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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

#111

Post by exelius »

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…

I think that this distinction is largely becoming irrelevant in the cloud era. Most software is sold / licensed on a term basis these days, and honestly the industry is healthier as a result. App stores are really the only remaining vestige of "buy once, use forever" -- and I'd guess that the EU isn't interested in going after it thanks to the small dollar amount and huge number of companies who benefit.

Software was never truly a "product" in the same way that physical goods are -- it was always a service thanks to the maintenance and continued investment required. It may have been better for the consumer in the short term to "buy" software, but a subscription model allows for more predictable cash flows to the developer of the software (which keeps software vendors in business -- and their software supported).

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

#112

Post by jandrese »

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…

IIRC most Ink Jet printers are sold with half filled "starter" cartridges. They have to, or people would just buy new printers each time because they're cheaper than a replacement cartridge.

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

#113

Post by mayoff »

owenversteeg wrote: post #49
roywiggins wrote: post #13

When you can cite Lord Coke in your opinion, I guess it's practically mandatory to do so. > As Lord Coke put it in the 17th century, if an owner restricts the resale or use of an item after selling it, that restriction “is voide, because . . . it is against Trade and Traffique, and bargaining and contracting betweene man and man.” 1 E. Coke, Institutes of the Laws of England §360, p. 223 (1628)

Semi-off-topic: I've noticed that Coke's writings are a bit more similar to "modern English" than other things I've read written in the 1600s. This surprised me, because he was a judge and probably wrote in formal language for the time. Formal language, to me, seems perpetually set back to the way people talked about 60-100 years previously. Thus you'd expect Coke to sound like he's writing in the 1500s, but instead…

I don't know anything about Coke, but my impression of SCOTUS opinions is that they often use language I wouldn't consider formal. Consider the first sentence of section II-A of this decision:

> First up are the Return Program cartridges that Lexmark sold in the United States.

I often find the decision to be more readable (if much longer) than the syllabus.

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

#114

Post by PeterisP »

gech wrote: post #95
ghaff wrote: post #70

Earlier quoted context omitted.

The alternative for most people is to buy a cheap laser printer. You don't need color for most things and the operational costs are far lower. To answer your question, though, the profits for fairly low margin printing hardware business need to come from somewhere. Sure, you can cut the margins on ink. Now you're paying $500 for the printer whether you use it heavily or just now and then.

Why can't they just accept lower margins

Why should they? After all, margins is the only reason why they're producing printers at all; if the margins are bad then it would be better for them to stop producing these products as they can get more profit manufacturing something else.

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

#115

Post by dsp1234 »

gist wrote: post #83
Glyptodon wrote: post #51

Earlier quoted context omitted.

All they really need to do is make cartridges rentals instead of sales, no?

Perhaps also by a clever rebate scheme. Product price is $180. Rebate is $40. Applying for and getting the rebate necessitates signing of a 'contract' which prohibits certain action. [1] [1] May not hold up in advanced legal cases but enough of a leg to stand on to get the ball rolling.

FTD:

"The other is to buy a cartridge at roughly 20-percent off through Lexmark’s “Return Program.” A customer who buys through the Return Program still owns the cartridge but, in exchange for the lower price, signs a contract agreeing to use it only once and to refrain from transferring the empty cartridge to anyone but Lexmark."

Note that because the contract is with the purchaser, and not with the refiller/reseller, Lexmark can only use the original purchaser. Which is why they turned to patent law in order to try to and stop the refiller/reseller.

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

#116

Post by jandrese »

owenversteeg wrote: post #58
ocdtrekkie wrote: post #38

Earlier quoted context omitted.

Perhaps, but how often do you really need to buy a printer? And they're so cheap a mild price increase wouldn't harm much. The Canon MG2520 (I think there's a newer version now) is a printer/scanner/copier combo that often retails for $20. (And comes with ink.) Price of ink would fall in exchange, since they have to compete with the off-brand folks.

Hmm, cheapest I found the MG2520 was $30 shipped including ink. Not bad, and still pretty low. I'd expect the minimum for a wireless printer-scanner with ink, shipped, to be $40 or so. $9 shipping, $3 wireless chip, $5 ink, $9 plastic/frame, $5 motors/print heads, that's already $31. (I could be off, of course.) I wonder how much, if anything, Canon loses on the printer, and how many people buy replacement ink.

The ink doesn't cost them $5. It's almost entirely markup.

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

#117

Post by asr »

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, the contract is (presumably) enforceable.

The reason it matters is that Lexmark has to sue its customers --the ones who signed the contract--in order to enforce a contract right. In the case that the Supreme Court just decided, Lexmark sued its competitors, the cartridge remanufacturers.

For Lexmark to sue its customers would be administratively difficult and is also generally not very good PR. So my guess would be Lexmark will never file that lawsuit.

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

#118

Post by dsr_ »

awinter-py wrote: post #67
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…

Are european secondhand copies resellable in the US?

Probably. In general, the first sale doctrine applies to copyrighted works that exist on a physical medium. https://en.wikipedia.org/wiki/First-sale_doctrine

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

#119

Post by moduspwnens14 »

ghaff wrote: post #70
SeanDav wrote: post #50

I can't believe that the printer market has not been disrupted by someone offering a decent printer without ridiculous ongoing printer cartridge costs. I just bought a £99 printer that will cost more than £99 in printer cartridge costs after just a few months of casual use and I did not spot any alternatives.

The alternative for most people is to buy a cheap laser printer. You don't need color for most things and the operational costs are far lower. To answer your question, though, the profits for fairly low margin printing hardware business need to come from somewhere. Sure, you can cut the margins on ink. Now you're paying $500 for the printer whether you use it heavily or just now and then.

I got this color laser printer [1] at $179.99 in 2013 and it's still going strong. I got it specifically as a long term investment because I don't print very often and was tired of having dried-out ink every few months when I did go to print.

I'm curious how close to that price point inkjets will get if they have to turn a profit without proceeds from ink cartridge sales. We might be moving toward a point where it makes less and less sense to buy an inkjet at all.

[1] http://a.co/2kJojV2

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

#120

Post by DannyBee »

_delirium wrote: post #42
DannyBee wrote: post #25

Earlier quoted context omitted.

Yes they both stem from common law disfavouring restraints on alienation.

Something I've searched for but not found a layperson introduction to: any idea why that doesn't apply to real estate? Deed restrictions that purport to put conditions on how property can be resold have repeatedly been upheld, except for a really narrow, somewhat recent carve-out for no-selling-to-black-people deed restrictions, which were held unenforceable, but specifically because they were racially discriminatory…

Interestingly, this all started in real estate, but it's changed over the years.

Real estate is almost exclusively state law, so it moves faster and is different among states :)

Federal law moves slower.

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