Circular Economy and Recycling IP Toolkit: Processes, Content Claims, Take-Back, and Feedstock

By Casey Scott McKay · 2024-08-15

A circular business takes somebody else's product apart and sells the material back into the economy, which makes it an intellectual property practice organised around other people's rights. This toolkit assembles the working material for practitioners advising recyclers, refurbishers, remanufacturers, brand owners running take-back programmes, and the technology businesses that supply them. It covers process and sorting technology protection, the substantiation behind every recycled content claim, the exhaustion and trademark questions that determine whether a refurbished product may be sold under its original mark, and the feedstock supply agreements on which the whole sector depends. It closes with clause language, an authorities table, and the failures that recur.

IP and Technology > General IP | Toolkit | Published 15 August 2024 - Updated 25 February 2025 | Casey Scott McKay - marksy.us

Summary. A circular business takes somebody else's product apart and sells the material back. This toolkit covers process and sorting technology protection, the substantiation and chain of custody behind recycled content claims, mass balance accounting and the certification marks that carry it, the exhaustion and trademark analysis that decides whether a refurbished product may bear its original mark, take-back and remanufacturing terms, and the feedstock agreements on which the sector depends.

Keywords: circular economy IP · recycling process patents · sorting technology · chemical recycling · recycled content claims · mass balance · chain of custody · certification marks · take-back programmes · refurbishment · remanufacturing · exhaustion and repair · feedstock supply · extended producer responsibility · substantiation records

Start Here

A circular business is defined by an awkward fact: its input is somebody else's output, and that somebody else has rights in it.

The material arrives encumbered. A returned appliance carries the manufacturer's marks, its design, its embedded software, and frequently its patents. A bale of plastic carries whatever the producer put in it. A batch of batteries carries chemistry the cell maker regards as proprietary. The recycler's first question is not what it can protect but what it is permitted to do.

The output makes a claim. "Thirty per cent recycled content", "certified circular", "remanufactured to original specification" — each is an advertising claim requiring substantiation, and the substantiation requires a chain of custody through a supply chain built for material handling rather than for documentation.

The technology is process technology. Sorting, separation, depolymerisation, purification, and reformulation are chemical and mechanical processes, patentable in the ordinary way and frequently better protected as trade secrets because process improvements are hard to detect in a competitor's plant.

And the feedstock is the constraint. Every recycler's business plan depends on securing material at a price and quality it can process, under agreements that allocate contamination risk, specification, and — increasingly — the environmental attributes that attach to the material.

Four questions organise the work.

What may be done with material bearing somebody else's rights?

What can be claimed about the output, and what proves it?

How is the process technology protected?

And what do the feedstock agreements have to do?

See What Happens to the Material for the doctrinal treatment, Advising a Recycling or Circular Economy Business for the sequence, and the Circular Economy IP Checklist for the working list.

Part one: exhaustion, repair, and what may be done with the material

The first sale exhausts patent rights. Impression Products, Inc. v. Lexmark International, Inc. held that an authorised sale exhausts the patentee's rights in the article regardless of post-sale restrictions, and that a sale abroad exhausts United States rights. That is the foundation of the sector: a recycler acquiring a used product acquires an article whose patent rights are spent.

Repair is permitted; reconstruction is not. Aro Manufacturing Co. v. Convertible Top Replacement Co. draws the line, and it is a question of degree. Replacing a worn part is repair. Rebuilding a spent article into a new one is making. Remanufacturing sits uncomfortably in the middle and the analysis is fact-specific.

Refurbishment for resale under the original mark is the trademark question, and the answer is that resale of a genuine article is permitted, but a materially altered article sold under the original mark can infringe. The doctrine descends from Champion Spark Plug Co. v. Sanders, which permitted resale of reconditioned plugs marked to disclose the reconditioning. Adequate disclosure is the operative requirement, and inadequate disclosure converts a lawful business into an infringement.

The disclosure must be prominent and accurate: who did the work, what was done, and that the seller is not the original manufacturer. A small sticker on a box is generally not enough where the product itself bears the original mark.

Material differences analysis applies where the refurbished article differs from the original in ways consumers would care about — warranty, performance, components — following the grey market line in Lever Brothers Co. v. United States and K Mart Corp. v. Cartier, Inc.. See Gray Market Goods.

