Court rules against Lexmark in printer case

IDG News Service - Lexmark International Inc. has suffered a setback in its attempt to use the Digital Millennium Copyright Act (DMCA) to prevent other companies from making low-cost, refurbished toner cartridges for its printers.
The U.S. Court of Appeals for the Sixth Circuit has rejected Lexmark's request that it reconsider an earlier decision favoring Static Control Components Inc. (SCC), a maker of components used by third parties to make refurbished cartridges. Sanford, N.C.-based SCC is Lexmark's opponent in the case.
The earlier decision allowed SCC to continue selling its chips for Lexmark laser printers at least until the case goes to trial late this year. Lexmark had asked the appeals court for a hearing to reconsider that decision, but the appeals court turned down its request on Feb. 15, SCC announced yesterday.
The case has been closely watched in the industry, where printer manufacturers make much of their profits through sales of their own cartridges. Refurbished cartridges typically sell for about 30% less than those from the major printer vendors.
Lexmark filed suit against SCC in December 2002, accusing it of violating copyright law as well as the DMCA. It alleged that SCC's Smartek chips include Lexmark software that is protected by copyright. The software handles communication between Lexmark printers and toner cartridges; without it, refurbished toner cartridges won't work with Lexmark's printers.
A District cCourt granted Lexmark a preliminary injunction in February 2003, preventing SCC from selling the chips until the case could be resolved at trial. But that ruling was overturned eight months later by the appeals court, which said, in part, that copyright law shouldn't be used to inhibit interoperability between one vendor's products and those of its rivals. The appeals court upheld its decision last week.
Printer makers strongly encourage their customers to buy cartridges directly from them, but Lexmark went a step further by using technology to lock out products made by third parties. The move attracted critics, such as the Electronic Frontier Foundation, which accused Lexmark of abusing the intent of the DMCA at the expense of consumers. The law was intended primarily to protect digital content such as music and films, those critics argued.
A ruling from the U.S. Copyright Office in October 2003 appeared to bolster SCC's case. Without referring directly to Lexmark, the Copyright Office said the DMCA doesn't block software developers from using reverse engineering to access digitally protected copyright material if they do so to achieve interoperability with an independently created computer program.
SCC was quick to portray last week's appeals court