Planned Obsolescence and the Right to Repair

De temps en temps nous partageons des travaux « IP News » exceptionnels, écrits pour la classe de Propriété intellectuelle (BUS 502). Vous trouverez celui de Christopher A. J. L. Little ci-dessous.  

In September, 2018, the Italian Market and Competition Authority (Autorità Garante della Concorrenza e del Mercato) issued a judgment against Apple for their actions during what has come to be called “Batterygate.[1]” More specifically, for pressuring consumers to download software updates without providing adequate information about the impacts that these updates would have on their phones, Apple was found to have violated sections 20, 21, 22, and 24 of the Italian Consumer Code[2] and was fined 10 million Euros.

While Italian consumer law cases do not generally receive international media attention, this case was an exception. However, rather than focusing upon the actual decision—relating rather narrowly to provisions of the Italian Consumer Code—the media often presented the case as one in which Apple was fined for “planned obsolescence.[3]” Put otherwise, the international media suggested that Apple was condemned for deliberately slowing the performance of some iPhones to encourage consumers to purchase newer models.

Italian authorities could not condemn Apple for a program of planned obsolescence because Italian laws, like those of many other countries, do not explicitly prohibit planned obsolescence. The lack of regulation surrounding planned obsolescence, combined with growing concern for the environmental degradation caused by consumption and electronic waste has led to the emergence of a movement to enshrine the rights of consumers to extend the lives of their products through repair. Such a movement, however, faces challenges from the nature of our consumer society as well as firms asserting their intellectual property rights to guard their profits.

The Paradox of Planned Obsolescence

While media coverage surrounding the Italian decision may suggest that planned obsolescence is a new concern, it is in fact one which legal systems have long confronted. Given that this issue has been of longstanding concern, it may seem surprising that many countries do not have specific laws against planned obsolescence. Instead, as illustrated by the Italian decision, consumers must typically rely upon private law for redress. Similarly, the Quebec class action lawsuit against Apple relies upon articles 37 and 38 of the Consumer Protection Act [4], relating to the quality of the batteries that Apple sold, while a class action in California relies upon the breach of an implied contract and trespass to chattel [5].

The absence of laws relating to planned obsolescence as well as the paucity of legal scholarship on the subject [6] may reflect the fact that many view it positively. Indeed, the term “planned obsolescence” appears to have entered our lexicon through the writings of Bernard London, who was an active proponent of planned obsolescence [7]. Seeing the wheels of industry grind to a halt during the Great Depression, London proposed that “the Government assign a lease of life… to all products of manufacture. [8]” At the end of the lease, these products would become “legally ‘dead’” and then be destroyed by a governmental agency [9].  As consumers would need to continually purchase new goods, the increased consumption would place the Western world back on the path to normal levels of employment and prosperity. Such positive views concerning planned obsolescence are also reflected in more contemporary economic theories, which see competitive markets as generating excessive product durability, thereby decreasing the ability of businesses to maximize the returns upon their investments and reducing the incentives to invest in research and development [10]. 

These positive appraisals of planned obsolescence, particularly as they relate to the economy, may in turn reflect a fact that is less frequently acknowledged in contemporary discussions surrounding the regulation planned obsolescence: that it is a consequence of living in a society of “mass consumption. [11]” Conceptualizing obsolescence as an inherent feature of a capitalist economy that may occur through many means, including product design (e.g., the Phoebus cartel’s lightbulbs) [12], perceived obsolescence (resulting from advertising and social trends) [13], systemic obsolescence (e.g., when companies stop providing product support) [14], or technological obsolescence (when a product is supplanted by superior technology) [15], raises questions about whether obsolescence in all of its forms—rather than certain conditions which may give rise to it, such as monopolies or cartels—can be addressed within a socio-economic form of organization which depends upon it.  

Reducing Waste: The Right to Repair

Although planned obsolescence has long been known, much of the contemporary focus relates to questions of environmental sustainability, rather than economic issues such as product pricing [16]. This concern as well as the reluctance of legislators to address the issue has resulted in the emergence of a movement focused upon combatting one aspect leading to product obsolescence: the inability of consumers to repair their products. Organizing around the “right to repair,” groups including France’s “L’Association Halte à l’obsolescence programmée,” the American “The Repair Organization,” and “Open Media” in Canada, have all attempted to galvanize support for legislation that enshrines the ability of consumers to repair their products, typically by challenging restrictive end user agreements, supporting a fair use exemption for repair manuals and diagnostic codes, and ensuring access to affordable replacement parts [17]. Such efforts have met with mixed results, as represented by the tabling of right to repair legislation in jurisdictions such as Quebec and Ontario, which were then subsequently defeated. [18]

  As is reflected in the lobbying that defeated such legislative initiatives [19], the “right to repair” movement has encountered resistance from product manufacturers, because it threatens their business models, which allow them to generate profits by establishing positions in the adjacent market of repairs [20]. Manufacturers may offer their own repair services at premium prices, as is the case with Apple, or create networks of authorized repair shops [21] which receive genuine replacement parts and confidential repair instructions and, in return, pay fees to, or share a portion of their profits with, the manufacturers. [22] 