Copyright in embedded software is not exhausted in the same way, and a refurbisher that copies firmware to a replacement board is reproducing a work. 17 U.S.C. § 117 gives limited rights to owners of copies, and 17 U.S.C. § 1201 prohibits circumventing access controls, subject to exemptions. This is the sharpest practical constraint on electronics refurbishment. See The DMCA's Other Half and Navigating Section 1201.

Design rights in a replacement part raise the spare parts question, and design protection on visible components is a genuine obstacle to a parts business. See the Aftermarket and Repair IP Checklist.

And trade secrets in the material itself — an alloy specification, a polymer formulation, a battery chemistry — are not infringed by analysing a lawfully acquired product, since reverse engineering of a lawfully obtained article is a recognised means of acquisition. But a recycler that obtains a specification through a confidentiality relationship is in a different position entirely.

Part two: recycled content claims and their substantiation

Every circular business makes claims, and claims are regulated speech.

The framework. 15 U.S.C. § 45 prohibits unfair and deceptive practices, the environmental marketing guidance sets out how specific green claims are assessed, and 15 U.S.C. § 1125(a) gives competitors a false advertising claim with a damages remedy.

The claims that recur. Recycled content percentage. Post-consumer versus post-industrial. Recyclable. Compostable. Biodegradable. Carbon reduction. "Circular", "closed loop", and "sustainable", which are unqualified general claims and are the most exposed of all.

Percentage claims require accounting. A "thirty per cent recycled content" claim means the product contains that proportion by weight, established by input records traced through the process. That requires supplier documentation, batch records, and a mass balance that reconciles.

Mass balance and chain of custody models are the sector's answer to processes where recycled and virgin feedstock are physically mixed — chemical recycling especially. The accounting attributes recycled content to specific output volumes without physical segregation. It is accepted in several certification schemes, it is contested by some regulators and campaigners, and a claim relying on it should say so rather than implying physical content.

Certification schemes and marks carry much of the substantiation. A certification mark under 15 U.S.C. § 1054 certifies characteristics, must be controlled by an owner that does not itself produce the goods, and can be cancelled under 15 U.S.C. § 1064 for failure to control. Using a scheme's mark requires compliance with the scheme's rules, and misuse is both a trademark and an advertising problem. See Selling Green and the Environmental Claims and Cleantech IP Checklist.

"Recyclable" is a claim about infrastructure, not about the material. A material that is technically recyclable but for which no collection exists for most consumers is a claim in trouble, and state legislation increasingly regulates the use of recyclability symbols directly.

Substantiation must exist before the claim is made, must be retained, and must be producible. The recurring failure is a claim carried forward from a formulation that has since changed.

Qualify precisely. "Made with thirty per cent post-consumer recycled polyethylene, by weight of the bottle excluding cap and label" is defensible. "Eco-friendly" is not.

And check the labelling layer, since origin, material, and disposal marking interact with the claim. See Getting a Label Right and the Labelling and Packaging Compliance Checklist.

Part three: protecting the process technology

Process patents are available and useful. Sorting by spectroscopy, mechanical separation, solvent-based purification, depolymerisation chemistry, and metal recovery are ordinary patentable subject matter under 35 U.S.C. § 101, assessed under 35 U.S.C. § 102 and 35 U.S.C. § 103 with KSR International Co. v. Teleflex Inc..

Detectability is the problem. A process operating inside a competitor's plant is invisible. 35 U.S.C. § 271(g) helps by making importation of a product made abroad by a patented process an infringement, which reaches offshore processing, and 35 U.S.C. § 295 shifts the burden in defined circumstances. Claiming the product-by-process or the resulting material composition, where novel, is frequently more enforceable than claiming the process.

Trade secrecy carries the rest under 18 U.S.C. § 1836, with reasonable measures per Rockwell Graphic Systems, Inc. v. DEV Industries, Inc.. Catalyst formulations, operating parameters, and process recipes are classic trade secret subject matter, and plant tours are the classic leak.

Composition claims on the output material — a recycled polymer with a specified property profile — can be valuable and face the ordinary novelty problem, since the same material may exist from virgin production.

Equipment patents on sorters, shredders, and separation lines are conventional and are the part of the sector where enforcement actually happens, because the machines are sold and can be inspected.

Software and machine vision in sorting raises the eligibility question, with the answer being to claim the apparatus and the physical actuation rather than the classification method. See Buying a Model for the vendor terms.

