
SCOTUS: Patent Rights Over a Printer Cartridge Are Exhausted When It Is Sold - beefman
https://www.law.cornell.edu/supremecourt/text/15-1189
======
touchofevil
If you want to learn about a really interesting aspect of the "first sale
doctrine" and how it applies to software, you should have a look at "Vernor vs
Autodesk" in the USA and compare it to "Oracle vs UsedSoft" in the EU.
Basically, in the USA the courts determined that if a company sells you
software, but in their terms & conditions claim that they are merely granting
you a license, then you can't resell the software b/c you aren't considered to
own it. In the EU however, if a company sells you a permanent life-time
license in exchange for a one-time fee, the courts determined that you aren't
merely licensing that software, you own it and you are allowed to resell it.

I think these different rulings haven't been fully appreciated yet. For
example, if you buy Apple's Final Cut X for $299, you should be allowed to
resell that software if you live in the EU, but there is currently no way to
transfer licenses between users, preventing users from reselling it. It seems
to me that by preventing users from reselling their software, Apple (and the
Google Play Store) are probably violating EU law on this matter.

~~~
joshuak
That sounds a little better than the ridiculous Autodesk decision, however it
sounds trivial to circumvent by simply putting a 'term of license' clause in
the EULA.

I'd go so far as to say I don't think EULAs should be considered a valid legal
instrument.

~~~
Tuna-Fish
In the EU, that doesn't work. Specifically because none of the conditions of
the EULA apply to the sale unless you were presented it before you paid for
the product. If it's possible to purchase the product in such a manner where
you are not presented the EULA before you bought it, you can ignore a lot of
it's conditions.

~~~
codedokode
If a seller wants to impose some conditions of course he should do so before
selling his product rather than try to deceive a customer after purchase. Only
a dishonest seller would do such a thing.

~~~
pbhjpbhj
IMO any company that is using words like buy, sell, sale, purchase, get, of a
product and not specifying they are selling only a _license agreement_ are
committing a heinous fraud and should be fined no less than a years median
profit (or, let's say, 5% of revenue as an underpin).

Sure, advertise "get license to use Wandows for a limited period, further
restrictions on use apply" but if you say "get Wandows for $100" then you sold
it and no EULA or other additional restrictions can apply; and no, small-print
doesn't count.

------
awjr
In short, the sale of a product does not allow you to control what is done
with the product afterwards through patent law.

I'm assuming this is almost similar to attempts to use copyright law to stop
the sale of products on the grey market. [http://www.bipc.com/court-rebuffs-
attempt-to-use-copyright-l...](http://www.bipc.com/court-rebuffs-attempt-to-
use-copyright-law-to-prevent-grey-market-imports)

I do wonder though, if they changed the underlying software on the cartridges
they would get into trouble. I do not see this stopping John Deere's practice
of locking up their hardware through copyright laws.
[https://www.wired.com/2015/02/new-high-tech-farm-
equipment-n...](https://www.wired.com/2015/02/new-high-tech-farm-equipment-
nightmare-farmers/)

~~~
pitaj
I was under the impression that John Deere's restrictions were licensing-
based. But maybe they rely on copyright as well?

~~~
zardo
They did, untill it they lost the ability to do so under the DMCA back in
2015. All though they could be re-allowed in 2018. The library of Congress
gets to reinterpret it every three years.

~~~
indolering
It will be renewed: there is zero evidence of John Deere being harmed by
others performing warranty-voiding repairs.

That and it effectively divides up lobbying power against the DMCA. It doesn't
matter if the analog loophole effectively dooms all forms of DRM on music,
video, and books or that video game DRM is always hacked within a few months.
What matters is that snake-oil salesmen have convinced Hollywood that it's a
good idea and they have a very effective lobbying group.

------
roywiggins
When you can cite Lord Coke in your opinion, I guess it's practically
mandatory to do so.

> As Lord Coke put it in the 17th century, if an owner restricts the resale or
> use of an item after selling it, that restriction “is voide, because . . .
> it is against Trade and Traffique, and bargaining and contracting betweene
> man and man.” 1 E. Coke, Institutes of the Laws of England §360, p. 223
> (1628)

~~~
owenversteeg
Semi-off-topic: I've noticed that Coke's writings are a bit more similar to
"modern English" than other things I've read written in the 1600s. This
surprised me, because he was a judge and probably wrote in formal language for
the time. Formal language, to me, seems perpetually set back to the way people
talked about 60-100 years previously. Thus you'd expect Coke to sound like
he's writing in the 1500s, but instead he sounds like an 1800s writer.

