Going back quite a few years ago now, Lexmark introduced a toner cartridge collection program they called “Prebate.” Prebate consisted of Lexmark placing a statement on the box that the end-user agreed (simply by purchasing the cartridges) to only use the cartridge one time and then return the cartridge directly to Lexmark. If they instead gave the cartridge to anyone else, such as a remanufacturer, they would be in violation of the “contract” they agreed to when purchasing the cartridge.
This controversial and competition-stifling practice by Lexmark has been in the court system all way back to 2002. Both sides have had some victories and some setbacks, but it appears that Lexmark may finally lose this case at the Supreme Court. If Lexmark prevails, it will mean significant changes for all remanufacturers in many industries – not just the print cartridge industry.
It is expected that the case of Lexmark v. Impression Products will be heard by the Supreme Court sometime in 2017, and according to Tricia Judge of the International ITC (www.i-itc.org), their agreement to hear the case “is a good sign that the highest court of the land will strike down Lexmark’s efforts to control cartridges after their (sic) sold, and to overturn the precedents that Lexmark has based its activities upon.”
According to Tricia Judge:
The U.S. Supreme Court has routinely been overturning patent holders’ positions supported by the federal circuit. It overturned existing copyrights in items first sold overseas in the 2013 Kirtsaeng decision. In 2008, the ruling in Quanta v. LG held that the first sale exhausts all domestic patent holders’ rights, potentially overturning several precedents relied on by Lexmark, such as the single-use case of Mallinckrodt, in question.The Int’ ITC has filed five amicus briefs in support of the position taken by cartridge remanufacturers in support of free trade in imaging supplies. The Int’l ITC wants decision makers at all levels of government to know about the importance of our industry. These briefs convince judges of the importance of a fair and open marketplace for imaging supplies.