Collaboration is endemic — with brand owners, waste managers, chemical companies, and universities — and background and foreground allocation is the recurring gap. See Whose Invention Is It? and From Laboratory to Licence.

And publication pressure is high, because the sector attracts grant funding and academic partners, and a conference paper is a public disclosure. See Prior Art in a First-Inventor-to-File World.

Part four: take-back, refurbishment, and brand control

A brand owner running a take-back programme is doing something legally distinct from a recycler, and the two positions should not be conflated.

Brand-operated take-back gives the owner control over what happens to returned product, which is why brands run them. The intellectual property questions are about the contractor: what the processor may do with returned goods, whether it may resell components, whether it may sell recovered material bearing the mark, and what it must destroy.

Certified refurbishment programmes allow a brand to capture the secondary market and to control quality. The programme terms should specify the standard, the parts permitted, the disclosure required, the warranty offered, and the mark usage — which is a trademark licence and needs quality control to avoid the naked licensing problem in Barcamerica International USA Trust v. Tyfield Importers, Inc.. See Naked Licensing.

Independent refurbishers operate under the Champion Spark Plug disclosure rule and should document their process for exactly that reason.

Destruction and de-branding obligations matter in every processing contract. A brand owner sending returned goods for recycling wants the marks destroyed, not the goods resold in a distant market. Specify destruction, require certification, and audit it — because unbranded recovery routinely becomes branded resale.

Extended producer responsibility schemes impose collection and reporting obligations that generate data about product flows, and the data has commercial value and unclear ownership between producer, scheme, and processor.

Counterfeit goods entering a take-back stream are a real problem: a recycler receiving counterfeits cannot lawfully resell them and should have a protocol. See the Anti-Counterfeiting Program Checklist.

And the secondary market itself is a brand question, with authentication, serialisation, and resale terms mattering most in luxury and durable goods. See the Jewellery, Watches, and Luxury Goods IP Toolkit.

Part five: feedstock agreements

The feedstock contract is the sector's most important commercial document and the one most often drafted as a commodity supply agreement.

Specification and contamination. What the material must be, how it is measured, who samples, what happens on failure, and who bears the cost of rejected loads. Contamination is the sector's principal operating risk.

Chain of custody documentation is required for every content claim downstream, and it must be contractual. A recycler that cannot document its inputs cannot substantiate its outputs.

Environmental attributes. Increasingly the material carries a recycled-content attribute or a credit that can be sold separately from the material. Allocate it expressly: does the attribute follow the material, remain with the supplier, or split? Silence produces double counting.

Exclusivity and volume commitments determine whether a plant can be financed, and reciprocal commitments — the recycler takes minimum volumes, the supplier supplies minimum quality — are the usual structure.

Confidentiality on both sides. The supplier's waste composition reveals its production; the recycler's process parameters reveal its technology. Mutual obligations, with the plant access provisions drafted carefully.

Improvement rights. A recycler that develops a process improvement while handling a supplier's material should own it, and the supplier's standard terms may claim it.

Regulatory status of the material — waste, by-product, or end-of-waste — determines what permits are needed and whether it can cross a border. This is not an intellectual property question and it will stop the business faster than any intellectual property question will.

Trade and export considerations apply to shipments of recovered material, with classification, origin, and prohibition regimes engaged. See the Trade Compliance Checklist.

And branded material in the feedstock should be addressed expressly: whether the recycler may state the source, whether it must de-brand, and what happens if a brand owner objects to the association.

Clause bank

Content substantiation. Supplier shall provide, with each delivery, a Chain of Custody Record identifying: the origin of the material by category (post-consumer, post-industrial, or virgin); the collection or generation point; the intermediate handlers; the mass delivered; and, where the material carries a certification, the scheme reference and certificate number. Supplier shall retain supporting records for [5] years and shall make them available to Buyer, and to any certification body or regulator on Buyer's request, within [10] business days. Buyer may suspend acceptance of deliveries where a Chain of Custody Record is incomplete.

Environmental attribute allocation. Environmental Attributes associated with the Material, including recycled content attributes, carbon reduction credits, and any regulatory compliance credit, are allocated as set out in Schedule [X]. Neither party shall claim, register, sell, or retire any Environmental Attribute allocated to the other. Each party shall maintain records sufficient to demonstrate that no Environmental Attribute has been counted twice, and shall provide those records to the other on request.

