Static Control vs. Lexmark
June 1, 2007
(6/22/07) Lexmark said that the effect of decisions in litigation in the U.S. District Court, Eastern District of Kentucky, Frankfort, Ky., is to affirm the legality of Lexmark’s Return Program for laser printer toner cartridges and to affirm that certain remanufacturers are violating Lexmark patents when they remanufacture Lexmark Return Program toner cartridges.
Central to the litigation brought by Lexmark against Static Control Components Inc. is Lexmark’s popular Return Program for laser printer toner cartridges under which customers can get discounted cartridges in return for agreeing to return the used cartridges only to Lexmark for remanufacturing or recycling. Lexmark uses the returned laser printer toner cartridges in its own remanufacturing business. Lexmark has always offered laser printer toner cartridges without a discount that may be remanufactured by anyone, assuring both customer choice and the opportunity for fair competition.
Over the course of the litigation, the court ruled that Lexmark’s
patents were valid, covered Lexmark’s toner cartridges and that
Lexmark’s patent license under the Lexmark Return Program was valid and
enforceable. Although the jury found that Lexmark had failed to prove
that Static Control had induced its customers to infringe Lexmark’s
patents, the court found that Static Control engaged in direct patent
infringement and that certain third parties who engaged in the
remanufacture of Lexmark’s Return Program laser printer toner
cartridges were in direct violation of Lexmark’s patent rights. Three
remanufacturers who were parties in the lawsuit earlier, NER Data Inc.,
Pendl Companies Inc. and Micro Solutions Enterprises (MSE)/Wazana
Brothers International Inc., settled and admitted the validity and
enforceability of the Lexmark patents and the Lexmark Return Program.
In addition, Static Control’s antitrust and false advertisement
allegations against Lexmark were dismissed by the court.
“Lexmark’s Return Program benefits customers, is good for the environment and is fair to the competition. The impact of the decisions of the court is both meaningful and positive. We will continue to pursue claims whenever and wherever necessary to protect Lexmark’s intellectual property,” said Vincent J. Cole, Lexmark vice president and general counsel.
Lexmark originally filed suit in U.S. District Court, Eastern District of Kentucky, in 2002.
(6/22/07) Static Control Components can declare victory in its long battle against Lexmark.
Late Friday afternoon a jury ruled Lexmark failed to prove SCC induced remanufacturers to violate patents. The jury deliberated for about a day before returning the verdict, which was issued after five weeks of trial, and almost five years after Lexmark's initial DMCA claim. That claim was dismissed in 2004; the patent violation claim was the one remaining count in Lexmark's claim against Static Control.
The jury also found some of Lexmark's practices to be anti-competitive in nature. However, that portion of the verdict is not binding, and only a recommendation. Judge Greg Van Tatenhove will make the final ruling; that ruling was not expected to happen immediately, however.
The Lexington Herald-Leader reported Static Control CEO Ed Swartz said he was "very gratified" by the jury's verdict.
"I think the industry will be very happy … as well," Swartz said. "I think this is a very pro-consumer, money-saving, economically sound decision for the American consumer. This gives the consumer a choice he would not have had Static Control not fought Lexmark."
Lexmark declined immediate comment. The company was expected to issue a statement at a later time.
For more visit: http://www.kentucky.com/103/story/105197.html
(6/22/07) Jury Deliberations Begin in SCC vs. Lexmark
More than a month after the trial began, a jury is now in deliberation in the Static Control v. Lexmark trial, the case that began on New Year’s Eve 2002 when Lexmark first filed charges of DMCA violation against SCC.
Today the jury is being asked, among other things, to determine whether Static Control knowingly induced other remanufacturers to infringe on Lexmark patents.
Those other remanufactures include MSE, Pendl and NER Data Products – companies that were at one time co-defendants and counterclaimants in the trial but have since settled. Representatives of some of those companies have remained listed as witnesses in the trial.
Static has claimed that Lexmark misused the scope of its patents by misrepresenting IBM cartridges as Prebate, and also that the non-Return Program cartridge labels purposefully misled customers into believing that they still had to return them to Lexmark.
(5/29/07) Micro Solutions Enterprises (MSE) and Lexmark entered into a settlement agreement this week in the ongoing Static Control vs. Lexmark case, in which MSE/Wazana Bros. was a counterclaim defendant. According to court documents, MSE and Lexmark have agreed to the dismissal of all claims between them.
Earlier in the case counterclaim defendants NER and Pendl also reached settlements.
The case, which went to court May 15, remains in jury trial. Court documents posted May 29 show jury instructions continue to take place, and the court continues to rule on various objections being presented by both parties. In addition, William “Skip” London, Edwin Swartz and William Swartz were scheduled to take the stand this week.
