Just because you made it, you don’t control its destiny forever. That’s not your tweenager talking; that’s the U.S. Supreme Court.
In Impression Products v. Lexmark International, the justices yesterday overturned a lower court’s decision that had supported a manufacturer in its efforts to prevent third parties from refilling its printer cartridges with their own ink.
“The case involved a legal dispute between printer and toner cartridge company, Lexmark, and a small West Virginia-based reseller, Impression, which would acquire used Lexmark cartridges, disable chips inside them that prevented unauthorized refills and then resold them to consumers at a lower price,” explains Ali Breland for The Hill.
“A strong 10-2 majority of judges on the U.S, Court of Appeals for the Federal Circuit, which hears all patent appeals, took Lexmark's side and found that the patent-related restrictions were justified,” reportsArs Technica’s Joe Mullin.
“Under the doctrine of ‘patent exhaustion,’” Chief Justice John G. Roberts Jr., wrote in the decision yesterday, “once a patent holder sells an item, it can no longer control the item through the patent laws,” Adam Liptak and Vindu Goel report for the New York Times. “The purchaser and all subsequent owners are free to use or resell the product just like any other item of personal property, without fear of an infringement lawsuit,” Roberts wrote.
That’s good news for retailers, remanufacturers and consumers — as well as for some — but certainly not all — manufacturers.
“Today's ruling is a win for many tech companies, with companies like Vizio, Dell, Intel, LG Electronics, HTC, and Western Digital all taking the side of Impression Products. Public Knowledge also filed a brief in the petitioner's favor,” writes Ars Technica’s Mullin.
“The companies on Lexmark's side, no surprise, were heavy licensors of patents, including tech giants like Qualcomm, IBM, Nokia, and Dolby. Biotechnology and pharmaceutical groups also supported Lexmark,” Mullin continues.
“Fans of Cheap Drugs and Printer Ink Just Won Big in the Supreme Court,” reads the hed on Adam Clark Estes’ piece in Gizmodo. “PhRMA wanted the court to protect U.S. patents abroad because that would help them prevent Americans from buying their drugs for much cheaper prices in countries like Canada and Mexico and then bringing them back to the States,” he writes.
The decision comes after a long battle by Lexmark to keep those refill prices high.
“Lexmark has spent nearly 20 years fighting the war on carbon, trying to stop you from refilling your laser printer cartridges,” points out Cory Doctorow for Boing Boing. “In 2003, they attempted to use the DMCA and DRM to argue that it was an act of piracy (the courts didn't buy it) and then in 2015, they went all the way to the Supreme Court with the idea that you were violating their patent license terms if you treated the cartridges you purchased as though you owned them.”
“Using the example of an auto-repair shop, Roberts also warned that allowing companies to enforce patents in the secondary market would lead to uncertainty and expense,” reports Jeff John Roberts for Fortune.
“The business works because the shop can rest assured that, so long as those bringing in the cars own them, the shop is free to repair and resell those vehicles. That smooth flow of commerce would sputter if companies that make the thousands of parts that go into a vehicle could keep their patent rights after the first sale,” the chief justice wrote.
Some news reports say the decision was unanimous; others have it at 7-1. The discrepancy is due to a partial dissent by Justice Ruth Bader Ginsburg. She “concurred with Roberts’ conclusions regarding patent exhaustion for domestic sales of the cartridges. But she would have held that Lexmark’s patent is not exhausted for foreign sales,” as Debra Cassens Weiss reports for the ABA Journal. Neil M. Gorsuch, who was appointed to the court early last month, didn’t participate in the case.
The ruling does not in any way spell an end to companies controlling the use of their intellectual property.
“Of course, patent law isn’t the only law in play. Companies use copyright law and DRM to control your purchases after you make them all the time, from digitally distributed books, movies, and music to much more tangible goods, like your car,” writes Katie Cox for Consumerist. “And, as the Supreme Court points out several times, contract law — terms and conditions you agree to — is still enforceable, apart from any patent exhaustion restrictions.”