Refurbishment disclosure. Refurbisher shall ensure that every Refurbished Product, and its packaging and any online listing, bears a clear and conspicuous statement that: (a) the Product has been refurbished; (b) the refurbishment was performed by Refurbisher and not by the Original Manufacturer; (c) the components replaced are as stated in the accompanying record; and (d) the warranty is provided by Refurbisher. Refurbisher shall not remove, obscure, or alter any serial number, and shall not represent the Product as new, as certified by the Original Manufacturer, or as carrying the Original Manufacturer's warranty.

Destruction and de-branding. Processor shall render all Marks on Returned Goods permanently illegible, or shall destroy the Marked Component, before any Recovered Material leaves Processor's facility. Processor shall not resell, transfer, or permit any third party to acquire any Returned Good in a form bearing a Mark. Processor shall provide a Certificate of Destruction for each consignment, identifying quantities and method, and shall permit Brand Owner to audit the process on [notice] no more than [twice] per year.

Feedstock process improvement. Improvements to Processor's recovery, sorting, or purification processes conceived or developed in the course of processing the Material are owned by Processor. Supplier shall have no claim to them by reason of having supplied the Material or of having permitted access to its facility. Improvements that incorporate Supplier's Confidential Information shall be owned by Processor but shall not be disclosed, licensed, or practised for any third party without Supplier's consent for [period].

Certification mark use. Licensee may use the Certification Mark solely on Products certified under the Scheme, solely for the period of certification, and solely in the form and with the qualifying language specified in the Scheme Rules. Licensee shall not use the Certification Mark in a manner suggesting certification of Licensee, of Licensee's business, or of any uncertified product. On lapse or withdrawal of certification, Licensee shall cease use within [30] days and shall withdraw or overlabel affected packaging in the market.

Worked scenarios

A content claim that cannot be proved. A packaging producer markets a bottle as containing fifty per cent post-consumer recycled resin. A competitor challenges the claim. The producer's supplier bought the resin from a broker who bought it from a processor, and no chain of custody record exists past the broker. The resin may well have been what it was said to be; nobody can show it. The claim is withdrawn and the producer's other claims are re-examined by the same competitor. The clause that would have prevented it costs a paragraph in the supply agreement.

A refurbishment programme that becomes infringement. An independent refurbisher sells reconditioned devices on a marketplace. The devices bear the manufacturer's mark, the listings say "refurbished" in the title, and the packaging is generic. The manufacturer sues. The Champion Spark Plug analysis turns on whether the disclosure is adequate given the extent of the reconditioning — and here the refurbisher replaced the battery, the screen, and the housing, which is a materially different article. The settlement requires disclosure on the device itself, a different colour housing, and a statement of the components replaced. The business continues; it would have continued more cheaply with the disclosure designed in.

De-branded material that reappears branded. A brand owner sends returned goods to a processor with an obligation to destroy the marks. Units appear for sale in another market, branded, with serial numbers matching the returned consignment. The processor's subcontractor was selling saleable units rather than destroying them. The contract required destruction and provided no certification, no audit, and no flow-down to subcontractors. All three were available at signature.

A mass balance claim under scrutiny. A chemical recycler sells output attributed as recycled under a mass balance methodology while the physical output is largely virgin-derived. The claim complies with the certification scheme. A regulator takes the view that consumers understand "recycled content" as physical content, and that the label is misleading without a prominent explanation of the accounting. The lesson is that scheme compliance is not the same as claim substantiation, and a claim that requires a footnote should carry one.

Failures that recur

A content claim without chain of custody past the first supplier.

Environmental attributes double counted because nobody allocated them.

Refurbishment disclosure on the box but not on the product.

A destruction obligation with no certification, audit, or subcontractor flow-down.

Mass balance attribution presented as physical content.

"Recyclable" claimed where no collection exists for most consumers.

A general "sustainable" or "circular" claim with no qualification and no substantiation.

A process patent that cannot be detected in a competitor's plant, with no composition or product-by-process claim to fall back on.

Plant tours given to prospective customers who are also prospective competitors.

Collaboration with a university or a brand partner with no background and foreground allocation.

Improvement rights claimed by a feedstock supplier in its standard terms.

And a firmware access lock that makes an otherwise lawful refurbishment impossible.

