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Why Patent Law Shouldn't Block the Sale of Used Tech Products
An anonymous reader writes: Lexmark is best known for its printers, but even more important to its business is toner. Toner cartridges are Lexmark's lifeblood, and they've been battling hard in court to protect their cashflow. The NY Times has published an editorial arguing that one of their recent strategies is bogus: making patent infringement claims on companies who refill used cartridges. Think about that, for a moment: Lexmark says that by taking one of their old, empty cartridges, refilling it with toner, and then selling it somehow infringes upon their patents to said cartridges. "This case raises important questions about the reach of American patent law and how much control a manufacturer can exert after its products have been lawfully sold. Taken to their logical conclusion, Lexmark's arguments would mean that producers could use patent law to dictate how things like computers, printers and other patented goods are used, changed or resold and place restrictions on international trade. That makes no sense, especially in a world where technology products and components are brought and sold numerous times, which is why the court should rule in favor of Impression." The Times paints it as the latest attack on ownership in the age of DRM.
"Lexmark says that by taking one of their old, empty cartridges, refilling it with toner, and then selling it somehow infringes upon their patents to said cartridges"
The only thing it "infringes" on is their profits.
Just cruising through this digital world at 33 1/3 rpm...
The Times paints it as the latest attack on ownership in the age of DRM.
Only nobles and lord own land peon.
Welcome to subscription model everything, aka the internet of things, web 3.0, cloud connected pillows, etc.
What you do not own, you pay for in some way. What you do own you collect on, and guess what, there are only a few owners.
Silence is a state of mime.
Morally, of course, it's enough to want me to boycott the company, but legally, they may be in the right
The law may be on their side, but only
* If the patent infringement is not on the toner cartridge per se but on the method of refilling it, AND
* there is no non-infringing way to fill the cartridge that's economically viable, AND
* if the patent is legally sound. Patents whose claims are overly broad or which fail to take into account prior art may be shot down if someone else decides it's cost-effective to take the patent-owner to court or to ask the Patent Office to review the patent.
Yeah, it sucks, but short of either changing patent law or getting some court to rule that anti-trust and restriction-of-trade laws require the patent-holder to broadly license the patent to all comers on reasonable terms or make some other ruling that kills off this business practice, I don't see what can be done about it.
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
The context was a move by Xerox to use copyright to prevent users from substituting third-party printer cartridges for their own. Supposedly such a substitution would require reverse-engineering their copyrighted lockout software preventing substitute cartridges.
At the time, this very Lexmark attempt to prevent refill of cartridges came up, and supposedly there had been a court decision preventing Lexmark from enforcing this rule.
Because you get to be the first one to bring them to market in order to make a profit.
I think OSX for my homebuilt 16-core machine would be innovative. Then I'd be able to run Logic Studio on my own hardware.
One example of how patents have stopped innovation. How do we know there aren't companies out there who could make machines to run OSX better than what Apple makes?
We are a long, long way from the original intent of patents.
You are welcome on my lawn.
You dumb sonofabitch. Do you not know the difference between a corporate tax rate and how much a corporation actually pays?
http://money.cnn.com/2013/07/0...
Corporations in the US pay about as much as Ireland, which is known for it's low corporate tax rate. And less than Hong Kong.
The difference between the corporate tax rate in the US and the corporate tax rates in the rest of the developed world is that the rest of the world actually means what they say. It's not just a dodge to make citizens feel like corporations are paying their fair share, as it is in the US.
You are welcome on my lawn.
The theoretical rate is high, the actual tax paid is low. Tax expemptions and credits and offshoring of profits have allowed US corporations to legally avoid most of the taxes they once paid.
One court upheld it, another may not. The argument AGAINST Lexmark is pretty obvious. Two things argue FOR Lexmark. First, this has to do with discounted cartridges sold at a 20% discount IN EXCHANGE for agreeing to return them to Lexmark (and only Lexmark) for refurbishing. Cartridges without the discount and return agreement were widely available. Secondly, it's stipulated that the return provision was obvious on the signs and packaging, along with a statement "unrestricted catridges are available at Lexmark.com and elsewhere."
If I were the judge, I'd not allow Lexmark to REQUIRE consumers agree to those terms. But that's not what happened. I might ALLOW consumers to choose between an unrestricted catridge for $15 OR agreeing to return it in order to save $3. That's the case here. Consumers could have their cartridges refilled any where they please, or they could instead choose to get a discount by agreeing to return them only to Lexmark. In general, I have hard time making it illegal to offer consumers more choices.
