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

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?"

Comments

So, America...

[nordicfrost]

Has your patent legislation done any good for you lately?

(Not that ours has)

Market can solve this, buy Canon

[astrashe]

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.

Re:Market can solve this, buy Canon

[ponxx]

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.

Yea but.

[Pharmboy]

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).

oh, this is BS

[erc]

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?