Part six: sector variations

The analysis shifts materially with the material, and applying a plastics framework to electronics or textiles wastes most of the effort.

Plastics. Content claims dominate, mass balance is contested, and the technology divides between mechanical recycling with well-understood economics and chemical recycling with novel process chemistry and heavy patent activity. Feedstock quality is the operating constraint and contamination is the recurring dispute. Certification schemes carry most of the substantiation.

Electronics. Software access controls are the principal obstacle, data sanitisation is a compliance obligation in its own right, and the value is concentrated in components and precious metals rather than in bulk material. Refurbishment and parts harvesting produce the sharpest trademark and firmware questions. Serial number handling and warranty representations require care.

Textiles. Fibre-to-fibre recycling is technically difficult and commercially nascent; most "recycled" textile claims rest on bottle-derived polyester rather than on garment recovery, which is a substantiation point worth being precise about. Blended fabrics defeat most separation processes, and the sorting technology is where the patents are.

Batteries. The chemistry is proprietary, the recovery processes are heavily patented, and the regulatory layer — transport classification, permits, and producer responsibility — is more restrictive than in any other stream. Cell makers assert rights in cell design and in the recovered material specifications, and feedstock agreements should address what the recycler may publish about the composition of what it processed.

Construction and demolition. Volume is enormous, technology is simple, and the intellectual property questions are mostly about certification and claims rather than about process protection.

Metals. A mature commodity industry with established chain of custody practice; the newer questions are about low-carbon attributes attached to secondary metal and who owns them.

Food and organics. Composting and anaerobic digestion, with claims about compostability that are heavily regulated and frequently overstated, and with certification marks that carry real weight.

And packaging generally sits across all of them, with producer responsibility schemes, labelling requirements, and content mandates arriving at different speeds in different jurisdictions.

Part seven: diligence and transactions

Claims exposure first. List every public claim the business makes about content, recyclability, or carbon, and test whether the substantiation file exists and is current. This is the largest contingent liability in most circular businesses and it is rarely surfaced by the seller.

Chain of custody depth. How far back does the documentation actually reach, and does it survive the brokers in the middle? A business that buys from traders usually cannot substantiate to origin.

Environmental attribute allocation. Whether the attributes the business claims are also being claimed by its suppliers or its customers. Double counting is common and, once identified, difficult to unwind.

Process technology position. Patents held, their detectability, whether composition or product-by-process claims exist, and whether the trade secret programme meets the reasonable measures standard. A business whose entire process advantage is unmarked and undocumented has an asset that leaves with its plant manager.

Collaboration agreements. Every joint development with a brand owner, a chemical company, or a university, with the background and foreground allocation extracted. Grant-funded work carries its own conditions.

Feedstock security. Term, volume commitments, specification, contamination allocation, and what happens on a change of control. A plant with no committed feedstock is a plant with an uncertain future regardless of its technology.

Take-back and processing contracts on the brand side, with destruction obligations, certification, audit rights, and subcontractor flow-down tested rather than assumed.

Permits and material classification, which is not intellectual property and which will determine whether the business can operate at all.

Marks and certifications held, their scope, their renewal status, and whether the certification schemes permit transfer on a change of control.

And open source and vendor terms in any sorting, vision, or process control software. See Copyleft and Consequences and the AI Procurement Checklist.

Part eight: design for circularity and the upstream conversation

The most valuable work in this practice happens before the product is made, and intellectual property counsel is rarely in the room for it.

Design for disassembly — reversible fasteners, labelled polymers, accessible batteries, and modular components — determines whether a product can be recovered economically. It is an engineering decision with a legal consequence, since producer responsibility obligations and content mandates increasingly attach to products that were designed without them in mind.

Material passports record what a product contains, in a form a recycler can read. They raise a straightforward intellectual property question — a full bill of materials is a disclosure of formulation — and a straightforward answer: disclose at the level the recycler needs, which is usually polymer type and hazardous substance content rather than the proprietary additive package.

Standardisation of formats, fasteners, and labelling improves recovery and reduces differentiation, which is why manufacturers resist it and why it tends to arrive by regulation rather than by agreement. Participation in a standards body carries the ordinary licensing commitments where a participant holds reading patents.

Modularity and repairability requirements are becoming regulatory rather than voluntary, and the design filings on visible components that a manufacturer files for aftermarket control may become unenforceable against spare parts as those rules develop.