In addition to lobbying against right to repair legislation, a major way through which firms have responded to the “right to repair” movement is through invoking their intellectual property rights [23]. For instance, in jurisdictions such as the U.S., which have trade secrets legislation, manufacturers have successfully attempted to have courts recognize repair manuals as trade secrets to be able to restrict their circulation [24]. Similarly, firms have attempted to use copyright law to challenge doctrines such as fair use. For example, in the U.S., firms have attempted to get around fair use as well as s. 117(c) of the U.S. Copyright Act [25] —which provides a specific defense to copyright infringement that was designed to protect independent repair businesses—through the inclusion of terms of service agreements and end-user license agreements on product packaging. This packaging typically asserts proprietary rights, places limitations on warranties, and restricts the rights of users while expanding the rights of manufacturers. Further, these agreements may include restrictions on decompiling software, disassembly, reverse engineering, and may also prohibit repairs outside of approved service networks [26]. Finally, the use of software locks have allowed firms to combat fair use since anti-circumvention laws—globalized through the World Intellectual Property Organization Copyright Treaty [27] —prohibit the bypassing of such locks. [28]

In other cases, firms may attempt to assert their trademark rights to halt repairs. For instance, in 2018, Apple had Norwegian customs seize a shipment of refurbished iPhone screens imported from Hong Kong and then sued the importer, the owner of an independent smartphone repair shop, by invoking s. 4 of Norway’s Trademark Act, which prohibits unauthorized users from using a trademark for any industrial or commercial undertaking [29]. Apple claimed that they had never authorized the sale of refurbished screens and that the owner would “use” Apple’s trademark, located on the back of the screens, without its consent. While the court in this case ruled that there was no violation because the shop owner had no incentive to use Apple’s trademark when repairing customers’ screens, this case highlights how aggressive large firms may be when trying to control the repair market. Indeed, given that that Apple did not have  significant economic interests at stake in this case, it may raise the possibility that the lawsuit was designed to create a chilling effect on the repair market.

Conclusion

The recent attention given to the issue of planned obsolescence suggests that consumers see the law as failing to adequately respond to the issue of electronic waste and the environmental degradation that it generates. Such dissatisfaction has resulted in the birth of the “right to repair” movement which, though gaining widespread attention, has faced challenges by firms eager to use their intellectual property rights to either impede the ability of consumers to repair their goods or to control adjacent repair markets. This conflict, between companies eager to extract profits and activists keen to prioritize sustainability, has created new terrain upon which intellectual property rights can be both challenged and asserted for opposing goals.

[1] Apple-Aggiornamento Software, Provvedimento n. 27365, Autorità Garante della Concorrenza e del Mercato, 25 September, 2018 [Italian decision].

[2]  Codice del Consumo, Decreto Legislativo 6 settembre 2005, n. 206.

[3] See, e.g., Janet Burns, “Italy Fines Apple, Samsung A Few Mil for ‘Planned Obsolescence in Phones”, Forbes (October 24, 2018), online: <www.forbes.com> [perma.cc/TB52-T4RP]

[4] Consumer Protection Act, CQLR c P-40.1. Article 37: Goods forming the object of a contract must be fit for the purposes for which goods of that kind are ordinarily used.; Article 38. Goods forming the object of a contract must be durable in normal use for a reasonable length of time, having regard to their price, the terms of the contract and the conditions of their use.

[5] See Registry of Class Actions, “Overview of the application 500-06-000897-179” (9 December 2017), online: Superior Court of Quebec <www.registredesactionscollectives.quebec>[perma.cc/846P-ZPKP]; See also Justia Dockets and Filings, “Stefan Bogdanovich et al v. Apple, Inc., et al” (21 December 2017), online: Justia Dockets and Filings<dockets.justia.com>[perma.cc/53W2-85J4]. 

 [6] Mark Fenwick & Stefan Wrbka, International Business Law: Emerging Fields of Regulation (London: Bloomsbuy, 2019) at 76.

 [7] Bernard London, “Ending the Depression Through Planned Obsolescence” (1932), online (pdf): Semantic Scholar <https://www.semanticscholar.org>[perma.cc/E454-L247]

[8] Ibid at 6.

[9]  Ibid at 6.

[10] Arthur Fishman, Neil Gandal & Oz Shy, “Planned Obsolescence as an Engine of Technological Progress” (1993) 41:4 The Journal of Industrial Economics 361.

[11] Taiwok Aladeojebi, “Planned Obsolescence” (2013) 4:6 Intl J of Scientific & Engineering Research at 1505; Kiminori Matsuyama, “The Rise of Mass Consumption Societies” (2000), online (pdf): Northwestern University <http://faculty.wcas.northwestern.edu>[perma.cc/9YR8-UYQP].

