Lexmark Wins Patent Ink Cartridge Case

The Ninth Circuit District Court ruled in favor of Lexmark in the case, stating that the ACRA had not proved its case against the manufacturer. In doing so, the court also ruled that a disclaimer written on the outide of a consumer product constitutes a contract between the manufacturer and the consumer on the valid uses of that product. In the case of "Prebate" cartridges, the "single use only" label on the box means cartridge remanufacturers cannot refill the Lexmark products.



Lexmark, one of the largest makers of laser printers, is a believer in the "give away the razors, but charge them for the blades" tactic, counting on the fact that consumers routinely underestimate "life cyle costs" for products like printers. In other words, if you low-ball your customers on the price for the printer, you can gouge them later for ink.

Until now, those kinds of business practices have been held in check by secondary markets that restrain a manufacturer's ability to overcharge for "consumables." That's where cartridge remanufacturers come in -- they refill Lexmark cartridges and sell them for less than new cartridges sold by Lexmark.

Now Lexmark (which already unsuccessfully tried to use the DMCA to wipe out the refills market) has turned to patent law to prop up its effort to keep its customers in bondage. According to Lexmark, the "single use only" label on the boxes of their "Prebate" printer cartridges creates an enforceable contract between Lexmark and consumers. By opening the box, you're agreed to the contract.

Sound familiar? It's a variant on the "shrinkwrap license" that used to appear plastered on software. Lexmark is bringing this practice to the world of patented goods. If you step outside the bounds of the "contract" (by giving your spent cartridge to a remanufacturer), you're suddenly a patent infringer. More importantly, Lexmark can sue cartridge remanufacturers for "inducing" patent infringement by making and selling refills.

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