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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?"
I'd be more than willing to spend slightly more money for a printer that is actually built to be used more than 6 months before either falling apart (cannon,lexmark), or being superceded by the same printer under a different model number that uses totally different replacement cartridges (HP).
Look at the crap that printer manufacturers are pawning off on people nowdays. You got your printer selling at like $70US, and refills selling at $50US. It just makes no sense. If you're like me and only print when absolutely necessary, then by the time your ink runs out you might just as well buy a whole new printer and forget about the new cartridges altogether.
"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. The Arizona Cartridge Remanufacturers Association Inc. (ACRA) had charged in a lawsuit filed in September 2001 that the program, formerly known as Prebat,e was illegal under California law because it constituted unfair and deceptive business practices as well as deceptive advertising."
Right. You tell me where in there it says that one cannot refill their own cartridges and I'll mail you a $100 dollar bill. All this says is that you can get some rebates and crap. It doesn't "restrict" anything, as the slashdot post would like you to believe. Next time, read something before creating a fuss about it. (Who runs this place, a 5yr old kid?)
I just replaced my old Canon with a new i550 two weeks ago. The deciding factor was ink cost. Despite good reviews on both HPs and Lexmarks (along with the Canons), throwing in the cost of refills priced everything else out of the market. And not only is Canon ink cheap, the printers make very economical use of it. HPs and Lexmarks are real guzzlers by comparison.
Until their inks become affordable, I won't even consider other brands.
Lee Kaiwen, Taiwan
Speaking with my brother, a mechanic, on this subject just recently, I learned the following. It is getting close to impossible to work on cars these days without first using computer diagnostics. Each of these systems is specific to the automobile's make. Moreover, diagnostic systems are proprietary.
Gone are the days when you could work on your own car. A friend of my brother -- who my brother says is an excellent amateur mechanic -- tried to fix his own car and ended up making it worse. The reason? He lacked the diagnostic equipment, and there is just no way to begin without first using it.
Even independent shops are being hurt by this, since they must purchase the equipment for each manufacturer whose cars they wish to service, and the manufacturers change their systems every few years. Obviously, the "authorized" repair shops at the individual dealers have an advantage.
It's well known that the profit margin on automobiles is growing more narrow. Companies are looking to make money by offering financing and through parts and repairs. They have an incentive to get you to deal with them exclusively.
They haven't gotten to prohibiting "unauthorized" repairs directly; but they are getting more and more successful at a de facto prohibition.
If only Linus would go into car manufacturing!
quiquid id est, timeo puellas et oscula dantes.
McDonald's knew their coffee was hot enough to cause third-degree burns within a few seconds' contact, but said they did not intend on lowering the temperature, because as one juror put it "[McDonald's has a] callous disregard for the safety of the people."
Oh, and by the way, the lady initially asked for compensation for her medical bills but was offered a minuscule amount that wouldn't cover the bills. The jury awarded $2.7 punitive and $160,000 in compensatory damages (the latter reduced from $200,000 because she was partially responsible), but the judge reduced the punitive to $480,000. McDonald's then settled for something much less (sealed to prevent curious eyes from seeing).
Yeah, right.
There is no net positive impact for the economy from licensing fees. What one company gets, another pays. More earnings for workers in one firm means pink slips for another firm.
The only possible positive impact from patents is when more inventions are created because of the additional incentives. This is true to some extent in many industries. But it should be patently obvious that it's not the case for Lexmark. While you might be mislead by extremely low prices of new printers, benefits to consumers are not very clear, because of just as extremely high prices for cartriges. The price of one colour print is simply too great. This is an indicator that certain printer manufacturers do not turn the limited monopoly granted to them into public good. That can only mean one thing - the monopoly should be revoked, not strengthened by rulings such as this one.
Future Wiki -- If you don't think about the future, you cannot have one.
Consumers have been focussed on low up-front costs for years, the high cost of ink and paper are well-known but rarely figure in buying decisions.
It's not even as if people are kept in the dark, this has been common knowledge for as long as ink jet printers have been around.
And yet people choose cheap printers from HP and Lexmark ignoring the long term ink and paper costs... when companies like Xerox and Canon offer much cheaper ink, but slightly more expensive printers.
It's a classic choice facing consumers: low-upfront plus high maintenance, or high upfront and low maintenance. There are many examples:
- low-energy light bulbs (do you buy these?)
- better insulation in your home
- fuel-efficient cars
- season tickets for transport
- freezing food in the summer when it's cheap
- etc.
The fact is that people value choice, very highly. And when it comes to printers, many people prefer to pay more for ink if they can get away with lower upfront costs.
The manufacturers have generally responded by subsiding printers with ink, and their cartridges are designed to support this business model. You don't have to like it, and we apparently still have choices, but it's a valid business model and people who complain are just being fanciful. Ink is cheap, yes, but printer technology is not: someone has to pay, and it's either in the form of $199 printers and $5 ink, or $45 printers and $25 ink.
If my car only cost $995 new, I'd be very happy to accept restrictions on the spare parts I can use. Fact is, cars and printers are not sold on the same basis.
