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New U.S. Federal Appeals Court Ruling on DMCA and Printer Cartridge Chips
The 6th U.S. Circuit Court of Appeals in Cincinnati has ordered a new hearing in Lexmark International Inc.'s general copyright and Digital Millennium Copyright Act (DMCA) case against replacement ink-cartridge chip maker Static Control Components, Inc. An earlier District Court ruling had given Lexmark a preliminary injunction barring Static from selling its Smartek chip designed to allow replacement cartridges to work with certain Lexmark printers.
The case has received international attention as it is one of the first to test the limits of the federal DMCA enacted in 1998 primarily to combat Internet piracy. Section 1201 of the DMCA makes it generally unlawful to circumvent technology designed to restrict access to a copyrighted work or to sell technology that can do so.
Lexmark alleges that the Smartek chip spoofs Lexmark's technology used in its printer cartridges and unlawfully fools Lexmark printer software into accepting Smartek containing aftermarket replacement cartridges. Under Lexmark's "prebate" business model, certain cartridges are sold at a discount to be used once and returned to Lexmark. Static sells its chips to third-party cartridge re-manufacturers for use in prebate cartridges.
The DMCA provides a number of exemptions to permit certain activities such as interoperability. Static argues its chips are thus exempt and their creation is further protected by fair use rights under copyright law. The Court of Appeals for the 6th Federal Circuit appears to have given fresh life to Static. The Court concluded that Lexmark failed to establish a likelihood of success on any of its claims, overturning the preliminary injunction and sending the matter back for further proceedings.
For a copy of the decision, visit: