forbid a farmer should infringe it.

Official John Deere License Agreement, p.1

What we’re seeing is that the buyers of modern products are now being more or less dispossessed, in that although they receive the physical shell, which in the case of a tractor means the screws, the sheet metal, the engine… its heart, so the software which controls the tractor, is merely a licensed product which comes complete with restrictions on its functionality. If the manufacturer decides that a function in the software is superfluous, then it can simply deactivate it – and the farmer, i.e. the licensee, is simply left out in the cold. As soon as there is a dispute about warranty rights, the manufacturer can deny support, and a disabling function in the software will turn the high-tech harvesting machine into a pile of scrap metal.

Passionate technology tinkerers will also know this problem on a smaller scale: Sony, for example, removed Linux support for its PlayStation 3 system in order to safeguard its copy protection. Consumers didn’t think much of this, and it ultimately proved hugely expensive for Sony, because it was forced to spend several million dollars compensating the participants of a class action in the US. But even this didn’t solve the problem: Linux still won’t run on a PS3.

Still no Linux for your Playstation

Photo by Laura Balbarde on Unsplash

John Deere reckons it’s a question of software piracy, so about not undermining the mechanisms which protect its expensive programs. But the cynics among us may come to the – albeit improbable – conclusion that the tractor manufacturer simply wants to prevent farmers from adapting its machines to their own needs, to their fields and their soil. I mean, what would happen if every farmer were to come up with their own innovations, and perhaps to do so even cheaper than the technology giant itself? Well, the technology giant would lose control!

In a noticeable article in WIRED in April 2015, the author Kyle Wiens wrote:

“We Can’t Let John Deere Destroy the Very Idea of Ownership.”

On the other hand, and it’s important to be fair, we mustn’t forget that genuine innovations, such as self-driving vehicles, would be unthinkable were it not for highly complex software, machine learning, and vast databases. Issues of patent law aside, it is therefore currently being considered whether it might actually be possible to use copyright law to regulate the resale, or the ‘downstream process’, of such marvels of modern technology. And here we reencounter an old acquaintance, the Digital Millennium Copyright Act, or DMCA, which we know for example from when YouTube removes videos, or Google gives us information about deleted search results, when we search for links to the latest blockbusters.

Sample search for “Snow Queen 2, pastebin” on Google reveals DMCA actions

A right to repair is only fair

The DMCA is currently being seen by US legal experts as an opportunity to prevent access to software, and thus also to prevent future generations of vehicles from being serviced by people who are not authorised by the manufacturer. In Germany, too, it is still not absolutely clear to what extent manufacturers are allowed to restrict the use of their products by way of licences. Consider the issue of ‘jailbreaking’ iPhones, which, when viewed from the perspective of IT security, can certainly make sense to businesses and private individuals alike. But Apple is of the opinion that jailbreaking constitutes a violation of its End User Licence Agreement.

You could debate for hours on end about whether this limitation of your rights, as the owner of an expensive iPhone, is valid. The fact is that today more and more products are becoming literally as well as legally irreparable. Which brings us back to the right to repair.

Several federal states in the US are currently discussing draft legislation that aims to grant consumers a ‘right to repair’. Pressure groups lobby with good arguments all across the United States, e.g. in Pennsylvania. Representatives of the IT industry, above all Apple, reject these initiatives, because they prefer to carry out the repairs themselves. After all, the repair business generates considerable revenues.

For example, the proposed legislation in Massachusetts, Nebraska, New York, Minnesota, California and other US states will require companies to publish repair instructions and descriptions of the components used, and to ensure that spare parts and tools are also available to independent workshops, and even at the same price as their own authorised workshops. If the laws come into force, consumers will finally be given more options than simply having to return to the original manufacturer. And since this is only fair, in some states the laws are called the “Fair Repair Act”.

John Deere has already drawn up a letter of opposition in response to a planned law in Kansas on the ‘right to repair’. One of the arguments it presents for exclusively using John Deere staff for repair work is – somewhat interestingly – emission compliance.

So Kansas’ farmers will need to be careful not to risk breaking the law when modifying their machinery, just in case it ends up emitting more nitrogen oxides into the atmosphere than legally permitted. They should probably leave the manipulation of exhaust emissions to the industry professionals…

Right to repair supposedly compromises device security

The IT and gadget industry is also up in arms about the planned legislation, arguing that the ‘right to repair’ will compromise the security of devices – without backing up this claim, mind you. What’s more, it’s alleged that it will undermine copyright and that the whole issue has been blown out of proportion, apparently because there are already plenty of cheap repair options available to consumers. But they seem to be ignoring the fact that end users might just like to be allowed to repair and experiment for themselves.

Future inventors, repairing things

Photo by Greg Rosenke on Unsplash

Under the oppressive conditions imposed by modern industrial giants, even the great American inventor Thomas Alva Edison would probably have struggled to invent anything, and we’d still all be sitting in the dark with no light bulbs or phonographs, let alone YouTube.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Spirit Legal | Attorney Advertising

Written by:

Spirit Legal

Spirit Legal on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.