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U.S. Court: Lexmark Can Tie Rebates To Refills

Posted by timothy on from the how-conveeeenient dept.

SteveOU writes "Lexmark won a favorable judgement in its attempt to prevent competitors from refilling its cartridges. The judgement, issued by Judge Saundra Brown Armstrong of the U.S. District Court for the Northern District of California, was a big loss for 'the rest of us,' reading in part "Because of its patents, Lexmark has the right to impose conditions on the sale of its patented product. It may restrict a purchaser's ability to repair it, which is what in essence the single-use condition does." What now? Will GM prohibit unauthorized repairs of its patented car components?"

9 of 365 comments (clear)

  1. So, America... by nordicfrost · · Score: 5, Insightful
    Has your patent legislation done any good for you lately?


    (Not that ours has)

    1. Re:So, America... by macdaddy357 · · Score: 3, Insightful

      Here is an answer. Boycott lexmark. You need a printer? May I suggest Brother, Canon, HP, Xerox, the list goes on and on. Boycott Lexmark into bankruptcy for this insult! Don't buyanything they make.

      --
      How ya like dat?
  2. Market can solve this, buy Canon by astrashe · · Score: 5, Insightful

    The market has a solution for this. Buy Canon printers instead of Lexmarks. Canon lets you refill their cartridges, and they let other people sell compatible cartridges. Consequently, even genuine Canon cartridges are cheap.

    Everyone always says that the printers are sold at a subsidized price so the company can get the money back on cartridges, but my Canon i320 only cost me $40 at MicroCenter. I can buy black replacement cartridges for $6.50 at Wal-Mart. That's cool because Wal-Mart is open 24/7 - if I run out of ink at 2am, I can buy more, and buy it for a very reasonable price.

    Lexmark's behavior would be a serious problem if we didn't have any options. But we do, and instead of trying to litigate them into submission, it probably makes more sense to encourage people to check out the prices of cartridges and to examine the policies on cartridges from various manufacturers, and to buy from the good guys (i.e., from Canon).

    I'm always amazed that magazines don't talk about cartridge costs in their printer reviews, but I think that if everyone just got in the habit of including operating costs in any discussion of printers, the problem would go away on its own. For me personally, operating costs are more significant than print speed or even print quality. It's a huge aspect of printing that many reviews ignore completely. And stores have a vested interest in pushing the machines that are expensive to refill - they get a taste of that money as well.

    My i320 was very cheap, although it's not super fast, the output does look very good. So I didn't have to trade off quality. The speed, I think, was sacrificed for the $40 printer cost and not for the low cartridge cost. I'm sure if I had spent more, I would have gotten a faster Canon that would allow me to use cheap ink.

    The market really does tend to solve many of these problems. I'm not sure that litigation is necessary. Just remember, when you go to buy a printer, that Lexmark went to court for the ability to screw you on refill prices. Don't be a sucker, buy from somone else.

    1. Re:Market can solve this, buy Canon by ponxx · · Score: 4, Insightful

      I think in this case you're right. The market will solve such problems as there are plenty of competitors, and while the entry barriers to any market are high, the startup cost for making printers is not as expensive as some other products (e.g. processors).

      In general, I still think it is good if the legislature makes some rules as to how businesses are allowed to conduct themselves. One cannot propagate free trade but then allow companies to keep markets seperate by DVD region encoding, or by forcing exclusive agreements on dealers.

      The EU has recently ruled against Volkswagen who priced their cars differently in different european countries and then made sure the italian dealers would not sell to german customers.

      So hey, i'm all for free trade, but make sure it applies to all. Let me re-import Nike shoes from China if I want to, let me buy my DVDs where I like, give the consumers the transparency the corporate players demand from their suppliers.

    2. Re:Market can solve this, buy Canon by ScrewMaster · · Score: 3, Insightful

      Absolutely. There really is no such thing as a totally free market, of course, nor should there be: the government does serve a valuable role in this context. However, if the laws governing business tactics aren't applied with a fairly even hand, then we don't have anything even remotely resembling a a free market. The trouble with the DMCA is that it allows companies that are willing to spend enough money on lawyers to put themselves on higher ground, playing-field-wise. That, among other things, is why the DMCA deserves repeal and the officials responsible for it booted from office. The fact that such a sweeping, totally anti-consumer (and, ultimately, anti-business) law could ever have made it on the books just shows how far out of touch and corrupt Congress has become. All the DMCA is doing is giving businesses enough rope to hang themselves, and us too, by allowing the marketplace to revert to an approximation of lessaiz faire.

      An enlightened capitalist (assuming there are any still living in the U.S.) would recognize that, at the core, laws and policies which are anti-consumer are also anti-business. There's X amount of income to be spent on products: if one company pigs a larger share of the goodies by questionable or illegal tactics then others in the same market will suffer. If they all do it then the consumer suffers, and other unrelated businesses will suffer. That's what is meant by a "level playing field" and is why we have laws governing such things. The buying public is supposed to decide which products deserve success and which fall by the wayside: companies abusing the DMCA to damage legitimate competition are trying to insulate themselves from the normal risks of doing business. My response to that is: TOUGH. If you can't stand the heat get the hell out of my kitchen.