Perhaps I've caught a time-traveler? If so, to Coke: I'm having some friends
over for dinner tonight, and you're welcome... email's in my profile if you
need directions ;)

~~~
mayoff
I don't know anything about Coke, but my impression of SCOTUS opinions is that
they often use language I wouldn't consider formal. Consider the first
sentence of section II-A of this decision:

> First up are the Return Program cartridges that Lexmark sold in the United
> States.

I often find the decision to be more readable (if much longer) than the
syllabus.

------
jasonlfunk
The Planet Money podcast recently did an episode about this case:
[http://www.npr.org/sections/money/2017/03/31/522226226/episo...](http://www.npr.org/sections/money/2017/03/31/522226226/episode-762-the-
fine-print)

~~~
dangerboysteve
I listened to this podcast yesterday. Planet Money is well produced and
entertaining as heck!

------
gameshot911
Can someone clarify one part:

>The other option is to buy a cartridge at a discount through Lexmark’s
“Return Program.” In exchange for the lower price, customers who buy through
the Return Program must sign a contract agreeing to use the cartridge only
once and to refrain from transferring the cartridge to anyone but Lexmark.

>As a result, even if the restrictions in Lexmark’s contracts with its
customers were clear and enforceable under contract law, they do not entitle
Lexmark to retain patent rights in an item that it has elected to sell.

There are two issues at play here, right? One is Lexmark's patent rights, and
the other is the contract between Lexmark and the consumer. The Supreme Court
held that Lexmark can't use patent rights to prevent refilling the cartridges,
but what of the contract? Is _that_ enforceable?

~~~
tbirrell
No. That's what SCOTUS is saying. Lexmark is trying to enforce a contract over
an item that they do not control. Is like if you signed a contract with me
that every time you handed someone a glass of water, you would require them to
say "thank you" in a non-native language. I have no control (legal or
otherwise) over your actions or the glass or the water, therefore the contract
is not enforceable.

In the case, Lexmark relinquished its rights to the physical product in
question when they sold it. Then on the basis of patent law (the idea that
they own the rights to the "idea" of the toner), they tried to say that you
may not sell it to anyone else. What SCOTUS is pointing out is that Lexmark's
patent does not grant them control of a product they made and sold.

To be clear here, the patent prohibit others from making (and subsequently
selling) these toners, but if Lexmark made the toner, all bets are off.

~~~
LukeShu
No. Lexmark _can_ negotiate a contract with its customers (this is unrelated
to patent rights). But, if the customer sells the item to a 2nd customer
(possibly in violation of the contract), then that 2nd customer is not subject
to the contract, as the contract was between Lexmark and the initial customer.

SCOTUS is saying that they can't use _patents_ to say you may not sell to
anyone else. You can instead use _contracts_ to say these things, but those
contracts are with the initial customers only, and don't "flow through the
market" with the item.

~~~
bluGill
It is quite likely that Lexmark sold the cartridge to a reseller (think
walmart) who sold it to the consumer. Thus Lexmark may not be able to sue the
end users successfully because there was no contract - though they could sue
the reseller (walmart in this example).

Of course suing your customers is a PR disaster even if you would win. Suing
resellers is a bad idea as they will never carry anything you make again which
means you might win one round but you can declare bankruptcy. Even if sue
OfficeMax with a promise to not sue Walmart, expect that walmart drop you
anyway as they cannot afford that risk.

~~~
aaron_m04
What they could do is make the cartridge inoperable without online activation,
in which the customer has to agree to terms of use. Damn, that's evil...

~~~
LoSboccacc
they do already with the printer it'd be interesting if that could cover usage
of purchased accessory

------
3JPLW
The text is the same, but I find the official PDF better typeset and much more
readable:
[https://www.supremecourt.gov/opinions/16pdf/15-1189_ebfj.pdf](https://www.supremecourt.gov/opinions/16pdf/15-1189_ebfj.pdf)