Take-back designed in is cheaper than take-back retrofitted, and the processing contract can be negotiated before the volumes exist rather than under time pressure.

Content mandates requiring a minimum recycled proportion create demand for feedstock and, with it, a substantiation obligation that reaches back through the supply chain to a producer who has never had to document anything.

And the honest framing for a brand client is that circularity obligations are arriving on a schedule the business does not control, that the design decisions being taken now determine the cost of complying, and that the intellectual property strategy built around aftermarket control may be actively counterproductive within a few years. That is an uncomfortable conversation and it is more useful than another design filing.

A ninety-day programme

Weeks 1–2. Inventory every public claim: content percentages, recyclability, compostability, carbon, and general terms like "circular" and "sustainable". Match each to its substantiation file and stop any claim whose file cannot be produced.

Weeks 3–4. Trace chain of custody for the three highest-volume input streams to their actual origin, and identify where the documentation breaks. Amend the supply agreement template to require the chain of custody record.

Weeks 5–6. Map environmental attributes: what is claimed, by whom, on which material, and whether any is claimed twice. Allocate expressly in the template.

Weeks 7–8. Assess the process technology position: patents held and their detectability, whether composition or product-by-process claims are available, and whether the trade secret programme meets the reasonable measures standard. Restrict plant access accordingly.

Weeks 9–10. Review take-back and processing contracts for destruction obligations, certification, audit rights, and subcontractor flow-down. Audit one processor.

Weeks 11–12. Review certification scheme compliance, mark usage, and the qualifying language on packaging. Correct anything that presents mass balance attribution as physical content.

Throughout. Add the chain of custody and environmental attribute clauses to every new feedstock agreement from week one, since they cost nothing at negotiation and are unobtainable when a claim is challenged.

Two documents worth keeping current

The claim substantiation register. One row per public claim: the exact wording, where it appears, the product or material it attaches to, the evidence relied on, the date the evidence was last verified, and the person accountable. A claim without a current row should not be in the market.

The chain of custody map. One row per input stream: the origin category, the collection point, every intermediate handler, the documentation obtained at each step, the certification scheme if any, and the depth to which the trace actually reaches. This is what an auditor, a certification body, a regulator, and an acquirer will each ask for, and assembling it retrospectively is close to impossible.

One paragraph to remember

A circular business runs on other people's material, other people's rights, and its own claims. Exhaustion lets you take the product apart; disclosure lets you sell it refurbished; chain of custody lets you say what it contains; and the feedstock agreement decides whether you have anything to process. Protect the process with composition and product-by-process claims where the process itself is undetectable, allocate environmental attributes before somebody counts them twice, and never make a claim whose substantiation file you could not produce within three days.

Part nine: enforcement, and who actually sues

Enforcement in this sector is unusual because the parties with rights and the parties with grievances are frequently not the same.

Brand owners suing refurbishers is the most common pattern, and it usually settles on disclosure terms rather than on a prohibition, because the underlying business is lawful and the dispute is about how it is presented.

Competitors challenging claims under 15 U.S.C. § 1125(a) is the fastest-growing category, because a false content claim is a direct competitive injury and the remedy includes damages and corrective advertising. A competitor with a genuine substantiation file has both the motive and the standing.

Certification bodies enforcing scheme rules through the certification mark, with cancellation exposure for the scheme itself under 15 U.S.C. § 1064 if it fails to control use.

Regulators pursuing green claims through consumer protection authority under 15 U.S.C. § 45 and its state analogues, with the settlements typically requiring substantiation programmes rather than merely payments.

Consumer class actions over recycled content and recyclability labelling, which have become routine in some jurisdictions and which turn on what the reasonable consumer understands rather than on what the certification scheme permits.

Technology disputes between processors over equipment patents and trade secrets, usually triggered by personnel movement, and resolved on the strength of the departing employee's forensic record.

And feedstock disputes over specification, contamination, and attribute allocation, which are contract claims and are the sector's most common litigation by volume.

What this means for strategy. A circular business is more likely to be a defendant on claims than a plaintiff on patents. Budget accordingly: the substantiation file is a more valuable defensive asset than the patent portfolio, and the money spent assembling it will do more work than the money spent filing.

Part ten: the three-day test

The quickest diagnostic on a circular business takes three days. Pick the single most prominent claim the business makes and ask for five things.

