COPYCENSE

“Have you noticed that when you ‘update’ a product these days, you have to be on your guard lest the vendor slip in a ‘downgrade’?

“The latest TiVo OS ‘update’ causes some TiVos to start popping up red copyright warning flags on certain saved programs.”

EFF Deep Links. TiVo Owners: Got Macrovision? Sept. 14, 2005.

See also:

PVRblog. TiVo 7.2 OS Adds Content Protection, Blocks Transfers, and Auto-Deletes Some Shows. Sept. 13, 2005.

CopyCense™: K. Matthew Dames on the intersection of business, law and technology. A business venture of Seso Digital LLC.

“If you were to accept patent production as a good proxy for innovative ability, you would quickly conclude that one of the software giants is a whole lot more creative than the others.

“Piling up patents, though, can have as much to do with business strategy as with inventing things. Nowhere is that more true than at software companies, which make products that weren’t even patentable in the U.S. until 1981, and which still have widely varying approaches to the task of managing their intellectual property.”

Stacey Higginbotham. How Open? That’s the Big Patent Question. News.com. Sept. 25, 2005.

“If you were to accept patent production as a good proxy for innovative ability, you would quickly conclude that one of the software giants is a whole lot more creative than the others.

“Piling up patents, though, can have as much to do with business strategy as with inventing things. Nowhere is that more true than at software companies, which make products that weren’t even patentable in the U.S. until 1981, and which still have widely varying approaches to the task of managing their intellectual property.”

Stacey Higginbotham. How Open? That’s the Big Patent Question. News.com. Sept. 25, 2005.

Commentary by K. Matthew Dames, executive editor.

With all the recent information law activity surrounding file sharing, broadcasting, and Google Print, an interesting licensing case involving Lexmark slipped under my radar.

Lexmark, of course, is the printer and cartridge manufacturer that unsuccessfully tried to leverage the Digital Millennium Copyright Act (DMCA) to keep competitor cartridge printer from developing similar cartridges. Lexmark has sold discount toner cartridges for its printers that only Lexmark could re-fill and that contained a microchip designed to prevent Lexmark printers from functioning with toner cartridges that Lexmark had not re-filled. Lexmark’s actions are familiar: use technology to lock in customers while eliminating competing products.

A North Carolina company called Static Control Components (SCC) mimicked Lexmark’s computer chip and sold it to companies interested in selling remanufactured toner cartridges. In December 2002, Lexmark sued to stop the sale of SCC’s computer chips.

Lexmark raised three theories of liability, including one in which Lexmark claimed that SCC’s product copied Lexmark’s Printer Engine Program, thereby violating the DMCA (specifically Section 1201(a)(3)). After an evidentiary hearing, a federal district court in Kentucky ruled that Lexmark had shown a likelihood of success on each claim and entered a preliminary injunction against SCC. A federal appeals court reversed the district court’s ruling in October 2004.

At the time, it seemed the October 2004 decision was the end of this controversy. But earlier this month, the Electronic Frontier Foundation’s Deep Links blog reported that a federal appeals court earlier this month has given a green light to a new Lexmark tactic: combining licensing and patent law to create the same customer lock-in effect that the company failed to achieve via the DMCA.

Says EFF’s Fred von Lohmann:

According to Lexmark, the ‘single use only’ label on the boxes of their ‘Prebate’ printer cartridges creates an enforceable contract between Lexmark and consumers. By opening the box, you’re agreed to the contract. It’s a variant on the ‘shrinkwrap license’ that used to appear plastered on software. … If you step outside the bounds of the ‘contract’ (by giving your spent cartridge to a remanufacturer), you’re suddenly a patent infringer. More importantly, Lexmark can sue cartridge remanufacturers for ‘inducing’ patent infringement by making and selling refills.

Later in the same post, Von Lohmann points out that patent owners may “exploit this decision as an opportunity to impose over-reaching restrictions on formerly permitted post-sale uses.” I would counter that the same effect can be achieved through drafting an artfully crafted license. And the interesting thing about pursuing the license route is that it is considerably less expensive to draft a restrictive license than to apply for and receive a patent (even with the Patent & Trademark Office’s rather liberal current standards for awarding technology patents to large corporations).

EFF Deep Links. The Shrinkwrapification of Patented Goods. Sept. 2, 2005.

See also:

The Gripe Line Weblog. Lexmark Wins the Right to Sue Its Customers. Sept. 8, 2008.

United States Court of Appeals for the Ninth Circuit. Arizona Cartridge Remanufacturers Assn., Inc. vs. Lexmark Intl., Inc. (.pdf). Aug. 30, 2005.

CopyCense™: K. Matthew Dames on the intersection of business, law and technology. A business venture of Seso Digital LLC.

“The club’s first member was Patricia Santangelo, a single New York mother of five. Next came Dawnell Leadbetter, another single mother, this time from the Seattle area. If you’re a regular p2pnet reader, you’ll recognize both of the above names.

“By now, you’ll have probably guessed the club members are all women being brutally victimized by the huge, multi-billion-dollar record label cartel that’s using its immense financial and political weight and deep, dark connections to law enforcement agencies in a bizarre marketing scheme.

“They stand out because they’re standing up, defying the Mafia-like labels and their teams of hired legal thugs who work through ‘Settlement Centers’ which aim to terrorize people into paying ‘fees.'”

P2PNet.net. The “We’re Not Taking Any More” Club. No date.