In this post I will write about a court case, regarding printer cartridges, which recently reached the U.S. Supreme Court. In a nutshell, the Supreme Court was faced this dispute: should individuals be allowed to refill their used toner cartridges? Despite the fact that this looks like a fairly simple argument, the verdict could have striking implications for numerous industries – these are discussed at the end of this blog post.

Eric Smith’s small company, Impression Products, fills and sells used printer cartridges. They do this in order to recycle and make use of old, empty printer cartridges that would have otherwise probably gone to landfill. This sounds innocent and harmless; Impression Products are not only saving the environment through their work, they’re making filled printer cartridges more affordable for those on low incomes. Unfortunately for Impression Products, the companies that initially supply and sell new printer cartridges to consumers, were not happy with this conduct.

Lexmark, in particular, decided to sue Impression Products. Their attack against Impression Products isn’t personal, it is part of a larger effort to shut down numerous small companies that they lose revenue to. Lexmark claim that it is not legal to re-sell their cartridges after they had already been sold because they have a patent which prevents this from happening. However, Impression Products’ main argument involves ‘patent exhaustion’ – this is when the patent-holder (i.e. Lexmark) of a good (i.e. printer cartridges) makes all of their money from the first sale of the good. After this, the buyers of the good are free to do whatever they want with the good (i.e. give them to Impression Products for re-sale). The point at which ‘patent exhaustion’ comes into effect, if it ever does, after a consumer buys a good has been long disputed – this is why the Lexmark vs Impression Products case is so controversial.

Recently, on Tuesday 21st March 2017, the U.S. Supreme Court had oral arguments over the Lexmark case (the link to the full transcript is at the end of the post). An actual Supreme Court ruling is likely months away from occurring, but at least this gives us an idea of which direction the judges are currently leaning. This is important because the eventual ruling of the case will affect all types of consumers. To boil it down, the question being asked is: how much control do companies have over the products they sell? Currently, the idea of ‘patent exhaustion’ is very real; companies have limited power over what happens to their sold products as consumers pretty much have the right to do whatever they want with them. For example, despite the fact that your new toothbrush came with a guide that said ‘only use to clean your teeth’, in reality, after you bought the toothbrush you had the freedom to use it in whatever way you wanted. However, since this very idea of ‘patent exhaustion’ is being attacked by Lexmark, if the Supreme Court decide to give more control to patent-holders over the use of their products after sale, the implications for all consumers are huge.

To put this into context, let’s assume that the Supreme Court rule in favour of Lexmark and award them with more rights to control the use of their printer cartridges. This allocation of rights will spread across all industries and patent-holders. It will mean that your freedom to use a good that you have purchased will be diminished considerably. For example, if you choose to buy a new Tesla car, Tesla could sue you for patent infringement if you decide to pursue maintenance and repairs of the vehicle at an independent mechanic. You will be trapped into paying for the expensive maintenance provided by Tesla mechanics. Alternatively, if you buy something as simple as a notepad from WHSmith (a stationary retailer in the UK), you could be sued if you choose to write with a pen that is not from WHSmith. Something as petty as this would become a big issue.

Every aspect of your life would be heavily controlled and restricted depending on the companies and brands that you choose to buy into. This will all be decided by the Supreme Court, and it is the reason that you should care about their ruling.

 

 

This NPR Planet Money Episode inspired this post.

U.S. Supreme Court oral argument transcript.

The featured image was from the Wall Street Journal.

Some more articles which informed this post:

https://www.forbes.com/sites/robbmandelbaum/2017/03/25/businessman-takes-lexmark-to-supreme-court-but-skips-the-argument/

https://www.therecycler.com/posts/tag/impression-products/

https://www.bloomberg.com/view/articles/2017-03-21/a-patent-case-that-affects-everyone

https://consumerist.com/2017/03/23/why-you-should-care-about-the-supreme-court-case-on-toner-cartridges/

36 thoughts on “Printers and the Supreme Court?

  1. Given the current economic trends, I believe Lexmark is shooting itself in the foot. I work in tech support and the market is not that simple. Locking out third party supplies is more likely to drive away a portion of buyers who would insist on using third party supplies regardless of printer brand. Meanwhile, there are even more people who would never buy third party refills. Lexmark needs to focus on making their refills better than any third party; that’s where their market is.

    Liked by 2 people

    1. Thanks for sharing your insight Ed, I completely agree with you. Printers themselves tend to pretty cheap, it’s the printer cartridges that make the most profit. Hence, instead of suing a more competitive company for their use of printer catridges, and potential losing consumers who buy Lexmark printers but also buy second hand catridges, maybe Lexmark should just introduce a more affordable range of catridges? It’s a thought.

      Liked by 1 person

  2. This reminds me of the mediaeval case against usury made by the Church and Thomas Aquinas, who held that usury is wrong because it involves being charged both for the purchase and the use of an item.