~~~
zeeveener
What an amazing waste of space on the paper... I mean, yes margins are good,
but when you lose 60% of the page to them they might be overbearing.

~~~
rkangel
My guess is that it is typeset for a particular journal of law - whatever is
used to officially document SCOTUS decisions, with an appropriate column size
for that. The additional electronic publishing is just using the same format
but slapping it in the middle of A4/Letter.

------
Angostura
That's a fascinating judgement and the hypothetical case that they use to
illustrate things seems interestingly chosen:

>But an illustration never hurts. Take a shop that restores and sells used
cars. The business works because the shop can rest assured that, so long as
those bringing in the cars own them, the shop is free to repair and resell
those vehicles. That smooth flow of commerce would sputter if companies that
make the thousands of parts that go into a vehicle could keep their patent
rights after the first sale. Those companies might, for instance, restrict
resale rights and sue the shop owner for patent infringement. And even if they
refrained from imposing such restrictions, the very threat of patent liability
would force the shop to invest in efforts to protect itself from hidden
lawsuits. Either way, extending the patent rights beyond the first sale would
clog the channels of commerce, with little benefit from the extra control that
the patentees retain. And advances in technology, along with increasingly
complex supply chains, magnify the problem. See Brief for Costco Wholesale
Corp. et al. as Amici Curiae 7–9; Brief for Intel Corp. et al. as Amici Curiae
17, n. 5 (“A generic smartphone assembled from various high-tech components
could practice an estimated 250,000 patents”).

------
joshuak
Good, but the tip of the issue is licensing. Autodesk[1] has set precedence
that all an organization must do to limit the resale of anything is institute
a EULA. Simply by asserting that an offer is for a license not the thing being
licensed the seller can bypass common law, Lord Coke, and the first sale
doctrine.

P.S. This also means that expensive professional software like Autodesk's, or
anything with such an EULA, cannot be considered an asset since it has no
dollar value after purchase.

1: [https://www.wired.com/2010/09/first-sale-
doctrine/](https://www.wired.com/2010/09/first-sale-doctrine/)

~~~
Omniusaspirer
There seems to be a logic gap here if I'm understanding the possibilities
correctly.

What stops me from founding a company through which I get paid, leveraging
that company to purchase 100% of my "assets", then instituting a EULA and
selling (at no cost) a lifetime license to use anything I want to myself? As
per your logic (as I understand it), I could then declare myself utterly
destitute and owning $0 worth of assets. My company could also claim $0 worth
of assets.

At that point, could I not play any number of games to increase eligibility
for government assistance programs or reduce tax burden?

(This is a quick thought, so if there's any glaring flaws in this idea please
do point them out.)

~~~
joshuak
> My company could also claim $0 worth of assets.

Why?

If the company buys assets and sells or transfer's them to you, the fact they
are not assets to you doesn't really change the facts for the company do they?

However, if your company buys stuff with a EULA that prohibits resale then
those purchases are an immediate 100% loss. If the company must liquidate the
following day those purchases will not contribute to recovering any investment
value.

Look at visual effects and post production companies in M&E, a large part of
Autodesk's addressable market. These companies are constantly going out of
business, and the unrecoverable costs of very expensive software contributes
to this volatility.

~~~
Omniusaspirer
If I'm licensing from my company, what legal mechanisms force that asset to
still be owned by my company? Can I not license it to myself under some vague
EULA terms in which the company gets it back upon my passing, but I'm
forbidden from reselling (and thus it's not an asset for me either)? If the
key to this is the "licensing" of a product forbidding resale, I'm not seeing
how that isn't a financial black hole into which assets disappear.

------
ryandamm
This is really similar to the concept of 'first sale' in copyright law, which
similarly prevents the copyright holder from using copyright to restrict what
a buyer does with the object.

Glad to see it extended to patent law as well.

~~~
chc
The first sale doctrine was already reflected in both areas of law. What this
decision is about is whether patents are still exhausted if you sell the
product with an EULA-style list of restrictions. Lexmark argued that because
they specified that the cartridges were only to be used once, they retained
their rights and ability to sue. The court determined that the restrictive
sale contract did not prevent patent exhaustion.

~~~
lisper
Not quite. The court determined that sale exhausts their ability to sue under
_patent_ law. They explicitly left open the possibility that they could sue
(and prevail) under contract law. (The problem with suing under contract law
is that they would have to sue the original purchaser, which presents
significant logistical challenges.)

------
doodlebugging
This case sounds similar to the ruling back in the 1980's (I think) that came
from a suit by the makers of Warn winches against a North Texas trailer
maker/seller.

From flawed memory, the trailer sales business offered the Warn product line
at prices well below those of other Warn dealers and below the suggested
retail prices from Warn. He was sued by the manufacturer in an attempt to get
him to raise the prices and he prevailed I think based on first sale doctrine
since the court ruled that Warn had already been paid for the product and that
ownership and control of the winches passed to the trailer manufacturer who
was thus free to advertise and sell them at any price he desired even if it
meant he took a loss on each one sold. They belonged to him and he could do as
he pleased with them. He had been using them as a kind of loss leader where
one of the incentives of buying a trailer allowed you to purchase a winch at a
large discount.

