Lexmark lose DMCA-case

Lexmark can no longer use the Digital Millennium Copyright Act (DMCA), enacted by Congress in 1998, to stop its competitors from creating and selling cartridges that interoperate with its printers.

A federal court has ruled that a small North Carolina company, Static Control Components (SCC) can continue selling their Smartek chip that allows any printer cartridge to work with Lexmark printers.  Or to put it another way, Lexmark, the No. 2 maker of printers in the United States, have learned the hard way that you can’t commandeer the Digital Millennium Copyright Act (DMCA) in conjunction with copyright law to create monopolies of manufactured goods for your company.

The decision lifts an injunction imposed by a lower court on the sale of Static Control Components (SCC) chips that allow any printer cartridge to work with Lexmark printers. Now, any company that wishes to compete with Lexmark in after-market cartridge sales can do so by using SCC chips in its products.

Congress originally intended the DMCA to prevent mass copyright infringement on the Internet.  But some companies have been scrutinising the small print and using legal loopholes to gain control over after-market competition. Lexmark, for example, programmed its printers to require a digital “handshake” with cartridges, so that only Lexmark cartridges could be used.  But when SCC started selling chips that allowed other companies to refill used cartridges and make them interoperable with Lexmark printers, Lexmark claimed they were engaging in unlawful reverse engineering and sued under the DMCA.

Under section 1201 of the DMCA, it is generally unlawful to circumvent technology that restricts access to a copyrighted work or sell a device that can do so. But Congress also included exemptions in the DMCA explicitly permitting activities such as interoperability, which permits reverse engineering, “for the purpose of enabling interoperability of an independently created computer program with other programs”. 

Unfortunatley for Lexmark, they were unable to convince the judge that SCC was in breach of section 1202, while SCC were able to convince him that they were not in breach.

The now-normal model of very cheap printers and costly ink cartridges may be coming to an end.

SCC Smartek