    Liked by 1 person

      1. Thanks. It was the reason the Church rejected usury before the Protestant Reformation and also led to banking being stereotypically associated with the Jews. They were excluded from most professions but weren’t forbidden to charge interest on loans, so they tended to go into banking. Islam also forbids usury. In fact, so did Judaism but that had changed by the Christian era.

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  3. A very important case! Very well explained and analysed too – well done! I think its important that we maintain our rights to make our own choices and not be controlled by large, powerful corporations.

    Liked by 1 person

    1. Thanks for your kind comments. I agree with the fact that we can’t let too much power slip into the hands of large firms – part of the strategy to prevent this from happening would be to raise awareness of the issue, which was my intention with this post.

      Liked by 1 person

  4. Apple is doing the same thing… they need to stop thinking about small profit loss and start thinking about Saving the earth. Logistically speaking one company cannot handle all recycling. Wether it be for resale or rebirth (turning it into something new). So essentially they are choosing to shut down the small recycling businesses helping with cleanup and restoration in order to insure maximum production (considering phones or in this case printing cartridges can’t be repaired) which in turn puts more and more left over trash on the planet. It’s really a terrible snowball effect. Hopefully this will be stopped! Great article btw 😀

    Liked by 1 person

    1. Thanks for your comments! I totally agree with you! When will companies stop being so selfish and start working together?!…Although this contradicts the latest post I’ve uploaded (which is actually a re-blog) that argues division is a good thing.

      The truth is, there are so many conflicts between different policies – by this I mean that not all of the desirable objectives can be achieved. If companies start working together to reduce pollution, which means that they potentially lose revenue as well, they could become less innovative and creative as they have less money to invest.

      I know that in this article I’ve argued that companies should stop thinking about themselves, but upon self-reflection​ I’ve actually realised that maybe they’re better off remaining selfish! At least this way they’ll be able to invest in developing more sustainable and renewable technologies which could be more beneficial in the long run….I’m still not entirely sure what my position is on the issue though, there are just too many factors to consider!

      Liked by 1 person

      1. You’re very welcome! I subscribed 😁Although I see what you mean by division in business I believe that sacrifice must be made for the good of man. They need to sacrifice profit and or creative influence in order to help reduce our footprint. These company’s have literally gotten away with holding hundreds of billions of dollars in off shore accounts to avoid taxes (apple is at over 240 billion by themselves) yet they complain about mom and pop recycling shops (i’m referring to them as that because they’re minuscule compared to the scale of Apple or Lexmark) taking away what, maybe 100k from them per year? It’s gotten to the point where they’re impeding on what should be basic fundamentals of product recycling in order to completely monopolize. Of course changing one thing will always effect another but in the view of saving the planet I think it’s just a cost of doing business so to speak!

        Liked by 1 person

      2. Your views are compelling! However, I’m still not completely convinced… It’s true that companies can make sacrifices in order to recycle in the conventional methods that we have today. But, if we let them be competitive and profit-seeking it’s inevitable that they’ll need to develop cleaner technologies that are less polluting and harmful to the environment.

        If we restrict their ability to do this, then will we ever progress with our methods of recycling? Government regulation and ‘team-work’ can discourage innovation. I’m certain about the inevitability of firms reducing their pollution – this will be for their own interests not only because consumers will demand it, but the resources on Earth are finite​ so in order to expand production and possibly become an international monopoly, they’ll need to find a sustainable way to do so.

        With regards to the off-shore accounts kept to reduce taxation, maybe it’s a good thing for society in the long run. If we use Apple as an example, they’ll be able to invest more money in their product development which means that, hopefully, iPhones/iMacs/iPads etc. of the future will be more environmentally friendly. This is just an idea, I have 0 evidence to support it as I have no idea what companies do with money that they keep off-shore.

        Liked by 1 person

      3. Thank you! As are yours! I think we will just have to agree to disagree respectively on this one! Thank you very much for the discussion, It was great to hear such a different stance on an issue 🙂

        Liked by 1 person

  5. Is this case about patent exhaustion, or revenues derived from the primary purpose of another companies product being extended via additional utility value (refilling cartridges you don’t produce or buy from their patent holder) ?

    Lexmark’s only beef here is the fact additional revenues are coming from their product without their sharing in these revenues?

    Liked by 1 person

    1. The underlying message of the post is that we can’t allow large firms and companies to heavily control our lives – the case of Lexmark vs Impression Products is illustrating how this could, under the radar, become a reality.

      I’m sorry but I don’t fully understand your question so if you could rephrase it I could answer it in more depth.

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    1. I think they brought it about to stop other companies from profiting off of the resale of their products. They may or may not be fully aware of the greater consequences of their actions, but regardless, even if they win the case not only will they have more control over our lives, other large companies like them will gain more control too. We need to be wary and cautious of the possibility of this situation as it has the potential to have a huge impact on our day-to-day lives -the full potential will probably not be met anytime soon, but a win for Lexmark could get the ball rolling.

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      1. True, if everything aligns precisely as you’ve described. Corporations don’t want the liability of this level of control you’ve described, they simply seek access to your cash flow !

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