EDIT: The case was not Warn winches, it was Ramsey winches and the ruling was:

([http://openjurist.org/753/f2d/416/pierce-v-ramsey-winch-
comp...](http://openjurist.org/753/f2d/416/pierce-v-ramsey-winch-company-a))

Briefly - I have a bad memory. The case was a lot more involved since Ramsey
tried to terminate the distributor agreement and was thus sued by Pierce
Sales. Pierce was a high-volume winch dealer and due to the high volume of
sales he was able to buy the winches from Ramsey at the lowest price available
to dealers. He then used that buying power to advertise the lowest prices for
the winches and even offered other dealers the opportunity to buy hard-to-find
winches directly from his stock at prices lower than they could buy directly
from Ramsey if that particular winch was even available from Ramsey stock.
Pierce alleged price-fixing by Ramsey and ultimately won the case.

I remembered the court case but almost none of the pertinent details.

Sorry.

------
ChuckMcM
Yay, hopefully this will translate into a non-crazy ink refill situation which
will translate into a much reduced price in ink cartridges. My hope is that
the following will occur;

1) People who sell re-filled cartridges, and offer to refill your existing
cartridges will no longer suffer malicious lawsuits from HP & Lexmark.

2) That will increase the supply and create a price competition between re-
fillers. Making it possible to easily find ink cartridges at 1/2 to 1/3 the
price that the printer manufacturer sells it for.

3) The manufacturers will reduce prices on their ink cartridges in order to
support their revenue stream.

I also expect more counter measures like ink cartridge chips that 'self
destruct' when the cartridge is exhausted to prevent refilling. And aggressive
prosecuting under the DMCA people who reverse engineer cartridge chips to
create work alike versions.

~~~
gnicholas
Don't forget:

4) if HP & Lexmark are unable to use the DMCA to stop cartridge refillers,
then the price of printers will go up, as the printer manufacturers won't be
able to make any profit on cartridge sales. They'll instead have to make all
their profit on the initial sale of the printer.

~~~
socalnate1
Isn't this a good thing? I'd rather not companies obfuscate the true cost of
the things I buy.

~~~
gnicholas
You make a good point that it is good for consumers to be informed. But it is
also a good thing for sellers to be able to price discriminate between high-
volume and low-volume users, which is made possible by making more profit on
the ink than on the printer. If they could not do this then printers would be
more expensive than most people would want to pay, even though the cost of
production is actually less. So there would be a lost opportunity from gains
from trade, which results in decreased total social welfare.

But to reiterate, yes it would be good if we all knew how much cartridges
would cost up-front. I've even heard of some printer companies (Samsung, if
memory serves) selling printers with half-full toner cartridges, to make the
up-front cost even lower. This gives consumers the (false) impression that
toner will be cheaper than it is, on the thinking that "I just bought printer
+ toner for $80, therefore toner obviously costs much less than this".
Unfortunately, this isn't true when it's a half-full toner cartridge.

~~~
ghaff
As I recall, one of the endless antitrust-related suits that IBM was once
involved with was a similar sort of price discrimination case involving
printer supplies. "Overcharging" for supplies that you alone can supply is a
very straightforward way to do usage-based pricing on products that can't
easily be sold that way.

------
DannyBee
In practice it means people will still be able to stop you from doing things
with stuff you own. Just not using patent rights. Lexmark's real problem here
is that its enforceable contracts are usually with the resellers, and so
enforcing against a third party purchaser is trickier, so it tried to use
patent law instead. (It has plenty of contracts, including on the wrapping of
the printer cartridges, I'm just sticking with the ones that are easy to
enforce)

~~~
Glyptodon
All they really need to do is make cartridges rentals instead of sales, no?

~~~
gist
Perhaps also by a clever rebate scheme.

Product price is $180. Rebate is $40. Applying for and getting the rebate
necessitates signing of a 'contract' which prohibits certain action. [1]

[1] May not hold up in advanced legal cases but enough of a leg to stand on to
get the ball rolling.

~~~
dsp1234
FTD:

 _" The other is to buy a cartridge at roughly 20-percent off through
Lexmark’s “Return Program.” A customer who buys through the Return Program
still owns the cartridge but, in exchange for the lower price, signs a
contract agreeing to use it only once and to refrain from transferring the
empty cartridge to anyone but Lexmark."_

Note that because the contract is with the purchaser, and not with the
refiller/reseller, Lexmark can only use the original purchaser. Which is why
they turned to patent law in order to try to and stop the refiller/reseller.

------
kevin_b_er
You better be glad it went this way, or you would have no reasonable property
rights. All objects may have contained an unknowable restriction on their use
or ownership. Everything could have what is tantamount to an easement and you
wouldn't know what it was unless you found out how it was first sold.

Fortunately sanity on basic notion of property rights remains within the
SCOTUS.

------
inputcoffee
Some context for this consequential decision:

[http://www.npr.org/2017/04/06/522826514/supreme-courts-
decis...](http://www.npr.org/2017/04/06/522826514/supreme-courts-decision-
about-printer-cartridges-could-have-big-consequences)

~~~
Steko
I wonder if this will affect the various Qualcomm suits. Qualcomm tries to
collect patent royalties from (say) Foxconn based on the sale price between
(say) Apple and the carrier/consumer.

