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SCOTUS: Patent Rights Over a Printer Cartridge Are Exhausted When It Is Sold

law.cornell.edu

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Re: SCOTUS: Patent Rights Over a Printer Cartridge Are Exhausted When It Is Sold

#121

Post by asr »

ChuckMcM wrote: post #84

Yay, hopefully this will translate into a non-crazy ink refill situation which will translate into a much reduced price in ink cartridges. My hope is that the following will occur; 1) People who sell re-filled cartridges, and offer to refill your existing cartridges will no longer suffer malicious lawsuits from HP & Lexmark. 2) That will increase the supply and create a price competition between re-fillers. Making it…

If what you are hoping for is a situation where manufacturers will sell printers at a loss and then also sell ink at cost, I don't think that's a long-run equilibrium.

If you are looking for printers where you can get ink at cost in exchange for paying a bit more up front, that's available now: https://epson.com/ecotank-super-tank-printers

Kodak also did this ~10 years ago [1] but I cannot figure out if they still use this business model.

[1] https://outline.com/7ZNnYV

Re: SCOTUS: Patent Rights Over a Printer Cartridge Are Exhausted When It Is Sold

#122

Post by ghaff »

gnicholas wrote: post #105
socalnate1 wrote: post #91

Earlier quoted context omitted.

Isn't this a good thing? I'd rather not companies obfuscate the true cost of the things I buy.

You make a good point that it is good for consumers to be informed. But it is also a good thing for sellers to be able to price discriminate between high-volume and low-volume users, which is made possible by making more profit on the ink than on the printer. If they could not do this then printers would be more expensive than most people would want to pay, even though the cost of production is actually less. So ther…

As I recall, one of the endless antitrust-related suits that IBM was once involved with was a similar sort of price discrimination case involving printer supplies. "Overcharging" for supplies that you alone can supply is a very straightforward way to do usage-based pricing on products that can't easily be sold that way.

Re: SCOTUS: Patent Rights Over a Printer Cartridge Are Exhausted When It Is Sold

#123

Post by Tuna-Fish »

joshuak wrote: post #62
touchofevil wrote: post #48

If you want to learn about a really interesting aspect of the "first sale doctrine" and how it applies to software, you should have a look at "Vernor vs Autodesk" in the USA and compare it to "Oracle vs UsedSoft" in the EU. Basically, in the USA the courts determined that if a company sells you software, but in their terms & conditions claim that they are merely granting you a license, then you can't resell the softw…

That sounds a little better than the ridiculous Autodesk decision, however it sounds trivial to circumvent by simply putting a 'term of license' clause in the EULA. I'd go so far as to say I don't think EULAs should be considered a valid legal instrument.

In the EU, that doesn't work. Specifically because none of the conditions of the EULA apply to the sale unless you were presented it before you paid for the product. If it's possible to purchase the product in such a manner where you are not presented the EULA before you bought it, you can ignore a lot of it's conditions.

Re: SCOTUS: Patent Rights Over a Printer Cartridge Are Exhausted When It Is Sold

#124

Post by bluGill »

mbreese wrote: post #97
gameshot911 wrote: post #65

Can someone clarify one part: >The other option is to buy a cartridge at a discount through Lexmark’s “Return Program.” In exchange for the lower price, customers who buy through the Return Program must sign a contract agreeing to use the cartridge only once and to refrain from transferring the cartridge to anyone but Lexmark. >As a result, even if the restrictions in Lexmark’s contracts with its customers were clear…

Yes, assuming the contract was valid. Lexmark could in that case sue their customers that sent cartridges to a re-manufacturer. The only one with a relationship with Lexmark is their customer, so that's the only entity they could sue. (However, given that this isn't a case involving Lexmark and a customer, the court didn't rule on that contract, just acknowledges the possibility.) "If the patentee negotiates a contra…

Maybe, but the remanufacturer would argue back that they didn't take ownership of the cartridge, they just added toner which never transferred ownership.

Re: SCOTUS: Patent Rights Over a Printer Cartridge Are Exhausted When It Is Sold

#125

Post by bluGill »

LukeShu wrote: post #100
tbirrell wrote: post #87

Earlier quoted context omitted.

No. That's what SCOTUS is saying. Lexmark is trying to enforce a contract over an item that they do not control. Is like if you signed a contract with me that every time you handed someone a glass of water, you would require them to say "thank you" in a non-native language. I have no control (legal or otherwise) over your actions or the glass or the water, therefore the contract is not enforceable. In the case, Lexma…

No. Lexmark can negotiate a contract with its customers (this is unrelated to patent rights). But, if the customer sells the item to a 2nd customer (possibly in violation of the contract), then that 2nd customer is not subject to the contract, as the contract was between Lexmark and the initial customer. SCOTUS is saying that they can't use patents to say you may not sell to anyone else. You can instead use contracts…

It is quite likely that Lexmark sold the cartridge to a reseller (think walmart) who sold it to the consumer. Thus Lexmark may not be able to sue the end users successfully because there was no contract - though they could sue the reseller (walmart in this example).

