## Facts

- A patentee owned a Japanese patent covering structural features of ink-jet printer ink cartridges, including internal negative-pressure generating materials and their arrangement for ink retention.
- The patentee marketed the cartridges as single-use: they were intended to be discarded after the ink was depleted.
- An importing company obtained spent cartridges that had originally been manufactured and sold by the patentee (or affiliated entities), then were refurbished abroad and imported into Japan for resale.
- The refurbishment involved opening the cartridge body, removing internal components (including negative-pressure generating material), replacing those materials with new substitutes, refilling with ink, resealing the cartridge, and modifying it so it could be refilled and reused.
- The patentee sued seeking an injunction against importation and sale in Japan and destruction (abandonment) of the refurbished cartridges.
- The Intellectual Property High Court ruled for the patentee, concluding the patent was not exhausted as to the refurbished cartridges because the alterations were substantial and involved essential elements of the invention.
- The importer appealed on points of law to the Supreme Court of Japan.

## Issues

1. Whether a patentee’s rights are exhausted after an authorized first sale such that third parties may refurbish and resell the product without infringement.
2. Whether extensive refurbishment of single-use ink cartridges—replacing or reconfiguring components corresponding to essential patented elements—constitutes permissible repair or impermissible remanufacture creating a new patented product.
3. Whether a product that has reached the end of its intended life may be reconstructed and resold without infringing despite an earlier authorized sale.

## Decision

- The Supreme Court dismissed the appeal and affirmed the judgment for the patentee.
- The Court held that the importer’s refurbished cartridges were the result of remanufacturing, not permissible repair.
- The Court concluded that patent exhaustion did not extend to the refurbished cartridges because the refurbishment replaced or modified parts constituting essential elements of the patented invention and effectively recreated the patented product after the original cartridge’s intended life had ended.
- Importation and sale of the refurbished cartridges in Japan infringed the patentee’s rights, supporting injunctive relief and destruction of infringing goods.

## Legal Principles

- An authorized sale of a patented product generally exhausts the patentee’s rights as to that particular item for ordinary use, resale, and limited repair consistent with the product’s continued service life.
- Exhaustion does not apply where a product has completed its normal life and lost its utility as a product, and a third party reconstructs it for renewed use.
- Exhaustion also does not apply where a third party partly or completely modifies or replaces components that constitute essential parts of the patented invention.
- The repair/remanufacture boundary turns on whether the work merely maintains functionality within the product’s ordinary lifecycle (repair) or instead recreates the patented article by reconstructing essential inventive elements (remanufacture), even if an original casing is reused.

## Conclusion

The Supreme Court of Japan held that extensive refurbishment of single-use ink cartridges that replaces or reconstructs essential patented internal structures constitutes remanufacture producing a new patented article, so the patentee’s rights are not exhausted and the importer’s sale and importation infringe.


In re Ink Cartridge Patent Exhaustion, 61 Minshū 2989 (Sup. Ct. Japan 2007)