Lexmark Australia pleased with US court ruling

Lexmark Australia officials are delighted with a court injunction in the US instructing Static Control Components (SCC) to cease manufacturing the Smartek chip that allows unauthorised access to Lexmark’s protected software systems.

Managing Director of Lexmark Australia and New Zealand, Henrik Stensfeldt, said that if Lexmark prevailed in the case, it would mean it had won the right to protect its intellectual property.

In December 2002, Lexmark filed a law suit in the USA to prevent SCC from manufacturing the Smartek chip, which performs the same role as Lexmark’s chip in warning users when printer toner levels are low.

On February 27 the court ordered SCC to cease making, selling or otherwise trafficking microchips used in the remanufacturing of laser toner cartridges developed for the Lexmark T520/522 and T620/622 laser printers.

The court said that although public policy generally favoured competition, the general principle only favoured legitimate competition.

“Public policy certainly does not support copyright infringement and violations,” Judge Karl Forester said in passing down his judgement.

The production of the chip is in violation of the Digital Millenium Copyright Act in the USA. If it is deemed necessary, Lexmark will pursue a similar path of action in Australia, Stensfeldt said.

“Lexmark is committed to the protection of its intellectual property rights in trademarks, designs and patents, and to its Prebate licensing programs,” he said.

“It will continue to take appropriate legal action where required to protect its intellectual property rights.”

In 2001 in Australia, Lexmark settled a Federal Court legal action it had brought against Boomerang TCR Pty Ltd and Boomerang Imaging supplies Pty Ltd over the use of Lexmark’s trade marks on cartridges that Boomerang had remanufactured.

“Lexmark was concerned that consumers might be confused by Boomerang’s use of the Lexmark trade marks on the box and the cartridge and thus believe the Boomerang remanufactured cartridges came from Lexmark,” Stensfeldt.

Lexmark’s Prebate cartridges are sold subject to a single use license restriction, requiring purchasers to return the empty Prebate cartridges to Lexmark.

In addressing the problem of remanufactured print cartridges, Lexmark’s concerns lay with print quality. Lexmark said its inks were designed specifically for its printers.

“Lexmark spends hundreds of millions of dollars each year developing the technologies that make our printing solutions unique and compelling,” Stensfeldt said.

The lawsuit is about establishing the boundaries of ‘legitimate competition’ where copyright infringement and violations are taken into account.

“It is not Lexmark’s intention to suppress competition,” he said.

Laser and inkjet supplies accounted for 54 per cent of Lexmark’s $US4.36 billion in sales in 2002.