A court case under way in the US could have a chilling effect on the market for discount printer cartridges.
The case has been brought by printer manufacturer Lexmark against Static Control Components (SCC) under the US Digital Millennium Copyright Act.
At stake is Lexmark's dominance - along with Hewlett Packard (HP), Canon and Epson - of the market for printer consumables. SCC manufactures chips that go into inkjet cartridges used by companies in the US and Europe which sell third-party cartridges. The chips mimic those used by companies such as HP, Lexmark, Canon and Epson, which communicate with the printers about ink levels.
Lexmark has accused SCC of violating its copyrights by manufacturing the Smartek chip which allows other companies to refurbish used Lexmark-made cartridges on four of Lexmark's high-speed office laser printers.
The significance of the case goes beyond Lexmark and laser printers, as it will potentially affect the whole market for remanufactured printer cartridges, including inkjets.
Lexmark claims that it is illegal to offer products to other companies that are designed to circumvent technical measures it has put in place to protect its products.
Printer companies make more money from the sales of printer supplies than from the printers. Lexmark will not say how much of its profit comes from the sale of supplies, but analysts put the figure as high as 90 per cent.
Third-party inkjet cartridge manufacturers only account for around 22 per cent of sales to consumers at the moment, but they do represent a growing challenge to the dominance of the four major companies.
Neither company would comment on the case to vnunet.com, but if Lexmark wins the case it could throw the remanufacturing market into chaos, according to David Marsh, a solicitor with law firm Dickenson Dees.
"How much it would affect companies in Europe would depend on two things if Lexmark wins the case," he said.
"If SSC is found guilty of copyright infringement Lexmark would have a very strong basis for legal action in Europe to make SSC stop selling these chips.
"This is because copyright laws between the US and Europe are so similar.
"If SSC is only found guilty of patent infringement, because patent laws tend to be territorial it could be harder to make a case in Europe.
"You could have the situation where SSC could sell in Europe but not in the US."
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