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 user 2005-09-10 at 11:25:00 am Views: 50
  • #12775

    Lexmark Wins the Right to Sue Its Customers
    If your business is considering a laser printer purchase anytime soon,
    I’d like to make sure you’re aware of one fact. After a protracted
    legal struggle, Lexmark has succeeded in getting federal district court
    sanction to sue its customers if they violate the company’s “boxwrap”
    license agreement. And, while Lexmark has at least hinted that suing
    customers is not its intention, you might not want to take the chance.

    No sooner did I remark the other day how refreshing it was to see a
    court render a good decision for once then word came of two more recent
    federal court decisions that are just the opposite. The ruling to
    uphold Blizzard’s EULA ban of reverse engineering is so depressing that
    I’m just not going to even talk about it right now. But the Ninth
    Circuit’s decision in the ACRA vs. Lexmark case deserves our attention,
    if only because it’s one in which it’s clear what my readers can do
    about it.

    The litigation is the result of yet another attempt by Lexmark to use
    patent, copyright, and contract law to lock its printer customers into
    using its consumables. (In case you’re confused, this is a different
    Lexmark lawsuit than the one where the company tried to use the DMCA to
    block manufacture of compatible consumables.) ACRA, the Arizona
    Cartridge Remanufacturers Association, was asking the court to declare
    Lexmark’s shrinkwrap-like “Prebate” license agreement on its laser
    printer toner cartridges unenforceable. On the outside of the cartridge
    package in bold type it says “Return Empty Cartridge to Lexmark for
    Remanufacturing and Recycling” followed by this license:

        “Please read before opening. Opening of this package
    or using the patented cartridge inside confirms your acceptance of the
    following agreement. The patent cartridge is sold at a special price
    subject to a restriction that it may be used only once. Following this
    initial use, you agree to return the empty cartridge only to Lexmark
    for remanufacturing and recycling. If you don’t accept these terms,
    return the unopened package to your point of purchase. A regular price
    cartridge without these terms is available.”

    Unfortunately, the court upheld the lower court’s ruling that this
    “boxwrap” agreement does constitute a contract between Lexmark and the
    customer. The judges seemed to have no problem with the fact that any
    manufacturer could add similar post-sale usage restrictions on its
    packaging in order to eliminate aftermarket competition, or perhaps
    third-party support, or even the right of customers to repair, modify,
    refurbish, or resell the products they’ve purchased. Oh, well, it’s not
    like we didn’t already know which side most of our judges are on when
    the interests of consumer and business conflict.

    Even this court, however, couldn’t help but notice one interesting
    contradiction in Lexmark’s position. “According to Lexmark, its
    post-sale restriction on reusing the Prebate cartridges does not
    require consumers to return the cartridge at all; it only precludes
    giving the cartridge to another remanufacturer,” a footnote in the
    ruling noted. “The plain language of the contract does not clearly
    reflect this position.”

    Indeed, the language of this “contract” is plain enough. If you don’t
    ship the empty cartridge back – and Lexmark told the court it only gets
    about half of them – then the U.S. Court of Appeals says you’re
    violating a contract and infringing Lexmark’s patents. And if that’s
    not the message Lexmark officials wants to send us all, why did they
    write their license agreement that way and why are they in court
    essentially arguing for the right to sue their customers?

    What speaks even more plainly is the clear purpose of all Lexmark’s
    legal maneuverings: to restrict customer choice. Yes, Lexmark isn’t the
    only printer manufacturer using expiration chips or other lockout
    devices to boost consumable sales, but only Lexmark seems determined to
    use the courts as well as technology. So the next time you’re pondering
    which laser printer to buy, you might to send Lexmark a plain message
    while you’re still legally free to make your own choice