Edit: moved long commentary from FOSS blog to separate thread:

[https://news.ycombinator.com/item?id=14448205](https://news.ycombinator.com/item?id=14448205)

~~~
test6554
If Apple purchased Qualcomm chips and then resold them as part of the iPhone,
then it might affect those suits, but this is not the case.

Apple licenses proprietary Qualcomm technology from Qualcomm. Apple uses the
technology, but builds its own chips.

~~~
Steko
No Qualcomm's licenses are with Foxconn et al. Apple has been negotiating for
a direct license but they haven't reached any agreement:

[http://www.reuters.com/article/us-apple-lawsuit-qualcomm-
idU...](http://www.reuters.com/article/us-apple-lawsuit-qualcomm-
idUSKCN18D1EC)

Qualcomm apparently filed an amicus brief in support of Lexmark in this case:

[http://www.scotusblog.com/wp-
content/uploads/2017/03/15-1189...](http://www.scotusblog.com/wp-
content/uploads/2017/03/15-1189_amicus_resp_qualcomm.pdf)

------
optimiz3
Couldn't find the vote without teasing it out of the text -

It was an 8-0 decision, with a minor dissent from Ginsburg on what happens
when a product is sold in a foreign territory.

~~~
test6554
Where did they land on the foreign territory scenario? I only saw that the
lower courts thought foreign territories did not cause patent rights to
expire.

~~~
sbuttgereit
They said those rights were exhausted as well. That was the point on which
Ginsburg dissented; in my non-lawyerly paraphrasing it sounded as though she
saw foreign patent law as something that could not be exhausted on the same
grounds as domestic patent law (being foreign and all). I saw some citations
of trade-treaties and such (Bern Convention) in her dissent, but didn't go
farther. She joined on the the domestic point.

------
geofft
I'm a little surprised that Ginsburg dissented here, and also dissented from
_Kirtsaeng v. John Wiley_ : naively, she's "liberal", and (at least in my
bubble) being "liberal" is associated with wanting less strong IP protection.

But I see also that she wrote the majority opinion in _Eldred v. Ashcroft_ ,
saying that the 28-year extension to copyright terms was constitutional.

What's the right way to understand her legal thinking here? Is she known as an
IP maximalist? Or are there other principles she's using to reach these
conclusions? (I don't completely follow her logic that, because US patent law
doesn't provide any protection in other countries, US patent rights _are
preserved_ across a sale in some other country.)

~~~
schoen
Justice Ginsburg is definitely known as an IP maximalist.

Some people have wondered if she's been influenced by her daughter's views on
IP, since Jane Ginsburg (a colleague of Eben Moglen's at Columbia!) is one of
the most influential copyright law professors and has taken a maximalist view
in many copyright controversies.

[https://en.wikipedia.org/wiki/Jane_Ginsburg](https://en.wikipedia.org/wiki/Jane_Ginsburg)

> (at least in my bubble) being "liberal" is associated with wanting less
> strong IP protection

And that's also much less true in regions with major media industries, like
New York and Los Angeles.

~~~
ab5tract
I wish I could go back in time to ensure that Americans never started using
"liberal" to mean anything other than "one who advocates for liberalization of
trade and economics".

This is what it means in Europe. It took me a good long time after moving to
start hearing it with its international meaning, but now I find the
Americanized form absurd in its conflation.

In other words, liberals--in the international sense of the word--absolutely
100% endorse IP maximalization and indeed all forms of corporate ownership,
rent, and public infrastructure transfer.

------
jvandonsel
Could Lexmark argue that they're not really selling the cartridges to you, but
are instead leasing them for an indeterminate period of time?

~~~
desdiv
I don't think consumers will bother with anything that hassle-some:

Lexmark: "For $20 you can lease one of our fine cartridges for an
indeterminate period of time. Just need your signature on page 2, 5, and 6 of
this contract."

Canon, Panasonic, HP, Xerox: "You give me $20; I give you cartridge."

