- This topic has 0 replies, 1 voice, and was last updated 9 years, 9 months ago by
.
-
Posts
-
Printer ink retailers await ruling on ‘little piece of plastic’
It’s
an electronic chip that has sparked a lengthy legal fight that could
potentially result in hundreds of millions of dollars in damages and
turn the toner cartridge industry on its head.Facing a federal jury
Monday, the CEO of the North Carolina company being sued by printer
giant Lexmark tried to put things in perspective.”It’s just a little
piece of plastic,” said Static Control CEO Ed Swartz, defending his
company’s chip from the one Lexmark claims it copied in violation of
federal patent law.The chip in question may be little, but this
trial is enormous to the industry. It’s particularly big for Static,
which makes its business by selling the parts required to rebuild
printer cartridges, allowing corporate customers to refill their ink
for far less money than they would pay in buying new cartridges from
Lexington, Ky.-based Lexmark.But the arguments being considered by a
U.S. District judge and jury, who began hearing Static’s side Monday,
are far more specific.They deal with Lexmark’s “prebate”
program, as it was formerly known, which allows upfront discounts for
customers who promise to send their cartridges back to the company when
they’re empty.Those who turn down the discounts are allowed to sell
them to other companies willing to refurbish them, but an encrypted
chip inserted inside the prebate version was designed to block its
reuse by anybody else. That is, until Static figured out a way to
duplicate the chip.The legal battle began in 2002, when Lexmark sued
Static Control under the Digital Millennium Copyright Act, a federal
law to prevent people from tampering with technology. It has since
included a countersuit by Static alleging Lexmark’s prebate program is
a monopoly, and the case has made it all the way up to a U.S. appeals
court. Now it’s back in Kentucky this week for what could be the final
front.”It’s a huge issue for the remanufacturing industry,” said Jim
Forrest, an analyst with Lyra Research in Boston. “The outcome of this
trial will have a big bearing on that. Folks in the industry are
anxiously awaiting a verdict.”Last year, toner cartridges generated
more than $30 billion in revenues worldwide, and remanufactured
versions account for nearly a quarter of that, Forrest said.Although
other companies haven’t followed Lexmark’s lead on a prebate program,
Forrest predicts some might, should Lexmark prevail.Swartz contends his
chip wasn’t copied, and even includes components Lexmark’s doesn’t
offer, such as a sensor that prevents dark smudges from showing up at
the end of a toner cartridge’s lifespan.He says his company is only
rebuilding prebate cartridges that would otherwise be thrown away and
views the matter as more of an abandoned property case, not a question
about patent violations.”It just seems ludicrous to me that somebody
could say they have a claim against garbage,” he said.But, during
cross-examination Monday, Lexmark attorney Andrew Copenhaver pressed
Swartz on whether he had any proof that the cartridges would have gone
to landfills if they didn’t end up at Static Control. Swartz said it
was common sense.”You’re just making your own assertions to this
without any reasonable facts or any research,” Copenhaver
said.Attorneys for both sides declined to comment afterward, and
neither Lexmark nor Static Control returned calls seeking comment. The
trial could last several more weeks.
- You must be logged in to reply to this topic.