Lexmark gets first-round ruling in printer suit

A US district court has issued a preliminary ruling in favour of Lexmark International in a case that analysts have said could affect the future availability of low cost replacement toner cartridges for printers.

Chief Judge for the Eastern District of Kentucky, Judge Karl Forester, issued a preliminary injunction that barred Static Control Components (SCC) from making or selling chips used to make replacement cartridges for two of Lexmark's laser printers.

SCC's components are used by thousands of vendors to "remanufacture" toner cartridges by refilling, refurbishing and repackaging them. Such cartridges typically sell for about 30 per cent less than replacement cartridges offered by the major printer vendors.

Lexmark filed suit against SCC in December, charging it with violations of the Copyright Act and the Digital Millennium Copyright Act. It argued that SCC's Smartek chips include Lexmark software that is protected by copyright, and that they allow the unauthorised remanufacturing of toner cartridges for two of its printers.

The software, introduced by Lexmark last year, handles communication between its printers and toner cartridges. Without the software replacement toner cartridges will not work with Lexmark's printers. SCC developed the Smartek chips to allow the continued remanufacturing of Lexmark cartridges.

Judge Forester determined that Lexmark was likely to prevail at trial on the merits of its case and issued the temporary injunction against SCC, Lexmark said.

The injunction means that SCC must refrain from shipping the Smartek chips until the case has been decided at trial.

"We are disappointed in his order, and feel that after he or a jury has heard a full exposition of the facts that we will prevail," SCC said.

SCC was still studying Forester's 53-page order but said it thought the judge had "given us guidance in this matter so that we will be able to offer a replacement Lexmark 520/620 chip that fully complies with the order."

The company did not return a call seeking further explanation.

Lexmark said it was pleased with the ruling.

The company spent hundreds of millions of dollars a year on research and development, Lexmark's general counsel, Vincent Cole, said.

"We believe that our printing solutions and services make us unique and we intend to vigorously protect the intellectual property that helps to set us apart from our competition," Cole said.

The company said it offered users a choice in toner cartridge including a cartridge that could be remanufactured by others without the need of a third-party microchip.

It also offered a cartridge return program that provided customers with an up front discount if they agreed to return their used cartridge directly to Lexmark.

Analysts have said the case could have a wider impact than on Lexmark alone. If Lexmark succeeded at trial, other printer vendors might adopt similar technologies that prevented their printer cartridges from being remanufactured.