~~~
bluGill
The problem is the cartridge is a significant cost. If Lexmark gets the
cartridge back and refills it their costs are lower than their competition.
There is a reason HP sends a free shipping return label with all their
cartridges: it isn't about being green (though that is a nice bonus), it is
about recycling.

~~~
test6554
Maybe Lexmark could say, give us $140 per month and we will ship you a new
cartridge every month with a return label. For every cartridge you ship back,
you get a $20 credit on your monthly bill. Then adjust the amount of ink or
timing until it is just right for each company.

------
wordsarewind
As opined here the justification for the exhaustion of the patent after sale
is that the patent holder has in the sale been granted the price desired, fair
compensation, for the patented item, and thus cannot demand further use of the
patent with respect to the item. However, this desired price can only be set
by the patent holder in the monopoly granted through the patent in the US.
Therefore, this price cannot be set outside of the US where the patent holder
has no patent monopoly, and thus competition. Consequently, the patent holder
will not receive the desired price and remain uncompensated by the patent, and
thus may still require further use of it.

Surely the Supreme Court shouldn't disqualify the patent holder's right to
fair compensation for the invention in sales outside of the US?

------
SeanDav
I can't believe that the printer market has not been disrupted by someone
offering a decent printer without ridiculous ongoing printer cartridge costs.

I just bought a £99 printer that will cost more than £99 in printer cartridge
costs after just a few months of casual use and I did not spot any
alternatives.

~~~
ghaff
The alternative for most people is to buy a cheap laser printer. You don't
need color for most things and the operational costs are far lower.

To answer your question, though, the profits for fairly low margin printing
hardware business need to come from somewhere. Sure, you can cut the margins
on ink. Now you're paying $500 for the printer whether you use it heavily or
just now and then.

~~~
gech
Why can't they just accept lower margins

~~~
PeterisP
Why should they? After all, margins is the only reason why they're producing
printers at all; if the margins are bad then it would be better for them to
stop producing these products as they can get more profit manufacturing
something else.

------
CalChris
There's a certain obviousness to this decision. Indeed it's hard to read the
rest of the opinion after it explains what it is to exhaust patent rights in
the first paragraph. There's plenty of precedent, indeed when you're quoting
Coke, you're going back to the 17th century and his decision doesn't seem
different from the opinion.

This all begs the question how did this ham handed attempt to abuse patent
rights even end up in court and then how did it get appealed to the Supreme
Court and moreover why did the Supremes bother to hear it? Because it seems
obvious at least to this NL and obvious stuff usually isn't on their docket.

------
AdmiralAsshat
Outside of the narrow case involving printer cartridges, what other
implications and precedents can we expect this to set?

Can it stop smartphone makers from being able to blacklist devices that are
resold, for instance?

~~~
euyyn
> smartphone makers from being able to blacklist devices that are resold

What is that blacklist?

~~~
elipsey
Verizon denied my activation of used phones a couple of times due to a
blacklisted IMEI, so apparently they (at least used to) keep an internal
blacklist also.

~~~
twoodfin
Verizon owns their network, so I'd imagine they have pretty broad discretion
(FCC-willing) on restricting the specific devices they'd allow on it.
Blacklisting IMEI's seems like a pretty reasonable theft deterrent.

------
mmastrac
Wasn't apple using patents to stop modding of their magsafe cables?

~~~
djrogers
Not modding, but production of alternatives. Most (all?) products that were
magsafe compatible that actually made ti to market were hacked up magsafe
adapters.

------
rabboRubble
How does this case compare to Monsanto vs Bowman? If you recall, this case
pertained to a farmer that bought seeds from a local farmers association, then
applied Roundup guessing that some/all of the seeds were GMO. Monsanto argued
he violated their patent. Bowman argued that the GMO patent was exhausted
after the first sale. He lost.

This Lexmark case seems to undermine the Monsanto case. I don't understand
this inconsistency between the two cases.

Anybody able to clarify why these are different?

~~~
delecti
Because using the resulting soybeans as seeds constituted creating
unauthorized copies of a patented object.

~~~
rabboRubble
Thank you... I guess that makes some sort of sense. Now if Lexmark can modify
their printer cartridges to print and replicate themselves, Lexmark might
might find cover under the Bowman case!

I wish I could hand the SC justices 10 seeds each, with each 10 seed packet
comprised by 5 GMO seeds and 5 non-GMO seeds. If the justices could visually
sort the GMO and non-GMO seeds correctly, their ruling is actually
"followable". If the product in question appears on the surface to be a
natural object without patentability, extending patent protections to
something that is indistinguishable from a non-patented object and self
replicates seems incredibly academic.

~~~
ensignavenger
When you go to the store and buy anything, do you know what is patented and
what is not? Do you know every patent that covers every part of your phone? Do
you know what parts of any of these things you can copy? Patent Law is just
like that- 'academic' as you describe it, I suppose.

(I realize none of those things self-replicate like your seeds... but I think
my point still holds.)

