updated 02:03 pm EDT, Wed March 26, 2014
Clone refill chip manufacturer allowed to seek redress for Lexmark actions
The Supreme Court of the US has ruled against Lexmark, allowing a company it filed a Digital Millennium Copyright Act (DMCA) against erroneously to seek legal recompense. The unanimous ruling will allow chip manufacturer Static Control Components (SCC) to seek redress against Lexmark for tarnishing its business reputation, when Lexmark falsely induced consumers "to believe that [SCC] is engaged in illegal conduct."
Static Control Components manufactured a microchip, enabling Lexmark printer cartridges to be refilled by third-parties. Lexmark filed a DMCA complaint, sued Static Control, and informed consumers that it thought the chip manufacturer was breaking the law by manufacturing the refill-enabling chip. The copyright issue involving SCC's chip was concluded years ago, in SCC's favor.
Justice Antonin Scalia wrote the briefing on the ruling. Drawing a parallel to the automotive industry, he asked readers to "consider two rival carmakers who purchase airbags for their cars from different third-party manufacturers. If the first carmaker, hoping to divert sales from the second, falsely proclaims that the airbags used by the second carmaker are defective, both the second carmaker and its airbag supplier may suffer reputational injury, and their sales may decline as a result."
The ruling will not affect consumer law much, if at all. SCC is allowed to build and sell the refill chips, and has been for years, following a protracted court battle. The ruling today posits that SCC may have been damaged by Lexmark's false DMCA claim, and that it may seek redress from the courts.