The exact wording as it appears in the market, on packaging and online. The evidence relied on to support it, in the version current when the claim was last reviewed. The chain of custody documentation for the input stream the claim depends on, traced to origin rather than to the first broker. The allocation record showing that no environmental attribute in that stream has been claimed by anybody else. And the date somebody last checked that the formulation has not changed since the claim was written.

A business that produces all five has a defensible position and will win a competitor challenge. A business that produces two has the ordinary position, and the missing three are the ones a challenger will ask about first. A business that produces none is making a claim it cannot support, which is a decision somebody made by default rather than deliberately — and which is the single most common finding in this sector.

A note on where the sector is going

Three shifts will change this practice within a few years, and each is already visible.

Content mandates become binding. Where a minimum recycled proportion is required by law rather than chosen for marketing, the substantiation obligation becomes a compliance obligation with penalties attached, and the chain of custody documentation moves from a commercial nicety to a condition of sale.

Digital product passports become mandatory in some jurisdictions, which forces the disclosure conversation that manufacturers have been avoiding and creates a machine-readable record whose ownership and access rules nobody has settled.

And design rules displace aftermarket strategy. Repairability, disassembly, and parts availability requirements will make some of the design filings and software locks that manufacturers rely on either unenforceable or commercially untenable. A brand whose aftermarket position depends on those tools should be planning its replacement rather than defending them.

The practitioners who will be useful in that environment are the ones who understand that circularity is not an environmental topic with a legal appendix. It is a set of documentation obligations attaching to material flows, and the businesses that treat it as such — registering claims, tracing custody, allocating attributes, and designing for what is coming — will be the ones whose positions survive.

Key Authorities at a Glance

Exhaustion, repair, and refurbishment. Impression Products, Inc. v. Lexmark International, Inc.; Quanta Computer, Inc. v. LG Electronics, Inc.; Aro Manufacturing Co. v. Convertible Top Replacement Co.; Champion Spark Plug Co. v. Sanders; Kirtsaeng v. John Wiley & Sons, Inc. for the copyright analogue.

Trademark and material differences. 15 U.S.C. § 1114; 15 U.S.C. § 1125; 15 U.S.C. § 1127; Lever Brothers Co. v. United States; K Mart Corp. v. Cartier, Inc.; Barcamerica International USA Trust v. Tyfield Importers, Inc..

Certification marks. 15 U.S.C. § 1054 on registration; 15 U.S.C. § 1064 on cancellation for failure to control; 15 U.S.C. § 1052 on registrability generally.

Advertising and claims. 15 U.S.C. § 45 on deception; 15 U.S.C. § 1125(a) for competitor false advertising claims; POM Wonderful LLC v. Coca-Cola Co. on the interaction between a regulatory scheme and a Lanham Act claim.

Patents. 35 U.S.C. § 101; 35 U.S.C. § 102; 35 U.S.C. § 103 with KSR International Co. v. Teleflex Inc.; 35 U.S.C. § 112; 35 U.S.C. § 271 including subsection (g) on products made abroad by a patented process; 35 U.S.C. § 295 on the burden of proof.

Software in products. 17 U.S.C. § 117; 17 U.S.C. § 1201; Sega Enterprises Ltd. v. Accolade, Inc. on reverse engineering.

Trade secrets. 18 U.S.C. § 1836; 18 U.S.C. § 1839; Rockwell Graphic Systems, Inc. v. DEV Industries, Inc..

| Authority | Governs | Practical consequence | | --- | --- | --- | | Impression Products | Exhaustion | The sector's foundation | | Aro | Repair v. reconstruction | Where remanufacturing crosses a line | | Champion Spark Plug | Refurbished resale | Disclosure is the requirement | | Lever Brothers | Material differences | When the mark may not be used | | 15 U.S.C. § 1054 | Certification marks | Owner must not produce the goods | | 15 U.S.C. § 1064 | Cancellation | Failure to control kills the mark | | 15 U.S.C. § 45 | Deception | Substantiation before the claim | | 35 U.S.C. § 271(g) | Offshore process use | Reaches imported product | | 35 U.S.C. § 295 | Burden shifting | Helps against hidden processes | | 17 U.S.C. § 1201 | Access controls | The refurbisher's principal obstacle | | 18 U.S.C. § 1836 | Trade secrets | Where process parameters live | | POM Wonderful | Claims overlap | Regulatory compliance is not a defence |