Should It Be Legal to Sell Used Print Cartridges?

What if you could get sued for selling your used technology – your old cell phone, your flat-screen TV, or even your empty print cartridges?

As a recent New York Times editorial discussed, that possibility is being considered by the   United States Court of Appeals for the Federal Circuit.

The case is Lexmark International v. Impression Products, Inc. 

Print on Demand

Lexmark, as many printer owners know, makes and sells printers, ink cartridges, toner cartridges, etc.

Lexmark’s toner cartridges include an “encoder wheel” that determines how much toner remains and optimizes the print settings in response. This chip is also supposed to disable the cartridge if it’s refilled by anyone other than Lexmark.

Lexmark offers customers a choice when buying replacement toner cartridges: they can buy a “regular cartridge” at the full price without any limitations on use, or they can buy a “return program” cartridge that’s sold at a discount of about 20%.

These discount cartridges, when empty, can be returned only to Lexmark, to be refilled or recycled. The regular cartridges can be thrown out or refilled however the user wants.

The two types of cartridges are otherwise identical.

Return program cartridges come with the following language on the outside of the package:

RETURN EMPTY CARTRIDGE TO LEXMARKFOR RECYCLING

Please read before opening. Opening this package or using the patented cartridge inside confirms your acceptance of the following license agreement. The patented Return Program cartridge is sold at a special price subject to a restriction that it may be used only once. Following this initial use, you agree to return the empty cartridge only to Lexmark for recycling. If you don’t accept these terms, return the unopened package to your point of purchase. A regular price cartridge without these terms is available.

Rip Here to Agree

Lexmark asserts that opening the package creates a patent license and contract between the user and Lexmark.

The Ninth Circuit Court of Appeals found that Lexmark’s contract was enforceable, because it had the following features:

• Consumers are on notice of the contract before they buy the toner.
• Consumers have an opportunity to opt-out by buying a full-price cartridge.
• There’s “consideration” (value) given to consumers in exchange for their agreement – the discount.

Lexmark says that this program is needed to protect the quality and reputation of Lexmark products, since empty cartridges end up with “remanufacturers” who may sell shoddy re-used products.

Other companies, including some foreign ones, have managed to hack Lexmark’s cartridge chips to that they can sell re-filled cartridges that aren’t disabled.

Lexmark sued Impression and others for patent infringement, based on their sales of re-filled cartridges.

According to the Times,

This case raises important questions about the reach of American patent law and how much control a manufacturer can exert after its products have been lawfully sold. Taken to their logical conclusion, Lexmark’s arguments would mean that producers could use patent law to dictate how things like computers, printers and other patented goods are used, changed or resold and place restrictions on international trade. That makes no sense, especially in a world where technology products and components are brought and sold numerous times, which is why the court should rule in favor of Impression.

Public interest groups, as well as technology companies like Google, Intel, and Dell have filed briefs in support of Impression.

What did I just “sign”?

Many people don’t realize that they’re agreeing to legal terms when they open a package, or download an app or other software, but these “shrinkwrap,” “clickwrap,” and “browsewrap” agreements are often upheld by courts.