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October 30, 2003

A small victory vs. DMCA

The U.S. Copyright Office ruled that Static Control Components microchips do not violate the DMCA. Lexmark (among others) have chips in their cartridges that detect when the cartridge is “empty”. Once the chip has detected an empty state the cartridge is useless, even if you refill it with ink the chip will always report the cartridge as empty. SCC developed a replacement, compatible chip so that it can refurbish the cartridges and resell them. Lexmark sued SCC in 2002 using their chip and the DMCA to protect their ink sales from competition. There have also been reports that Lexmark chips are actually set to report empty when the cartridge is only 2/3 to 3/4 empty–increasing ink purchases. Now SCC gets to look at how much their sales etc. were damaged by Lexmark, and seek damages. Of course this ruling will also mean that printer manufacturers will have to re-evaluate their pricing models. Especially in the low price printers the actual printer is often sold at margin or at a loss, but the markup on the ink cartridges more than makes up for it.

In the greater scheme of things though this puts a dent in the DMCA as it specifically allows development of compatible software and hardware to provide recycling and remanufacturing of ink and toner cartridges. This ruling will hopefully get expanded to cover similar areas in the future.

Posted by Eric at October 30, 2003 04:46 PM | TrackBack
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