Ceci n'est pas une signature
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.
You're probably familiar with the yellow EnergyGuide stickers that appear on all major appliances. You've doubtless seen the EPA mileage estimates on new car window stickers. Those are both examples of useful government regulations that require informational stickers to assist consumers in making informed purchases.
We need similar requirements levied on printer manufacturers. The manufacturers should have to include a prominent sticker which states the life expectancy of the toner/ink cartridges in pages and the estimated cost per page based on the MSRP of the manufacturer's cartridge. If the manufacturer does not publish an MSRP, then the sticker should be based on the dealer cost plus some fixed markup (representative of typical markup within the industry). The test would be equivalent to an EPA mileage test. It would use standard pages (e.g. X% coverage) and there might be a number for "B&W Text" and another for "Color Graphics" on each printer (with B&W printers having an "N/A" for the "Color Graphics").
Armed with that information, a consumer could make an intelligent, informed decision. It would do a lot to discourage deceptive pricing ($40 printers with -- surprise! -- $50 ink refills).
I bought a Z23 recently because 1) it was cheap and 2) because the labeling very specifically indicated Linux support. It even specifically referred to my distro (at that time RH 7.2). After four frustrating days of trying to make it work I finally just returned it and got my money back. IMO Lexmark misrepresents their Linux support. The excellent LinuxPrinting.org site lists the Z23 as a "Paperweight", and IMO that evaluation is spot-on. Hey Lexmark: I'll never purchase your products again, so you can take your cartridges and stuff 'em yourself !
Please don't take offense, but this is entirely false. Economic arguments on Slashdot often treat the economy as a zero sum game of balance sheets, but it is quite the opposite. The "zero sum game" (if there is one, and I would argue there isn't) is in the money supply. Allow me to illustrate:
Corporation AB produces two products, I and II, with the same intrinsic cost of production, but product II also pays a 1% patent license fee, raising its production cost. For the sake of argument, lets say both products sell the same number of units at the same price - this is akin to comparing the same product to itself, with and without a license fee. (We get a similar result if we assume the more expensive product sells 1% fewer units at 1% higher price or sells at the same price and makes 1% less profit, and other similar cases, but I'll go with the easier math)
The economic impact depends on what AB does with the extra 1% profit from Product I and what the licensor does with the 1% patent license fee for product II. At one extreme, the extra cash can be put in a safe; at the other extreme, it can immediately be used to buy materials from suppliers or to pay more salaries or bonuses. In the middle is putting it in the bank, where part of it may be loaned or invested (and part retained as bank cash reserve under FDIC regs).
Money that is spent goes to someone else, who may, again, spend it on supplies, office equipment or other items, and is, in turn, likely to be spent again to he benefit of its new owner, ad nauseum.
It's not true that 'a dollar is a dollar', in a zero sum daily tally of balance sheets. A dollar that is spent has more positive economic impact than one tucked under your mattress. In hard times, we tend to hang onto our money, which often makes times a bit harder. In good times, we spend more freely, knowing more cash will be rolling in, making good times a bit better for everyone. Much of the affluence of the US economy relies (sadly, IMHO) on our 'consumer economy' where moe money is freely spent, and less prudently reserved.
I'm not saying patent license fees or taxes or any other expense is therefore automatically good. I'm saying that Zero Sum is a poor description of the economy - which is reflected in every capitalist or free market economic model. Regulation of the circulating money supply to stimulate the economy or prevent it from 'overheating' (inflation) does use a model that is a bit closer to 'xero sum' but even that is based on a more nuanced model than the one presented.
Earnings are not static end-of-quarter assets, they are also working capital.
as much as microsoft does - i.e. yes they will start to restrict rights. The recent judgement against a garage door opening firm (that siad competitors were free to creat interoperable and add-on components) was a blip in history. It will be overturned, or defeated by simple encryption. If competitors reverse engineer the equipment they will have to circumvent and thus will be criminally liable.
The trend (unmistakable) is towards less innovation and competition. The DMCA has enshrined mediocrity: any piece of crap tool (but one with half-assed encryption) can establish a non-competitive monopoly and be protected under law. Ther used to be laws *AGAINST* this.
America is less capitalist and less free market then people think - and the DMCA is the most draconian and totalitarian anti-free market legislation yet devised. The US is more like Britain during the period when its empire began to decline: still the big cheese but soon to be blown out of the water!
Start up tech firms can look to Russian, India, and China as massive markets that are gaining on the US.
Oh, that's easy. Doctrine of first sale. If you really sold it to me, I can do what I want. If you are leasing it to me, that's another story because you and I agreed that you own the thing. If you don't care that I throw the thing in the trash all your other conditions are bogus.
Your "prebate", which is essentialy fair market value for your outrageously patented printer cartrige is a farce as well. The root problem here is that Lexmark can get patents on their toner cartridges that effectively keeps anyone else in the world from making them. The most "innovative" thing the company has done is add a lock out chip. By charging an outrageous amount for normal new cartidges that no one else may make and convincing purchasers that they don't really own the cartidge, Lexmark seeks to suck as much money from their users as possible by keeping them from doing what most normal people would do: put tonner into a perfectly usable part.
