Supreme Court Refuses Lexmark Case

The Supreme Court has denied a petition for a writ of certiorari requested by Lemark International against Static Control Components (SCC) to have the court review alleged violations of the Digital Millennium Copyright Act (DMCA).

The case is centered on Lexmark's control of aftermarket supplies for its products and Static Control's desire to provide customer with low-price Lexmark compatible chips. Lexmark adheres to the notion that the practice violates its intellectual property rights and customer agreements for cartridge return.

"I could not be any happier that justice is being served," said Ed Swartz, CEO of Static Control. "For nearly 900 days we have fought tooth and nail with this multibillion dollar company. We vowed at the outset that we would not back down or waiver, and we will see this battle to its very end."

Lexmark filed suit against SCC on December 30, 2002, alleging that SCC's Smartek 520/620 chips violated the Digital Millennium Copyright Act of 1998. In the case history, Lexmark has suffered several legal setbacks.

In October 2004, the 6th US Circuit Court of Appeals in Cinninnati, Ohio overturned vacated a preliminary injunction issued by Chief Judge Karl Forester of the U.S. District Court for the Eastern District of Kentucky that forbade the sale of Smartek replacement chips for Lexmark cartridges.

Forester denied a motion for a preliminary injunction at a later date in January 2005. In another setback, an appeal to the full body of the 6th Circuit to rehear the case was denied in February 2005.

"This deals only with the issue of an injunction. The case itself continues at the District Court level. More broadly, here are the facts about this issue. Lexmark provides laser cartridge customers with high quality products at competitive prices. We offer a regular laser cartridge and we also offer a discounted laser cartridge under our Return program in exchange for a customer agreeing to return the toner cartridge only to us for remanufacturing or recycling," Julane Hamon, a spokesperson for Lexmark International told BetaNews.

"This case is about improper methods used by competitors to interfere with Lexmark's customer agreements for the Return cartridges in violation of Lexmark intellectual property rights and in order to get an unfair competitive advantage. We will continue to ask the courts to enforce existing laws governing contracts and intellectual property so that our laser cartridge customers can get the benefit of full and fair competition."

To prevent this practice, Lexmark added code to its printers and toner cartridges that would only accept genuine Lexmark cartridges. SCC, an aftermarket cartridge maker circumvented the control by selling off-brand chips directly to customers.