Of course suing your customers is a PR disaster even if you would win. Suing resellers is a bad idea as they will never carry anything you make again which means you might win one round but you can declare bankruptcy. Even if sue OfficeMax with a promise to not sue Walmart, expect that walmart drop you anyway as they cannot afford that risk.

Re: SCOTUS: Patent Rights Over a Printer Cartridge Are Exhausted When It Is Sold

#126

Post by thaumasiotes »

geofft wrote: post #52

I'm a little surprised that Ginsburg dissented here, and also dissented from Kirtsaeng v. John Wiley : naively, she's "liberal", and (at least in my bubble) being "liberal" is associated with wanting less strong IP protection. But I see also that she wrote the majority opinion in Eldred v. Ashcroft , saying that the 28-year extension to copyright terms was constitutional. What's the right way to understand her legal…

> she's "liberal", and (at least in my bubble) being "liberal" is associated with wanting less strong IP protection

Hollywood is pretty well known for being liberal.

Re: SCOTUS: Patent Rights Over a Printer Cartridge Are Exhausted When It Is Sold

#127

Post by icantdrive55 »

balls187 wrote: post #47
awjr wrote: post #14

In short, the sale of a product does not allow you to control what is done with the product afterwards through patent law. I'm assuming this is almost similar to attempts to use copyright law to stop the sale of products on the grey market. http://www.bipc.com/court-rebuffs-attempt-to-use-copyright-l... I do wonder though, if they changed the underlying software on the cartridges they would get into trouble. I do not…

Interesting that even with importation fees, it was cheaper for Costco to import watches.

On the right day, you can get a high end watch for a lot less than going into a boutique.

I bought a Omage Aquaterra, with the big white dial for $1400 years ago. This watch was going for $3500 in the authorized retail stores.

Swatch took Costco to court, and lost.

There's no factory warranty, but most of these new high end watches will keep perfect time for 10 plus years. Oh yea, Costco does have some watchmaker that supposedly repairs watches. I can repair, so I don't trust anyone anymore.

It's too bad companies continually screw Americans on price, on so many products--the medication cost difference really bothers me.

Re: SCOTUS: Patent Rights Over a Printer Cartridge Are Exhausted When It Is Sold

#128

Post by phkahler »

awinter-py wrote: post #96
phkahler wrote: post #77

Earlier quoted context omitted.

>> I'd go so far as to say I don't think EULAs should be considered a valid legal instrument. Agreed. The EULA is not even mentioned at the point of sale. Most notably, the company that sold the software often has no idea who has entered into such an (alleged) agreement with them. I thought acknowledgement was a critical part of contract law, but somehow clicking a virtual button in private is claimed to qualify.

contract-wise it seems from case law they're on pretty steady ground. Of consideration + capacity + intent, capacity is probably the trickiest when you're not in person with the counterparty. I think the more interesting angle of attack is by calling this a contract of adhesion, i.e. saying that the vendor is using their superior market position to force a long and disadvantageous contract on customers. At the point…

What if I say aloud "No, I do not agree to the terms of this EULA, but I'm going to click this button in order to install the software anyway." How about that? You may say "but clicking the button indicates agreement" to which I say it does not unless I actually agree to the terms of the EULA. The EULA is the only thing defining the meaning of clicking the button...

Lets suppose a techo-archeologist in 2100 finds an old PC and some MS windows install disks. Wow! he says, I've found a major artifact from a hundred years ago in the heyday of the internet! He gets it to power up and loads the disks in. He finds the EULA and takes pictures and uses OCR software to document his findings and then says "Huh, I wonder how anyone would ever read all that or agree to it, I sure don't agree with it, but I've got my research to do." And he clicks "I agree". Did he just enter into a contract? With whom? Suppose Microsoft went under completely in 2075. How does this clicking a button equate to him entering a contract? It seems incredibly absurd to me.

Re: SCOTUS: Patent Rights Over a Printer Cartridge Are Exhausted When It Is Sold

#129

Post by 01572 »

Will companies now save more money on toner?

Is there anyone selling a reverse-engineered, refillable pod for the coffee machines that only accept pre-filled proprietary ones?

Do these coffee machine vendors seek to use patents to protect their sales of coffee?

Edit: I know Keurig and Nespresso are the well-publicised examples, but I was thinking of the others. I assume with reasonable confidence there are others still using non-refillable proprietary pods.

Re: SCOTUS: Patent Rights Over a Printer Cartridge Are Exhausted When It Is Sold

#130

Post by bluGill »

desdiv wrote: post #74
jvandonsel wrote: post #34

Could Lexmark argue that they're not really selling the cartridges to you, but are instead leasing them for an indeterminate period of time?

I don't think consumers will bother with anything that hassle-some: Lexmark: "For $20 you can lease one of our fine cartridges for an indeterminate period of time. Just need your signature on page 2, 5, and 6 of this contract." Canon, Panasonic, HP, Xerox: "You give me $20; I give you cartridge."

The problem is the cartridge is a significant cost. If Lexmark gets the cartridge back and refills it their costs are lower than their competition. There is a reason HP sends a free shipping return label with all their cartridges: it isn't about being green (though that is a nice bonus), it is about recycling.
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