Mines often believe that stackers, reclaimers, and shiploaders can only be serviced by the original equipment manufacturer (“OEM”) because of associated intellectual property (“IP”) rights. The matter is further complicated when the OEM's IP changes hands. Mines may then have competing claims as to who may maintain their equipment, supply replacement parts, or use the original drawings.
As a general proposition, an equipment owner may be able to select an independent service provider or source replacement parts from third parties. The position depends on the relevant contracts, IP, technical specifications, warranties, and safety requirements. This can become considerably more complicated where rights in the design or documentation have been transferred to a business other than the original manufacturer.
What the OEM actually owns
Registered rights provide a useful starting point. Under the Patents Act 57 of 1978, a patent can last up to 20 years from the application date, subject to renewal requirements. Under the Designs Act 195 of 1993, functional and aesthetic designs can last up to 10 and 15 years, respectively.
A valid patent does not automatically prevent an owner from having a lawfully purchased article repaired. An authorised sale ordinarily permits use of that particular article. Lawful repair, however, must be distinguished from making a new patented article. Extensive reconstruction, a replacement component or a particular repair method may require separate consideration.
Spare parts also receive specific treatment. Section 14(6) of the Designs Act excludes protection of spare parts for machines, vehicles or equipment as functional designs. This exclusion does not exempt every replacement part from all intellectual property rights.
Copyright may subsist in original engineering drawings, technical documents and control software under the Copyright Act 98 of 1978. It protects qualifying expression rather than underlying technical ideas or principles. Producing a three-dimensional article from a protected drawing may infringe copyright, but section 15(3A) provides an important exception in specified circumstances involving authorised, industrially produced, primarily utilitarian three-dimensional reproductions made available to the public. Whether reverse engineering or reproducing a replacement component is lawful depends on the facts, any other applicable IP rights, and contractual or confidentiality restrictions.
A stacker or reclaimer may incorporate bought-in equipment such as motors, gearboxes, bearings, idlers, pulleys, cables, drives and PLCs. Rights in these components may belong to their respective manufacturers rather than the equipment OEM. However, the availability of a component from a third party does not necessarily resolve contractual supply restrictions, compatibility, system integration, technical approvals, safety requirements or warranty implications.
Read the contract
The original supply, EPC, maintenance and related agreements should be the point of departure. These agreements may govern the use of technical information, the appointment of service providers, the sourcing of parts, and the modification of equipment, and may contain restrictions that survive delivery.
For example, Sub-Clause 1.10 of the unamended 1999 FIDIC Yellow and Silver Books provides an employer with substantial rights to use the contractor’s documents for purposes including operation, maintenance, alteration and repair, while the contractor retains its intellectual property. NEC4 ECC clause 22.1 also addresses the client’s use and copying of design information, subject to the Scope.
These provisions must be read in the applicable edition and with any project-specific amendments. The license should be checked to determine whether it permits the proposed work and use of the documents by an independent contractor. The supplier’s obligations to deliver as-built drawings, operating manuals and parts information should also be established. Possession of documents and permission to reproduce or disclose them are separate questions.
Buying the drawings does not make you the OEM
What happens when an OEM sells its designs?
Buying copies of drawings does not necessarily amount to the assignment of copyright. A copyright assignment transfers specified ownership rights, which may include rights to reproduce, adapt and authorise use of the works. Its scope can be limited by activity, territory or duration. Crucially, copyright can only be assigned in writing, under section 22(3) of the Copyright Act.
Section 22(7) of the Copyright Act deals with existing licences and generally applies to subsequent copyright owners. The exception is for a good faith purchaser who had neither actual nor constructive notice of the licence and anyone who takes title from that purchaser.
By purchasing copyrighted drawings, one cannot automatically become the OEM. Whether the purchaser can accurately describe itself as the OEM’s successor depends on what it actually acquired from the OEM. Purchasing copyright alone does not establish that the buyer originally manufactured the installed equipment or has exclusive servicing rights. A misleading claim regarding origin, association or business continuity may amount to passing off as a form of unlawful competition.
You choose who works on your machines
An equipment owner may (subject to the relevant agreements and legal requirements) appoint suitable independent contractors to carry out the maintenance, repair or refurbishment of the equipment. That doesn't necessarily confer on the owner the right to reproduce or disclose the OEM drawings, software and other confidential technical information to those contractors. The scope of any document use licence, any third party access rights, any intellectual property restrictions and any site-specific safety requirements will all need to be considered. Any modifications or substitute parts will almost certainly require engineering assessment, testing and/or approval prior to use.
Independent servicing or replacement of parts may have an impact on the warranty coverage (this will depend on the wording of the warranty, the applicable law and whether the intervention itself caused or contributed to the defect in question). Some warranties will specify servicing standards, approved components and/or authorised service providers. An independent repair should not be assumed to automatically void every warranty. The OEM's warranty should be distinguished from any warranty which may be provided by a repairer or a component supplier.
Crucially, the expiry of a warranty does not extinguish IP rights, release any confidential information or remove any liability for defective or unsafe work.
The central issue is not simply whether the equipment owner can choose a service provider, but whether the proposed work can be carried out in accordance with the relevant IP rights, contracts, warranties, confidentiality obligations and applicable safety and regulatory requirements.
Safety and regulatory compliance
IP permissions do not discharge the mine operator's statutory obligations to manage health and safety risks. Any repair, alteration or replacement of parts (particularly in the areas of lifting, conveyance, braking, electrical and control systems) will almost certainly require a risk assessment, verification of fitness for purpose, a competent person to be present and compliance with the relevant mine procedures. The requirement for specific approvals or inspections will be a matter of the equipment in question, the nature of the work and the applicable regulation. Insurance conditions and performance guarantees will also be relevant in some cases.
What to do in practice
In practice:
- Owners should review the original supply or EPC contract, including its intellectual property, document-use, confidentiality and warranty provisions;
- Ask for the as-built documentation you are entitled to;
- Have outside contractors sign a confidentiality undertaking. Remember, a confidentiality undertaking alone does not supply a missing licence;
- Carry out an appropriate engineering and safety assessment (including any necessary statutory, manufacturer, insurer or site approvals). In the context of South African mining operations, this would involve the Mine Health and Safety Act 29 of 1996 and the applicable regulations, standards, codes of practice and mine-specific procedures. Any safety-critical modifications would be reviewed and approved by the appropriate competent person(s).
- When faced with exclusivity claims, ask the claimant to identify the particular right or contractual provision along with an explanation of how your conduct infringes and/or breaches.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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