[12] Bill Brown, “The Obsolescence of the Human” in Babette Bärbel Tischleder & Sarah L Wasserman, eds, Cultures of Obsolescence: History, Materiality, and the Digital Age (New York: Palgrave Macmillan, 2015) at page 24.

[13] Vance Packard, The Hidden Persuaders (New York: Penguin Books, 1957).

[14] For instance, manufacturers tend to stop supporting computer operating systems after several years, requiring users to upgrade their hardware if they want to use newer, more demanding software. [15] For example, the floppy disk was supplanted by USB-storage devices which could store files many times larger and retrieve them faster. Richard Fox, Linux with Operating System Concepts (New York: CRC Press, 2017) at page 114.

[16] Giles Slade, Made to Break: Technology and Obsolescence in America (Cambridge: Harvard University Press, 2006) at page 2.

[17] See, e.g. Laetitita Vasseur, Adèle Chasson & Quentin Ghesquière, “50 mesures pour une consommation et une production durable : Le Guide des politiques publiques pour une société sans obsolescence accélérée” (2019), online (pdf): Halte à l’obsolescence <https://www.halteobsolescence.org>[perma.cc/4E8L-JZ83].

[18] See Assemblé nationale du Québec, “Projet de loi n°197 : Loi modifiant la Loi sur la protection du consommateur afin de lutter contre l’obsolescence programmée et de faire valoir le droit à la réparation des biens”, online: Assemblé nationale du Québec<http://www.assnat.qc.ca>[perma.cc/3YPF-ZZWJ]; See also  Legislative Assembly of Ontario, “Bill 72, Consumer Protection Amendment Act (Right to Repair Electronic Products)” (2019), online: Legislative Assembly of Ontario<https://www.ola.org>[perma.cc/XVB2-784C].

[19] See, e.g., Jordan Pearson, “Right to Repair Bill Killed after Big tech Lobbying in Ontario”, VICE (May 2, 2019), online: <vice.com> [https://perma.cc/8X6T-CZ7B]. “Italy Fines Apple, Samsung A Few Mil for ‘Planned Obsolescence in Phones”, Forbes (October 24, 2018), online: <www.forbes.com> [perma.cc/TB52-T4RP].  

[20] Ping Lin and Hiroshi Ohashi, “Treatments of Monopolization in Japan and China” in Roger D Blair and D Daniel Sokol, eds, The Oxford Handbook of International Antitrust Economics, vol 2. (Oxford: Oxford University Press) at pages 206-207; Marissa MacAneney, “If It is Broken, You Should Not Fix It: The Threat Fair Repair Legislation Poses to the Manufacturer and the Consumer” (2018) 92:2 St. John’s L Rev at pages 331-332.

[21] Charging higher prices for repairs may also enable firms to sell their products at reduced prices, thereby providing an incentive for consumers to purchase new goods (Roger J Van den Bergh & Peter D Camesasca, European Competition Law and Economics: A Comparative Perspective (New York: Intersentia, 2017).

[22] MacAneney, supra 17, at page 336.

[23] See, e.g. Stuart Thompson, “Everyone (except lawmakers) seems to want Canadians to have the right to repair their iPhones and tractors.” National Post (June 12), online: <nationalpost.com> [perma.cc/386M-LMYW] 

[24] AvidAir Helicopter Supply, Inc. v. Rolls-Royce Corp., 663 F.3d 966, 975 (8th Cir. 2011). In this case, the Court accepted Rolls-Royce Corp’s claim that its Distributor Overhaul Information Letters contained details intended for the repair market that qualified as protectable trade secrets under the Uniform Trade Secrets Acts of both Indiana and Missouri.

[25] Title 17 of the United States Code, Copyright Law of the United States.

[26] MacAneney, supra 17 at pages 336-337.  

[27] World Intellectual Property Organization Copyright Treaty, 1996. Magnus Eidem, “Apple sent five lawyers to stop 63 Mobile Screens.” Dagens Næringsliv (January 28, 2018), online: <https://www.dn.no> [perma.cc/HN4N-D4LH]; Lov av 8. mars 2010 nr. 8 om varemerker (varemerkeloven).

[28] See, e.g., RealNetworks, Inc. v DVD Copy Control Ass’n, Inc., (2009) ND Cal 641 F. Supp. 2d 913, 943- 44, in which RealNetworks was enjoined from distributing software which circumvented DVD’s Content Scramble System technology, because it violated the Digital Millennium Copyright Act; see also Daniel Cadia, “Fix Me: Copyright, Antitrust, and the Restriction on Independent Repairs” (2019) 52:3 UCDL Rev at page 1701.

[29] Magnus Eidem, “Apple sent five lawyers to stop 63 Mobile Screens.” Dagens Næringsliv (January 28, 2018), online: <https://www.dn.no> [perma.cc/HN4N-D4LH]; Lov av 8. mars 2010 nr. 8 om varemerker (varemerkeloven).

This content has been updated on December 16, 2019 at 14:06.