A California judge has ruled that Lexmark International's laser-cartridge return programme is fair and legal.
Lexmark's rebate programme offers an up front discount to consumers who agree to return used cartridges only to Lexmark for refilling or recycling. The Arizona Cartridge Remanufacturers Association (Acra) had charged in a lawsuit filed in 2001 that the programme, formerly known as Prebate, was illegal under California law because it constituted unfair and deceptive business practices as well as deceptive advertising.
Judge Saundra Brown Armstrong dismissed Acra's lawsuit. "Because of its patents, Lexmark has the right to impose conditions on the sale of its patented product. It may restrict a purchaser's ability to repair it, which is what, in essence, the single-use condition does," the judge wrote in her ruling.
The ruling concluded that “Lexmark has adequately shown that there is little, if any evidence to support Acra’s contention that the Prebate programme is misleading, deceptive or unfair.”
Printer makers make recurring profits by selling replacement cartridges, but other companies have entered the lucrative market by buying empty cartridges from users, then selling the refurbished and repackaged cartridges.
Acra had claimed that Lexmark's rebate programme, as well as the use by Lexmark of a "lock-out" chip in its latest Prebate products, was unfair. According to Acra, the chip is intended purely to lock out Prebate cartridges remanufactured by third parties for use in Lexmark printers.
The judge ruled that Acra had not sufficiently proven its case regarding the lock-out chip. "Acra brought forth exactly one Lexmark purchaser who complained of being frustrated and dissatisfied. Frustration and dissatisfaction, however, do not equate to deception," she added.
Lexmark welcomed the ruling in a statement, adding that it continues to offer more choices in toner cartridge purchases than any other laser printer manufacturer.
Acra has 30 days to file an appeal.
A separate lawsuit brought by Lexmark against Static Control Components is still pending. Lexmark has charged that a microchip, the Smartek, made and used by SCC in remanufactured laser printer toner cartridges to defeat Lexmark's technological controls, is a violation of the Copyright Act and the Digital Millennium Copyright Act.
Static Control is one of the sponsors of the Acra lawsuit, Lexmark said in its statement.
Laura Rohde writes for IDG News Service