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September 2, 2005
The Latest IP Crime: "Box-Wrap" Patent Infringement
What's that, you ask? Evidently, it's when you ignore the terms written on the side of Lexmark printer cartridge box, refilling the cartridge with ink even when the company has designated it "single use only." According to the Ninth Circuit ruling [PDF] this week in ACRA v. Lexmark, opening the package means you agree to Lexmark's wishes. And if you break that agreement, you could face claims under contract and patent law.
As Fred von Lohmann explains it, it's sort of like when you buy those fancy Gillette Sensor razors, then purchase cheap replacement razor heads -- except that a court has ruled that if the package says "single use," then by opening it you've agreed you can't have any cheap replacements (but you can buy another Gillette "single use" razor). And that means the company that makes the replacement heads is out of luck, too.
[The strategy here is] a variant on the "shrinkwrap license" that used to appear plastered on software. Lexmark is bringing this practice to the world of patented goods. If you step outside the bounds of the "contract" (by giving your spent cartridge to a remanufacturer), you're suddenly a patent infringer. More importantly, Lexmark can sue cartridge remanufacturers for "inducing" patent infringement by making and selling refills.
Yes, Lexmark is the company that already tried and failed
to control the printer cartridge after-market using the Digital Millennium Copyright Act (DMCA). Contract and patent law are clearly proving more amenable. The question is, how will the ruling impact the way companies do business in the future? Asks Fred:
Will patent owners exploit this decision as an opportunity to impose over-reaching restrictions on formerly permitted post-sale uses, repairs, modifications, and resale? Will consumers soon confront "single use only, not for resale" notices on more and more products? Will innovators stumble over labels announcing "modifications prohibited"?
Obviously, we can't know yet. But the danger is there.
Via trackbacks to my earlier post on the decision in the case formerly known as Blizzard v. BnetD, here are three more posts offering reactions to the Lexmark ruling:
- Michael Madison: EULA Developments: "In the contracts arena, consumer advocates won the UCITA battle but are losing the ProCD war. (And they're losing it on the authority of the patent law experts at the Federal Circuit!) What remains of a meaningful 'assent' requirement is slowly, but surely, disappearing altogether."
- Mark McKenna: Blizzard and Arizona Cartridge: "I'm not sure I agree that, as a general rule, it would be okay to contract away all the protection of copyright law as long as consumers clearly understood that."
- Lauren Gelman: The Problem of Online Contracts: "But this wouldn't really be an issue except for the fact that companies are purposely making contracts difficult to find and read to bind users to terms they ordinarily would disagree with...What is the appropriate scope of online contracts? Should the fact that we know that users don't read them (or can't understand them) inform the scope of what we allow the contracts to bind?"
Update (Sept. 5): Dennis Crouch weighs in
1. For me, the interesting part of this opinion is that restrictions on alienation (resale/repair) of consumer goods are generally not enforceable unless the good in question is patented.
2. In the wake of this and other cases, pundits are predicting that we will be seeing more "shrink-wrap" licenses restricting repair and modification attached to products that might need repair or modification.
3. If you plan to take such an action, be sure that your product is patented. (Query will a design patent be sufficient?)
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