Saturday, June 10, 2017

24.1 - Good News: Supreme Court supports right of third-party repair

Good News: Supreme Court supports right of third-party repair

We start the week with some Good News that requires some explanation.

Lexmark - you've probably heard of them - is a company that makes, among other things, printers and printer cartridges. It makes two kinds of ink cartridges: an expensive, reusable model and a less expensive, single-use one. The only mechanical difference? The cheap cartridge features a chip that disables it once you refill it.

Impression Products is one of several companies that would collect those cartridges, disable the chip, and sell the refilled cartridges for less than Lexmark ones.

In 2013, Lexmark sued Impression for patent infringement. Various courts split on the issues involved, so it got to the Supreme Court.

On May 30, the Supreme Court struck a blow for consumers and independent repair businesses and against corporate domination. By a vote of 7-1, it told Lexmark essentially flat out that its patent rights over a cartridge ended, in legal language were "exhausted," when that cartridge was sold. That is, Lexmark can prevent anyone from making cartridges of the same design, but once it sells one to you, it can't control what you co with it, including having some third party refill it.

Other than the fact that this can reduce the cost of printer ink, which should be a relief to most of us, the real point is that the case is actually about your ownership rights, over your control of something you have purchased.

Writing at, Kyle Wiens said:
Consider this: Countless people hack their Keurig machines to brew "unauthorized" coffee brands. Can Keurig sue them? Could Apple or Samsung stipulate that you can’t resell their products on Craigslist or eBay? Could John Deere claim that a repair tech is infringing upon its patent rights by repairing a broken combine without permission?
The point is, by Lexmark's position, the answer to all those questions is yes. The effect of the decision is to say the answer is no.

That the Court is aware of that effect can be seen in that John Robert, writing for the majority, cited a hypothetical shop that restores and sells used cars as an example of a business that could not run at all if manufacturers could put restrictions on post-sale use of their products like Lexmark tried to put on theirs.

So not only Impression Products but every independent repair business can breathe easier.

This however - all Good News comes with Not Good News, it seems - is not the end. Corporations will likely start doing what John Deere did after losing a copyright law fight: update its EULA (End User License Agreement) to try to accomplish by contact what they can't accomplish by patent law.

And indeed Lexmark also made consumers sign a "post-sale restriction" contract stipulating that only Lexmark could collect, refill, and resell them. But that is a harder row to hoe for the corporations because any suit would have to be against individual customer, one at a time, not the repair business, because the company, Lexmark in this case, has no contract with that business.

On a closely related note, eight states - Illinois, Kansas, Massachusetts, Minnesota, Nebraska, New York, Tennessee, and Wyoming - are considering so-called "right-to-repair" bills this year. Lobbyists have already effectively blocked one - the Nebraska legislature has tabled the proposal there - but I frankly expect that even there it will come up again.

So Goliath is not down - but David still has some stones.

As a final observation on this: Impression Products could gather a used Lexmark cartridge, disable the chip, refill it with ink, and still sell if for less that Lexmark did in the first place. Which is a demonstration of the effect of market control and reason to challenge it.

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