A business arguments about the printer toner cartridges may not sound really glamorous, and the word “patent ” exhaustion” is probably the cause of your eyes glaze over. However, this otherwise boring topics are at the heart of a Supreme Court case, that the answer of a question with far-reaching consequences for all consumers: Can a company that sold you something to use his patent on the product to determine how you choose to use after you’ve purchased it?
The case in question is the Impression Products, Inc v Lexmark International, Inc., came before the nation’s highest court on Tuesday.
As with many SCOTUS disputes, Lexmark is a devil-in-the-details case that would have far-reaching consequences for basically anyone who ever buys something—so from all of us.
Here is the background: Lexmark printers. Printers toner is required for printing, and Lexmark also happens to sell toner.
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Then there is an Impression of the Products of a third company makes and refills toner cartridges for use in printers, including Lexmark.
Lexmark, however, do not; if you are using third-party toner cartridges, that is money that Lexmark did not make. So for the sued, which brings us to the legal chain that eventually reach the Supreme Court.
Printer makers are notoriously picky about the cartridges, because that is where all the money is. Companies such as Canon, HP and Lexmark are not really making their millions from the $75 you spend on a printer; the real money comes over the long term when you have to keep spending $30 on a name-brand ink cartridges, one or two times per year that follows.
In an attempt to prevent others from getting a piece of that sweet toner sales, Lexmark turned to his patents: The company began with the sale of printer cartridges with a notice on the package, and prohibits the re-use or transfer to third parties. Then, if a third-party—like Impression—came around the resale or recycling of the cartridges to Lexmark could accuse them of patent infringement.
So far the courts have sided with Lexmark, the verdict that the Impression was of the use of Lexmark’s patented technology in an unauthorized way. The Supreme Court is an Impression of the last avenue of appeal.
What is the Legal Argument?
As inventors of things (not only the idea of things, but the real stuff), they have patents on them, so that for a time that no one else can make the same things in the same way.
So far So good. As a concept, at least, the patent is fairly simple—even if the details get annoying complex.
But the patents are limits, and legally, the restrictions, in principle, be in possession to take when you sell something you made. That is a legal concept known as ” exhaustion.” When you, the consumer, have bought a thing, it is yours and you own and you can do what you want, even if someone else has a patent on.
So: the toothbrush has a special tooth cleaning patent? You can still use it to scrub tile grout if you want, because the patent-holder has done in their ability to regulate use, when the toothbrush is yours. They can say, “oh, please, please do not use it on everything but teeth,” but you are free to ignore them as you see fit.
Maybe you get the feeling this a little more complicated in the digital age, but where you don’t “own” things like movies, music, or even the software on your phone; rather, it is licensed, which means that companies can go to all sorts of lengths to keep determine how, when and where you have the things that you bought, long after you have purchased it.
Where a form of digital rights management (DRM) was once only standard for video games and movies, you can find it on everything from coffee to cars, and a lot of in-between—including printer cartridges.
The question before the Supreme Court, then, is not one of “can the Lexmark patent on?” Because Lexmark can and has. The question is actually: Can patent exhaustion is still a thing, or is the original manufacturer for the last word in what you and others can do with the product?
What Happened in the Court?
A decision of the Supreme court is still likely months away, but the transcript [PDF] of this week’s oral arguments can tell us a lot about the way the judges are leaning.
The lawyers from both sides, Impression, and Lexmark—each pointed to a number of earlier rulings of the patent law for the support of their own perspective on the reason why the law does or does not support patent rights exhaustion.
The problems of both sides is that the most recent case dealing with exhaustion applies to copyright, not patent law. The laying of the consumer, that may seem like a small distinction, but copyright and patent are two very different animals legally.
Justice Anthony Kennedy, for his part, seemed just as surprised as the lawyers of the law apparently still not processed this already.
“There are other exampled of really important rules that have not been passed?” Kennedy asked early in the session. “Why, this is not codified?”
For whatever reason, though, it is not, and the Court is now dealing with 2017 technology and 1952 the law, for which the authors could not have guessed, that the patent law would be used to restrict what a customer can do with a product after it is purchased.
Meanwhile, Chief Justice Roberts, along with Justices Stephen Breyer and Samuel Alito, held to want to probe the question of why patent law was even needed for this kind of things, as SCOTUS blog explains. Each of the three asked what kind of a question, or raised some argument why Lexmark couldn’t just limit the use of the items with a regular contract agreements instead of patents.
Eventually, though, the Courts do not say that gave me a particularly strong position one way or the other. As SCOTUSblog, the analyst: “the judges are well aware of the great consequences here and not see an obvious way to avoid doing something that the real economic impact… on the Contrary, it seems, they are going to have to decide whether or not these types of limitations, or not, remains a product of the 21st century innovation policy.”
And that is, indeed, an important question. Basically, anyone with an interest in technology, copyright, software, DRM, privacy, or any other 21st-century care has been submitted, inform the support of one of the two underlying arguments in this case. This includes interest groups, industry trade groups and businesses spread across everything from Costco Intel. After all, a whole business model, and a lot of the rights of the consumer in the proceedings.
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