Skip the navigation

Antitrust lawsuit filed against Lexmark

By Patrick Thibodeau
March 3, 2003 12:00 PM ET

Computerworld - WASHINGTON -- The North Carolina company that says it's fighting for the survival of low-cost, remanufactured printer cartridges filed an antitrust lawsuit today against Lexmark International Inc., charging it with attempting to monopolize the printer market.
The new lawsuit, filed by Static Control Components Inc. (SCC) in Sanford, N.C., comes after Lexmark filed a lawsuit against Static last December for illegally copying its printer computer technology -- the computer chips that have become an integral part of toner cartridges (see story).
On Friday, the U.S. District Court for the Eastern District of Kentucky issued a preliminary injunction favoring Lexington, Ky.-based Lexmark that bars SCC from making chips used in replacement cartridges for two of its laser printers (see story).
"Naturally, we're disappointed in that order," said William "Skip" London, general counsel for SCC. But London said Judge Karl Forester's ruling also provided guidance on what it could and couldn't do in producing compatible cartridges. "We anticipate that we will be able to come up with a chip in a very short period of time that doesn't go against the judge's ruling," he said.
In its antitrust case filed today in federal court in North Carolina, SCC alleges that Lexmark's anticompetitive practices are squeezing out companies that remanufacture toner cartridge. In its lawsuit, it argues that approximately 35% of Hewlett-Packard Co. toner cartridges are remanufactured, compared with about 14% for Lexmark. Static blames that disparity on Lexmark's anticompetitive practices.
Although Lexmark officials had yet to receive the lawsuit, Roger Rydell, a Lexmark spokesman, defended the company and said it "provides more choice in cartridges for laser printers" than "any of our competitors offer."
Rydell said customers can buy unrestricted cartridges that they can return to Lexmark free of charge for reuse or sell to a third party for reuse. The company also offers an upfront discount, or "prebate," in exchange for returning the cartridge to Lexmark. The company can then remanufacture the cartridge and sell it at a lower price.
But SCC officials have called the prebate program a "sham" and said end users will always buy the lower-priced discounted cartridge that can't be remanufactured.
The case has potentially broad implications. Lexmark's Dec. 30 lawsuit against SCC charges the company with violating the Digital Millennium Copyright Act (DMCA), the controversial 1998 law established to prevent piracy. The law was aimed at music and motion pictures, but critics have said Lexmark's use of it illustrates a broader problem.
Under the DMCA, it's conceivable, for instance, that a hardware maker could prevent interoperabilitywith other systems by citing the law's anticircumvention provisions. By putting software controls on, for instance, auto parts, OEMs could use the law to stop remanufacturing of parts in that industry.

Read more about Gov't Legislation/Regulation in Computerworld's Gov't Legislation/Regulation Topic Center.



Additional Resources
Forrester Consulting - Optimizing Users and Applications in a Mobile World
WHITE PAPER
Solving application issues over the WAN requires careful consideration. Based on their independent research, Forrester Consulting offers recommendations on how to tackle application performance issues, insufficient bandwidth and the inability to quickly restore users in a disaster.

Read now.

Security KnowledgeVault
WHITE PAPER
Security is not an option. This KnowledgeVault Series offers professional advice how to be proactive in the fight against cybercrimes and multi-layered security threats; how to adopt a holistic approach to protecting and managing data; and how to hire a qualified security assessor. Make security your Number 1 priority.

Read now.

Cut Communications Costs Once and for All
WHITE PAPER
New IP-based communications systems are being deployed by small and midsized businesses at a rapid rate. Learn how these organizations are enabling faster responsiveness, creating better customer experiences, speeding office or mobile interactions, and dramatically reducing existing communications costs.

Read now.

Gov't Legislation/Regulation White Papers
Overcome Top 7 Admin Challenges of Active Directory
As Active Directory's role in the enterprise has drastically increased, so has the need to secure the data. Gain insight on creating repeatable,...
Insiders Can Ruin Your Company. Take Action.
Did you know that 80 percent of threats to an organization come from the inside? The threat from insiders is often overlooked in...
Top Solutions and Tools to Prevent Devastating Malware
Custom malware frequently goes undetected. According to Forrester Research, the best way to reduce risk of breach is to deploy file integrity monitoring...
Streamline Compliance and Increase ROI
Streamline, simplify, and automate compliance related activities; especially those that impact multiple business units. This white paper from NetIQ, outlines solutions that will...
X-Ray of the PCI Process-4 Proactive Steps
This white paper from Forrester Research Inc., helps break PCI into understandable components. Security and risk professionals will gain knowledge and insight into...
All Gov't Legislation/Regulation White Papers
Gov't Legislation/Regulation Webcasts
Optimizing Networks for the Cloud
Join guest speaker, Rohit Mehra, IDC Director of Enterprise Communications Infrastructure, to explore current trends, discuss best practices for optimizing Data Center and...
Apps QuickStart Series Part 2: Designing and Deploying SQL Server on VMware vSphere
Download this webcast to learn about the design considerations for virtualizing SQL workloads, performance and scalability information and high-availability options, as well as...
Apps QuickStart Series Part 1: Designing and Deploying Exchange 2010 on VMware vSphere
Download this webcast to learn the virtual hardware design considerations for Exchange 2010, deployment using the building block approach, options for high-availability and...
Customer Spotlight: How IPC The Hospitalist Company Implemented Oracle on VMware
Have you been looking to hear about customer's experiences with the new VMware vCenter Site Recovery Manager product? View this webcast to learn...
Virtualize Business-Critical Applications with Confidence
Virtualizing business-critical applications has become a key focus for organizations as they move along their virtualization journey. With the launch of VMware vSphere®...
All Gov't Legislation/Regulation Webcasts
Newsletter Sign-Up

Receive the latest news test, reviews and trends on your favorite technology topics

Choose a newsletter
  1. View all newsletters | Privacy Policy
IT Jobs