Patent law does not prevent you from arranging anything in any configuration you want. It only prevents you from selling the result.
Very first paragraph of 35 USC 271:
(a) Except as otherwise provided in this title, whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.
Patent law (in the U.S. anyway) covers more than what you might believe.
Please stand clear of the doors, por favor mantenganse alejado de las puertas
Capitalism/fascism is where the corporations own the state. Communism is where the state owns the corporations. The results are similar, even if their philosophy is opposite.
Learn to love Alaska
Was every store required to carry both SKUs? If the answer is "no" (and given how valuable shelf space is, I'd bet that it is), they're effectively forcing customers to buy what is readily available. And even if the answer is "yes", they still probably don't have a case.
Normally, a physical product (as opposed to something that has actual copyright protection) cannot be licensed. It can be sold, or it can be rented. Either the customer owns it or they don't. If they do, then they can do anything they want to with it. Once a product is sold, the original manufacturer has no legal right to limit its use. The SCOTUS has consistently tossed out attempts at post-sale restraint.
If a product is rented, there must be a legal contract in place, which means, among other things, that the customer must clearly understand that he or she is just renting the product, rather than buying it. If it looks too much like a sale, once again, post-sale restraint gets tossed out. And that's true even for cases involving patents.
I'd be utterly shocked if Lexmark won this, assuming it bubbles up to a high enough court. There's way too much case law precedent saying that they should get their a**es handed to them. It would require the courts doing a complete 180 from their consistent position on this issue over the last century.
Check out my sci-fi/humor trilogy at PatriotsBooks.
https://en.wikipedia.org/wiki/.... Once they make it, or sell the rights to make it, the first sale doctrine trumps their IP claims on the device. I don't need Ford's permission to sell my car. Nor do I need Lexmark's permission to sell, resell, buy, or refill a used cartridge. They got paid for the first making of the device, and that's where their rights end.
Learn to love Alaska
But that's an agreement between the consumer and Lexmark. It has nothing to do with the refiller, they were never a party to the agreement.
Aren't the IP rights for the cartridge exhausted by the first sale doctrine?
"Lots of ranting, no substance. By buying a Lexmark cartridge you are agreeing to the following [...]"
Only, no, you are not.
1) I was not informed about the contract *prior* to the exchange of money to be settled. All the conditions I'm bound to are those set before the money exchange.
2) Even without 1, this is an adhesion contract on terms I wasn't able to negotiate and the clause you cite is void and null because of the first-sale doctrine.
"In a world without patents or copyright, there would be only curiosity left to drive innovation."
That's obvious bullshit.
The real thing you wanted to say is "in a world without financial incentives only other non-financial incentives would drive innovation".
What is "full price"? We're not talking about a product sold directly by the manufacturer here; it's a product sold by a store at an arbitrary price point. The discounted ink cartridge at Office Depot might cost the same as the non-discounted version from another local retailer, at which point even that theoretical consideration goes out the window unless the cheapest local vendor sells both products.
And unless the customer was made clearly aware of the obligation to return the product prior to purchase (rather than tossing it out or returning it via the reseller's normal recycling channel)—and no, mere text on the box probably isn't sufficient, for the same reason that shrinkwrap licenses are dubious—I would argue that the discount likely wouldn't be perceived by the purchaser as consideration in exchange for agreeing to the license in the first place, in which case it isn't a valid contract, and because sale of a product is generally considered to automatically confer the use of all patents as embodied in that product by default (or at least that's my understanding), a preexisting contract between Lexmark and the customer is the only way in which such a license should be binding in the first place.
Besides, given Lexmark's sleazy DMCA abuse just a few years ago, I'd hope that any judge who knows their history would toss about the word "barratry" by the end of Lexmark's opening arguments, but maybe that's just me. :-)
That's a little different, as it isn't really a consumer product that you would purchase off the shelf. Presumably that's software, which typically does require someone to agree to licensing terms. Whether those terms are valid or not is... complex, but given that you're talking about specialized software that is presumably sold directly to specific customers, there's nothing preventing you from requiring them to sign a contract that limits their use with a noncompete clause prior to delivering the goods. Either way, it would be contract law and/or copyright law that would be used for enforcing such terms, rather than patent law.
Check out my sci-fi/humor trilogy at PatriotsBooks.