Issue #0435/1 - Lexmark’s preliminary injunction against remanufacturer Static Control Components has been overturned by Appeal Court judges in the US.
In the latest ruling in a legal wrangle currently spanning 21 months, Lexmark’s injunction against Static Control Components Inc., forbidding the company from selling its Smartek chip, fitting toner cartridges for two models of Lexmark mono laser printer, was overturned this week by the US Court of Appeals for the Sixth Circuit. Appeal Court judges have referred the case back to the District Court in Kentucky for any further proceedings.
This action was brought by Lexmark in January of 2003, invoking the Digital Millennium Copyright Act in an attempt to prevent Static Control remanufacturing toner cartridges for two of its laser printers.
Section 1201 of the Digital Millennium Copyright Act was intended to provide legal teeth in the battle against internet piracy – especially software, music and films.
At the time, some industry watchers felt that Lexmark was hanging a noose around its own neck and that time, effort and money would be better spent combating counterfeiters and slave labour refill sharks rather than a company that is well respected in the business. Even Hewlett-Packard considered that Lexmark was stretching the case by invoking the act in this context.
Although, from its statement, Lexmark implies that it may still pursue action in this case, what is abundantly clear is that Lexmark is thoroughly unrepentant for having fought and lost (at the current standing) and plans to “continue to vigorously protect its intellectual property rights in this litigation and in any other instance where Lexmark believes that its intellectual property rights are violated”.
Ed Swartz, CEO at Static Control Components, is reported as saying that the courts decision means that “companies cannot abuse copyright laws to create electronic monopolies”.
Although the Digital Millennium Copyright Act makes it illegal to skirt around technological measures that prevent access to copyright material, or to sell a device that is intended to do so, there is specific provision made (along with several other exclusions) for activities that permit interoperability. It is this exemption that Static Control Components drew on to justify its manufacture of the chip that allows third party cartridges to be used in Lexmark printers.
It has become a generally accepted principle that toner and ink for printers is an area that should be open to competition and that the introduction of measures by a printer manufacturer (such as killer chips) that effectively prevent the user from expressing freedom of choice by purchasing third party supplies constitutes anti-competitive and anti trust behaviour.
Static Control Components Inc. manufactures and sells all the components and equipment needed for a company to remanufacturer toner cartridges for a wide range of laser printers from all of the major printer manufacturers and also some of the copier and laser fax manufacturers.
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