At its most basic, the case is a dispute over Lexmark’s patent rights regarding refilling printer cartridges. Impression Products is a small business with about 25 employees. It specializes in buying used printer cartridges and remanufacturing them. In 2012, Lexmark decided to add Impression to an already existing lawsuit against other remanufacturers. While the other defendants eventually settled, Image has stuck it out and the case has made it to the highest court in the land.
You can read the full, technical details of the case here but the simple version goes like this: Since the ‘90s Lexmark has used what’s called a “shrink-wrap license” with its cartridges. It offers a “prebate” to consumers by knocking off 20% of the price in exchange for their agreement to never resell or reuse the cartridge. The consumer agrees to this the second they open the package. Essentially, Lexmark believes that those cartridges belong to them, not the consumer reselling them because the consumer didn’t have the right to sell them in the first place.
25 years ago, the U.S. Court of Appeals for the Federal Circuit, which hears patent cases, carved an exception out of the patent exhaustion principle allowing patentees to set post-sale restrictions so long as these are otherwise legal and “clearly communicated.” In a separate case, the Federal Circuit concluded that when a patented item is sold abroad, the patentee’s U.S. rights are not exhausted at all. The Federal Circuit upheld both of these precedents when it ruled against Impression Products earlier this year. The Supreme Court has never ruled on either of them.
scotusblog.com