      I'm dead-set against the idea of manufacturers placing arbitrary restrictions on the post-sale uses of their products, with the force of law behind those restrictions. DVD region coding is bad enough, but at least it doesn't affect the average consumer much here in the US (I don't know about Europe.) But blatantly anti-competitive moves like Lexmark's directly hit the consumer's pocketbook. Essentially, this goes to the core of what is considered "property." If an object is your "property" then you control it: you can do with it what you wish. When a vendor tries to force its customers to use products in a certain way (either directly, or indirectly by attacking a third party) then, in effect, that vendor is trying to maintain some level of ownership of that product. I don't buy it, and I won't buy anything from any company that tries to play that game. You want to keep control? Fine, then lease or rent your products, don't sell them.

      The parent is right. Time to kick Lexmark squarely in the wallet. I've never bought a Lexmark product (my personal opinion hovers somewhere between "low end" and "cheap junk") and now I probably never will. It would appear that overall poor quality extends to the very top of their corporate ladder. I'll stick with my HP Deskjet for now, thank you very much.

      --
      The higher the technology, the sharper that two-edged sword.
    3. Re:Market can solve this, buy Canon by JayBlalock · · Score: 3, Insightful
      When a vendor tries to force its customers to use products in a certain way (either directly, or indirectly by attacking a third party) then, in effect, that vendor is trying to maintain some level of ownership of that product.

      Exactly. I can *only* imagine what Adam Smith would say if he found out about the legalistic games that manufacturers use today to screw over their customers. Of course, people like to hail him as the Objectivist Patron Saint - folks tend to forget that even he conceeded that government intervention is sometimes necessary to prevent monopolies from taking root.

      As far as enlightened capitalists, there aren't any left in major US businesses. Why? Two words: Stock Prices. Companies today are concerned with nothing but keeping their stock prices high, and making their money off the stock market. As long as they can lie to investors and make their company appear stronger than it is, they can do whatever they want to the consumers and it doesn't really matter. It takes spectacular, over-the-top abuses to bring a company down. (ever stop to wonder what Enron could have done had they NOT gone down the path of full-blown evil, and had instead limited themselves to less obvious things?)

      So I'm sure Lexmark will turn around and issue a bunch of glowing press releases and stock reports speaking of how they just won a major legal battle to protect their endangered intellectual property rights, and profits are expected to rise in Q1 (thanks to the further jacking up of cartridge prices), and people will flock to buy their stock.

      --
      Bush: He's Liberal in all the wrong ways.
  3. Yea but. by Pharmboy · · Score: 5, Insightful

    From the original article:
    The rebate program by the Lexington, Ky.-based company offers an upfront discount to consumers who agree to return used cartridges only to Lexmark for refilling or recycling.

    This doesn't change anyone's ability to refill their own cartridges, and ties the rebate to the promise to use only Lexmark authorized supplies. HP has sensors in its newer printers that can tell if you use their supplies or others, which affects your warranty, similar. This is not as big of a deal as it is played out to be here, since you can always choose to not buy Lexmark. They don't have an monopoly, after all.

    This said, its still a crappy ruling, and it IS being appealed. Unfortunately, here in the States, most cases like this are finally settled on appeal, seldom at the first trial. Case in point is the recent attempt to put off the California recall. Our legal system may have plenty of flaws, but eventually it works (most of the time).

    --
    Tequila: It's not just for breakfast anymore!
  4. oh, this is BS by erc · · Score: 4, Insightful

    This is nonsense. The original poster obviously didn't read the ruling. "The rebate program by the Lexington, Ky.-based company offers an upfront discount to consumers who agree to return used cartridges only to Lexmark for refilling or recycling." What's wrong with that? The court is just upholding the company's right to offer an incentive to customers. No DMCA challenge implied, gang. Read the ruling before you post, huh?

    --
    -- Ed Carp, N7EKG erc@pobox.com PGP KeyID: 0x0BD32C9B What I'm up to: http://intuitives.mine.nu
  5. Canon printers are extremely good by DrXym · · Score: 3, Insightful
    I have an S750 with 4 seperate ink cartridges. Getting replacements is easy and cheap, there are drivers for Windows, Mac & and Linux and the thing has decent performance & quality. Replacements are $4 for a cartridge and I can even use a refill kit if I choose.


    Why the hell anyone would lock themselves into a proprietary solution where the cartridges / printer heads are small or half filled, chipped and cost $60 a pop is beyond me.


    All I can say is Canon kicks ass and Lexmark and the others suck! I would be extremely wary of buying anything from HP, Lexmark or Epson given their track record. Let's hope the EU puts an end to it.