Tag: ink

A Victory for Small Business VS a Big Business Patent Bully

Yesterday, the Supreme Court officially ruled that printer companies can no longer block retailers from re-selling their stuff at a discount, as their patent rights end at the first point of sale. Who cares about this? You should. That is if you enjoy cheap ink and don’t want to start dipping into your retirement account … read more

Yesterday, the Supreme Court officially ruled that printer companies can no longer block retailers from re-selling their stuff at a discount, as their patent rights end at the first point of sale.

Who cares about this? You should. That is if you enjoy cheap ink and don’t want to start dipping into your retirement account to print that color report.

Yeah actually, why is ink so expensive? 

It’s kind of by design. Printers are sold at cost, or even at a loss to the manufacturer.

Which means the money’s gotta come from somewhere, hence charging premium prices for ink and cartridges to offset the initial deficit. It’s a lot like the razor club model, where the first razor is cheap, and replacement heads are about 1 gold bar per blade. Or the Etsy and Facebook  models, where membership is free,  listings are $0.20 and then they bury you until you pay to unbury them.

Did you know some printers (*cough cough* Lexmark), even have microchips in their “official” cartridges to prevent people from using third party products. (Sounds a lot like the hustle Keurig runs on k-cups, doesn’t it? I hope they’re next!). On Tuesday, a scary case reached a surprisingly positive outcome in the Supreme Court of the United States. Impression Products, Inc. v. Lexmark International, Inc. was seven-year-long standoff between a small business and an international corporation that stood to upend the world of consumer rights, especially for tech and pharmaceutical companies. Guess what: the little guy won!! Woohoo!!

For now. Manufacturers can (and probably will) still hike up new printer and cartridge prices. But for those of us who already own one, looks like we’re sittin’ pretty.

At least until the next paper jam.

Here’s some more detailed information

At its core, Impression v. Lexmark was a tricky patent case. Impression Products, a 25-employee outlet, built its business by buying used printer cartridges, refilling them, and reselling them to consumers. This introduced some welcome competition into the otherwise twisted and monopolistic world of consumer printers and, as a result, made it possible for consumers to save some coin. Obviously, the massive printer empire that is Lexmark did not like this and started suing small companies like Impression a few years ago, based on an idiosyncratic piece of patent law. Impression, the only company that refused to settle, took the case all the way to the Supreme Court and emerged victorious. YAYYYY!!!

In a quasi-unanimous decision, the Supreme Court ruled that Lexmark exhausted its patent rights as soon as it sold printer cartridges both domestically and abroad. (Quasi meaning: Justice Ruth Bader Ginsberg dissented on the international issue, and Justice Neil Gorsuch was not involved in the case~because of the date of his confirmation.) The implications of this ruling aren’t just positive for small printer cartridge-refilling companies either. Had Lexmark won, the decision would’ve changed the way aftermarket sales work in all kinds of industries, namely the pharmaceutical industry. (as well as the upcycle market!!)

But let’s back up a second. Lexmark’s lawyers argued that it retained patent rights on its used printer cartridges because it sold them to customers under a so-called “shrink-wrap license.” That meant that customers could pay 20-percent less for the printer cartridges if they agreed never to resell or reuse them after they’d opened the package. In the past, courts have been okay with this as long as the manufacturer “clearly communicated” these rules. However, until this year, the issue never bubbled up to the Supreme Court. That’s the domestic part of the case.

You might be thinking, “Well, who cares about printer cartridges any more?” But this case reaches well beyond Lexmark’s inkjet revenues. It’s a huge deal for tech manufacturers and pharmaceutical companies, each of whom took different sides in the case. International tech companies are surely thrilled by the Supreme Court’s decision, since they would be faced with bureaucratic hell if the justices had ruled that US patents were valid for goods sold abroad. There are so many different components in any given gadget, from so many different companies, the tech manufacturers would have to secure countless licenses to obey the law.

Big pharmaceutical companies, on the other hand, must be pissed right now. Giants like Pfizer and Eli Lilly and Co. PhRMA wanted the court to protect US patents abroad because that would help them prevent Americans from buying their drugs for much cheaper prices in countries like Canada and Mexico and then bringing them back to the States. When a single Viagra pill costs over $60 in the US, you can only imagine how much money was at stake here.

 All things considered, consumers and advocates for their rights won today. This case has been called the Citizens United of products, but this time the Supreme Court actually came down on the side of the people instead of the corporations. That means you can keep buying cheaper printer cartridges, cheaper smartphones, cheaper drugs—the price of pretty much anything that’s protected by a shady patent isn’t going to skyrocket any time soon. The decision itself sets a precedent not only for ink cartridges, but in Goosie’s interpretation, this could also have some implication in the post sale clothing market as well~ and also plays into the first sale doctrine!
I say hurrah in honor of the win by the underdog, I also say YAY for small business, and am happy overhead costs can be kept at a sane level when it comes to buying ink to print your shipping lables, this decision also makes me WONDER what this holds for patent bullies in the future?