Print Cartridge Resale Case Hits The Supreme Court—Ruling Could Have Broad Impacts

Mar 31, 2017 | Posted by James P. Leonard | Topic: Class Actions

Retailers, resellers, major corporations, and scholars across the country have been closely watching Impression Products Inc. v. Lexmark International, Inc.

The case itself is about printer cartridges—Impression Ink is in the business of “recharging” and reselling used printer cartridges.  Based on the “conditional sale” terms that accompany its cartridges Lexmark argued that it has the right to enforce its patents on its cartridges even after the cartridge has been sold, seeking to limit the resale or modification of its printer cartridges. 

And, Lexmark won its argument in the patent appeals court.

This ruling, which is now being considered by the highest court in the land, has drawn attention all across the spectrum.  At stake is the patent principle of exhaustion—which generally states that the owner of a patented product benefits from the original sale—but does not recoup its patented benefit on subsequent sales.  Far more than printer cartridges sales are in the crosshairs.  The AARP, Costco, Intel and other industry and public interest giants (and the Department of Justice) all filed briefs supporting Impression - citing their concerns about everything from potential impacts on supply chain operations to pharmaceutical products.  Major patent holders also filed briefs in support of Lexmark.

The United States Supreme Court heard arguments this month.  Speculation regarding the outcome is rampant.  Reportedly there is not much case law to guide the Justices, and their decision could have major implications.  (Recall—there is the possibility of a 4-4 tie, which would make the patent court of appeals decision the law of the land.)  If the Justices cannot craft a narrow ruling, everything from the secondary ink market to smartphones and medicine may be severely impacted by this matter.