Will Lexmark Have to Pay S.C.C. $1B for Violation of the Lanham Act?

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Will Lexmark Have to Pay S.C.C. $1B for Violation of the Lanham Act?

 user 2014-06-03 at 12:01:30 pm Views: 226
  • #2971

    Will Lexmark Have to Pay S.C.C. $1B for Violation of the Lanham Act?
    Below is an excerpt From Charlie Brewer of Action-itelligence and Enx Magazine

    The recent rulings in Lexmark’s two big cases is sure to lead to further legal actions in the near future and I predict we’ll hear more about each case before the current year is out. The OEM’s attorneys are no doubt feeling a little relief regarding the Ohio court’s ruling on Jazz Photo but I bet they are feeling at least a little apprehensive about the possibility of facing a false-advertising suit from Static Control for violating the Lanham Act.

    Although it is currently unknown how much Static Control is looking for in terms of damages and other awards, in its 2013 annual report, Lexmark told investors at one point, “SCC has stated in its legal documents that it is seeking approximately $17.8 million to $19.5 million in damages for the Company’s [Lexmark’s] alleged anticompetitive conduct and approximately $1 billion for Lexmark’s alleged violation of the Lanham Act.  SCC is also seeking treble damages, attorney fees, costs and injunctive relief.” As the case has progressed, SCC has adjusted these numbers and various courts have dismissed certain damages. Regardless, if Static Control will no doubt be looking for a significant amount and if the firm prevails in its false-advertising suit, Lexmark may have to write a big check.

    After a seemingly endless discovery phase, which included several requests for additional time that extended the case by a couple of years, it seems that Lexmark’s suit in the Ohio court will be heading to trial this year. If Lexmark can prevail in the matter, it will severely hamstring the remanufacturing industry’s ability to market cartridges base on an empty that a remanufacturer cannot prove was first sold in the U.S. It will be interesting, however, to see if any of the defendants mount another challenge to Jazz Photo or attempt to negate the territoriality requirements of patent law as the high court has now done with copyright law.  If Jazz Photo should be overturned, the floodgates will be open on importing empty cores and fundamentally change the way the remanufacturing industry sources its most valuable raw material—the empty.  It will also effectively end the Lexmark case in Ohio.

    One might argue that Lexmark is overly aggressive in its pursuit of protecting its intellectual property; or one might say that the firm is simply doing what any OEM should do to protect its patent protections.  Regardless, the firm keeps its legal team busy and it seems all but certain that lawyers for Lexmark will continue to work hard for the remainder of 2014.