~~~
rabboRubble
This article came up today and highlights quite nicely my unease about GM
plants a. [0][1] If I stretch a bit, also kind of explains my unease about
extending patent protections to plant life. The petunia flower with GM color
change _could_ be under patent protection. [2] Here we have a case of GM
petunias growing outside a lab and quite likely breeding. What are the patent
implications of patented plants going to seed? Does the landowner where the
plant grows owe somebody money? If I'm a landowner, how do I identify and
prevent patented plant life from growing on my property?

[0]
[https://news.ycombinator.com/item?id=14511660](https://news.ycombinator.com/item?id=14511660)

[1] [http://www.sciencemag.org/news/2017/05/how-transgenic-
petuni...](http://www.sciencemag.org/news/2017/05/how-transgenic-petunia-
carnage-2017-began)

[2]
[https://www.google.com/patents/CA2930494A1?cl=en](https://www.google.com/patents/CA2930494A1?cl=en)

------
test6554
So a company signs a contract for cheaper ink that requires them to return the
cartridges to Lexmark and only Lexmark.

Then companies willfully break the contract and send their cartridges to a 3rd
party. Lexmark sues the third party and courts throw out the suit.

Lexmark can either tighten enforcement and restrictions on their own customers
as well as sue them, or stop the program all together. I assume they will just
stop the program and only sell the more expensive new cartridges going
forward.

------
sova
An excellently subtle line of English text to say "yeah your friend can refill
your printer cartridges for you, without facing penalties of patent
infringement"

------
01572
Will companies now save more money on toner?

Is there anyone selling a reverse-engineered, refillable pod for the coffee
machines that only accept pre-filled proprietary ones?

Do these coffee _machine_ vendors seek to use patents to protect their sales
of _coffee_?

Edit: I know Keurig and Nespresso are the well-publicised examples, but I was
thinking of the others. I assume with reasonable confidence there are others
still using non-refillable proprietary pods.

~~~
vmarsy
> Do these coffee machine vendors seek to use patents to protect their sales
> of coffee?

A couple years ago this was a debate in France, Nespresso lost but it was
because of anti-competitive behavior[1]. There's apparently[2] plenty of 3rd
party nespresso pods : around 50 brands worldwide.

[1] [https://arstechnica.com/business/2014/04/nespresso-open-
sour...](https://arstechnica.com/business/2014/04/nespresso-open-sources-
coffee-pod-business-under-government-pressure/)

[2] [http://www.beveragedaily.com/Processing-Packaging/Coffee-
cap...](http://www.beveragedaily.com/Processing-Packaging/Coffee-capsule-
maker-sues-Nestle-Nespresso-for-150m)

------
post_break
Apple really pissed me off about this. Magsafe is not licensed. Buy Magsafe
bricks, cut the end off, and make a battery that can charge MacBooks? See you
in court.

[http://appleinsider.com/articles/10/11/01/hypermac_to_be_reb...](http://appleinsider.com/articles/10/11/01/hypermac_to_be_rebranded_hyperjuice_after_apple_legal_action)

~~~
PascLeRasc
Apple hasn't made a similar product in the seven years since this case. That's
ridiculous that they would discourage accessories for their product. That's
free R&D for them.

------
bhhaskin
This is a pretty big deal. It is great to finally start to see what patents
where supposed to be, which was to protect the inventor until they could
become established in the market. Not as a tool to stifle innovation. Very
interesting outcome.

------
pitaa
> Gorsuch, J., took no part in the consideration or decision of the case.

Does anyone know why this is?

~~~
snerbles
Justices typically recuse themselves from cases that pre-date their
nomination.

~~~
frandroid
But they could decide to jump in?

~~~
bluGill
Possibly, but why? He has to learn everything there is to know about being on
the supreme court (including things like where to park in DC), and all the
other work he is expected to do. All this to weigh in on a case that was 7-1
(and the 1 was a minor dissident), so his voice would mean nothing to the
result, and it would inflame the Democrats (in this case - if a Democrat did
the nomination the Republicans would be inflamed) who would look extra hard
for a reason to impeach him. If congress is close such a thing along might be
enough to impeach.

If this ever happens it will probably be a 4-4 decision where the other
justices - knowing they are tied - ask for a tie breaker. Expect there to be a
lot of publicity: they will want to make it clear to everything that
everything is being done right. This probably includes redoing the oral
hearings for the benefit of the new member.

------
baltimore
Does this mean that printer prices are about to go up since HP/Brother/Lexmark
will no longer be able to make as much money on the ink?

