British Leyland Motor Corp v Armstrong Patents Co

Lord Bridge observed: It seems to me that when one is considering machinery which is not the subject of any patent protection, it is unnecessary and may be misleading to introduce the concept of an implied licence.

The Privy Council did not accept the applicability of concepts of implied licence, non-derogation from grant, or inalienable right to repair one's property as bases for the Leyland spare parts doctrine.

Instead the Privy Council said the doctrine was "an expression of what the House perceived as overriding public policy, namely the need to prevent a manufacturer from using copyright (as opposed to patents or design right) in order to control the aftermarket in spare parts."

The Privy Council then turned to what in the United States has been considered the "Chicago School" method of legal analysis: The question of whether it is contrary to the public interest for a manufacturer to be able to exercise monopoly control over his aftermarket cannot usually be answered without some inquiry into the relevant market.

Moreover, "once one departs from the case in which the unfairness to the customer and the anticompetitive nature of the monopoly is as plain and obvious as it appeared to the House of Lords in British Leyland, the jurisprudential and economic basis for the doctrine becomes extremely fragile."

The Privy Council did not perceive in this case "the features of unfairness and abuse of monopoly power which underlay the decision in British Leyland" as "plainly and obviously present."

Mr. Justice Jacob interpreted Green Cartridge as holding that the British Leyland "spare parts exception applied" only when it was "plain and obvious" that the challenged act of replacement (here, altering the software) was analogous to a repair which an ordinary purchaser of an article would assume he could do for himself without infringing the manufacturer's rights, or that "the exercise of monopoly power by means of copyright would be against consumers' interests."

The court held that the circumstances of the Mars case—altering a coin changer so that it would operate for UK coinage by altering the software—did not warrant invocation of the non-derogation doctrine.

In 1988 Parliament supplemented the doctrine of the 1986 Leyland case with legislation[7] providing two specific new exceptions, known as "must fit" and "must match"—meaning that spare parts could be made that corresponded to the configuration of the original product (as the exhaust pipe in the Leyland case, for example, bent and twisted to fit the pattern of the underside of the Morris Marina car) and they could be designed to correspond to the appearance of the original product in which the spare part is "to form an integral part" (for example, the right fender of a car must not be dissimilar in aesthetic appearance to the left fender).

He interpreted the statute to require this rule (as stated in the High Court judgment): But unless the spare parts dealer can show that as a practical matter there is a real need to copy a feature of shape or configuration because of some design consideration of the whole article, he is not within the exclusion.

This is, I accept, somewhat speculative in the absence of solid evidence, but it is plausible and I certainly cannot find that that is wrong and Qualtex has not discharged its burden of showing it is right.

In denying Qualtex's appeal, the court concluded: The overall lesson here is that the exceptions to UDR created by the Act do not give a carte blanche for pattern spares.

Rear view of Leyland Marina showing exhaust pipe