‘Force Against Something’ alerts Geeklawyer that Lexmark are at it again, but with more success this time around. You may recall they sued Static Control Corporation unsuccessfully (pdf), using the DMCA, for providing an alternative cartridge market. Lexmark has substantial motive in crushing competition. Inkjet printers are sold on the ‘razor blade’ method of commerce: give the razor away free and charge for the blades. Or as here; charge very little for the printer but lots for the refills. By some reckoning inkjet ink is more expensive weight for weight than cocaine. Mind you, if you want a lawyers job with some City firms printing your job application with coke would get you to the top of the recruiters pile, but that’s gossip for another day.
The Ninth Circuit ruling is in favour of Lexmark and their one-shot Cartridge ‘no refills’ condition. As ever, Geeklawyer doesn’t want to spoil a good rant by reading the ruling too deeply, but with that superficiality caveat it seems to him that it differs somewhat from the previous ruling by applying only to cartridges not printers. One is still able to refill a non Lexmark cartridge and use that instead. The case also hinges on the existence of a patent on the cartridges and an end user agreement.
The practical significance seems therefore less than apocalyptic. But it is annoying in one regard: it adds to the panoply of licences/contracts end users must potentially consent to. We already have copyright licences and trademark licences foisted on punters, now there is yet another means for corporations to coerce unwilling consumers into agreements that are not in their interests.
The basis of the decision appears to be:
The court rather surprisingly considered privity issues to have been met on rather tenuous and circular grounds that because there was a contract there was privity. There appears to have been no argument as to private use of a patent.
Certainly from reading the judgement there is nothing to suggest that the patent was pivotal. Most of the judgement revolved around contractual issues alone. This raises the concern that the decision may increase the trend in post sale contracts and the usual anti-competitive knock on effect.
The character of the judgement is entirely American: foisting a contract on an economically challenged party, the consumer, based on notional and largely illusory consent and consideration.
In the UK I feel the case would be decided very differently: I particularly dislike the idea that a discount can be treated as contractual consideration. I would regard this as properly being a positive and direct payment of a price, not a benefit one’s accountant claims exists: it is just too easy for companies to invent such a benefit to justify a contract.
The status of EULA’s remains uncertain here and the American approach of saying that because one sees terms and has the opportunity of rejecting them then there is a contract is a poor approach mainly because of the lack of real choice for consumers. The contract of sale is made with the retailer not Lexmark and retailers generally don’t choose to act as their agent. Nor does the buyer have any intent to enter into a contractual relationship with them, just the retailer. There are numerous other such arguments but I’ll make them at a later time elsewhere on the site.
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