I will never buy or recomend a Lexmark printer. They have always been the worst on the market. I suspect it's because the company has such poor morals. The whole thing is dishonest and no on should do business with dishonest people.
Friends don't help friends install M$ junk.
Cheap inkjet printers that are nice do exist, just make sure you keep a few things in mind:
- If you can hold out until mid to late November, you'll see all kinds of holiday and discontinued model sales, through the end of the year.
- Assuming you get a color inkjet, you probably will want to look for a model with multiple ink cartridges, so you don't have to waste other colors when one color goes.
- Also, when you get it, make sure that in whatever operating system you use (be very careful you're not buying a "winprinter" if you need it for *NIX, unless you can get an emulation package) you set the driver to print in greyscale by default - most drivers set to color by default, and "black" is not black, but is a blend of the other inks...
When I bought my HP, it was for $50 from CompUSA, down from $99 - and that was in 1999. Later, I bought a Canon at a lesser discount from Fry's, in 2001, because it uses cartidges that are more expensive to replace all at once, but less expensive overall because I only refill the empty colors. I gave my sister the HP, which is still very nice (and in fact I miss the dedicated envelope slot). HP is so popular that the third party manufacturer prices are probably half the HP price. Canon alternatives, on the other hand, are around two thirds. I have to say, at $10 or $12 total per cartridge, the premium for Canon's name and warranty seems worth it.
And don't forget, no matter what brand of printer you eventually get, some office supply stores will give you free reams of paper or a small store credit for each empty cartridge you return, because most of these cartridges are specifically designed to be recycled and reused, to the point where the stores bank on making a profit returning these. PLEASE do this, not just for the free paper, but because of the environmental impact... which is another reason not to use Lexmark!
Get off my launchpad!
That's pretty close to pasteurization temperature. I don't know about you, but if I'm desperate enough to get my coffee from an assembly line that creates it in close proximity to beef, fish, poultry, and dairy products, and holds it in a pot that probably doesn't get clean very often (try their iced tea someday - it's often from the same pot, and tastes like it), I want it as close to sterile as possible.
If you really want to complain about fast food drinks, check out the condition of the soda fountain spout covers. I didn't even know they existed until one very dirty one fell in my drink at an AMC theater. Yuck!
Get off my launchpad!
The economic impact depends on what AB does with the extra 1% profit from Product I and what the licensor does with the 1% patent license fee for product II.
Like the zero-sum argument, that focuses on the minutae of the match and misses the bonfire.
The situation is actually more like this:
Company A has an invention. The invention reduces the cost both of making a widget and of operating it once it's made. Widgets are a very popular and useful. Several companies make different brands, models, and styles of them for different applications (and the companies specialize in different sytlyes and applications rather than all making all sorts and competing in all widget submarkets). Before the rollout of the invention the market is in equilibrium.
Company A can apply the invention to its new model of widget. The cost savings of the invention on manufacturing of the widget can be applied to increasing the profit margin and/or lowering the price and increasing the market share - both by gaining customers from competitors and from pricing widgets within reach of additional customers. The cost savings of operation accure to the customers - though the reduced cost can be used as a reason to raise the price of the widget somewhat.
But all these pricing strategies simply redistribute the economic benefits of the invention among various parties. The total economic benefit to the overall economy is the cost-saving per widget times the number of widgets, plus the cost savings of using a widget versus NOT using a widget times the number of additional widgets being used due to the price reduction.
So the more invention-enabled widgets in use, and the more widgets in use generally, the more the benefits to the economy.
Company A's widgets have 20% of the widget market, mostly in the widget-in-a-boat application. Company A COULD hold the invention closely, only letting it be used with ITS widgets, and try to take over more of the market - like by going into competition with B's widget-in-a-truck product. A has to invest a lot of money in this and will not capture a significant fraction of the widget-in-a-truck market before the technology moves on or the patent expires. The benefits to the overall economy is just that from the improvements to A's widgets and the extra widgets A sells.
Alternatively, A can go to B and say: "Look at this neat patent. I'll license it to you for use in trucks, cars, and vans. You pay me this fee that splits the manufacturing benefits 50/50 between us and price it any way you like for your customers."
A is happy: They get half the cost-savings from B's new improved widget plant.
B is happy: They get the other half of the benefits, and sell a lot more extra-cost-option widgets. And they don't have A getting into the car-truck-and-van business and snatching their customers.
B's customers are happy: They get cars, trucks, and vans with the new improved widget, which costs less to run and does a better job.
And the benefit to the total economy is the sum of the per-unit benefits of the improved widget times a MUCH larger number of widgets.
The patent license fee didn't do anything to the overall economic benefit - it just transferred part of the benefit of the use of the invention in manufacturing from B to A - in trade for letting A build improved widgets. But the LICENSING ITSELF enabled a MUCH LARGER number of widgets to go into service, much faster and in more applications. THAT is what created the additional benefit to the general economy.
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way