Lexmark's "Shrinkwrapification" of Patented Goods

Lexmark has long been looking for ways to thwart the refilled toner cartridge market. It was unsuccessful earlier this year when the Sixth Circuit ruled against Lexmark's DMCA defense.

EFF writes of the latest method, shrinkwrapification:

Now Lexmark . . . has turned to patent law to prop up its effort to keep its customers in bondage. According to Lexmark, the "single use only" label on the boxes of their "Prebate" printer cartridges creates an enforceable contract between Lexmark and consumers. By opening the box, you're agreed to the contract. . . .

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.

More: ACRA v. Lexmark, No. 03-16987 (9th Cir. Aug. 30, 2005) [pdf - holding that Lexmark's "Prebate" program did not constitute deceptive and unfair business practices].

More: Lexmark press release ("Ninth Circuit Court of Appeals Upholds Lexmark Cartridge Return Program"):

Joining every other court that has ruled upon challenges to the Lexmark cartridge Return Program (formerly known as Prebate), the Ninth Circuit reaffirmed the legality of this highly successful and environmentally friendly program.

Lexmark offers customers discounts on new cartridges in return for their agreement to return the used cartridges only to Lexmark for remanufacturing or recycling. Lexmark uses the cartridges in its remanufacturing business. In order to facilitate competition and customer choice, Lexmark has always offered cartridges without a discount that may be remanufactured by anyone for those customers who desire it.

Prior posts:
    June 8, 2005 - Lexmark Loses Supreme Court Bid in DMCA Suit Against SCC.
    Mar. 17, 2005 - Review of Two DMCA Cases: Lexmark and Chamberlain.

Update (Sept. 5, 2005): More at Patently-O (including overview of the 9th Circuit case, commentary, and additional links).