~~~
euyyn
The writing's on the wall for the whole business anyway.

~~~
tuwtuwtuw
Lexmark did attempt to move to new markets some years ago due to this. They
sold off their consumer/inkjet business and have been buying a bunch of
software companies. This attempt to "softpivot" failed miserably. Lexmark was
sold to a Chinese business some time ago. Now the software business is being
split up and sold.

------
conistonwater
Can somebody explain, what does the word ‘exhaust’ mean? It doesn't seem like
it's being used in the plain-English sense here.

~~~
evanb
It's the verb/adjective sense, as in "I ran a marathon and am exhausted."
rather than the noun sense, as in "The car's exhaust was unpleasant to
breathe." In the sense used, "exhaust" means "to use up" or "to reach the
limit" (in that you can go no further). The patent holder's patent rights are
exhausted at sale, or the patent holder exhausts their patent rights at sale.

~~~
geofft
(Note that "exhaust" in the noun sense is really the same meaning: it is fuel
that has been used up by combustion.)

------
EGreg
What's new precedent has been set by this decision? It seems it upholds an
existing doctrine.

------
limeyx
So now the companies will start selling "leases" to printer cartridges ?

------
guelo
This is another in a series of necessary smackdowns of the Federal Circuit.

------
Steko
Florian Mueller (yes, [1]) says this is very bad news for Qualcomm. He quotes
Roberts' decision:

 _" The problem with the Federal Circuit's logic is that the exhaustion
doctrine is not a presumption about the authority that comes along with a
sale; it is a limit on the scope of the patentee's rights. The Patent Act
gives patentees a limited exclusionary power, and exhaustion extinguishes that
power. A purchaser has the right to use, sell or import an item because those
are the rights that come along with ownership, not because it purchased
authority to engage in those practices from the patentee."_

Then recaps FTC v Qualcomm:

 _Presumably, some people in another Washington DC building are now reading
the Supreme Court decision: the lawyers working on the FTC 's case against
Qualcomm. The FTC argued in its January complaint, under a headline that
describes Qualcomm's "no license-no chips" policy as "anomalous among
component suppliers," that "when one of Qualcomm's competitors sells a
baseband processor to an OEM, the OEM can use or resell the processor without
obtaining a separate patent license from the competitor—just as a consumer
buying a smartphone does not have to obtain a separate patent license from the
seller of the smartphone." The FTC went on to explain that "Qualcomm is unique
in requiring an OEM, as a condition of sale, to secure a separate patent
license requiring royalty payments for handsets that use a competitor's
components." For example, this would apply to a situation in which a device
maker is a customer of Qualcomm and, say, Intel or Samsung's component
business._

And Apple v Qualcomm including relevance of overseas sales portion of today's
decision:

 _Count XXIII of Apple 's antitrust complaint against Qualcomm is a request
for judicial "declaration of unenforceability [of Qualcomm's patents in
certain contexts] due to exhaustion." Apple alleged in its January complaint
that "Qualcomm has sought, and continues to seek, separate patent license fees
from Apple's [contract manufacturers] for patents embodied in the chipsets
Qualcomm sells to Apple's CMs, a practice that is prohibited under the patent
exhaustion doctrine." ... Apple's complaint already anticipated that Qualcomm
would point to its corporate structure: "Qualcomm has attempted to evade the
patent exhaustion doctrine by selling baseband processor chipsets to Apple's
[contract manufacturers] through QTC, which is operated by QTI, which is in
turn a wholly owned subsidiary of Qualcomm." Apple then points to Qualcomm's
2012 restructuring, which I already blogged about back then with a focus on
open-source licensing issues. The Supreme Court's broad and inclusive approach
to exhaustion simply doesn't allow any kind of end-run around the exhaustion
doctrine through a first sale outside the United States as in one of the two
issues relevant in the Lexmark case._

[http://www.fosspatents.com/2017/05/supreme-court-rules-
again...](http://www.fosspatents.com/2017/05/supreme-court-rules-against-
lexmark-on.html)

[1] Yes it's FM but his analysis here seems better than it did 6+ years ago. I
don't remember him saying things like this in the oracle case: "The good news
is that the Supreme Court has once again overruled the Federal Circuit in a
way that strengthens those defending themselves against attempts to gain
excessive leverage and extract overcompensation from patents."

~~~
spacemanmatt
Once FM lost my trust (during the Oracle-Google suit reporting) it's just hard
to take him at face value again.

~~~
Steko
Perhaps, maybe his tune changes according to which side is paying him. Most of
the quotes above are not reliant on his analysis though and the relevance of
today's decision to Qualcomm's practices seems pretty clear.

