Last week OSHWA joined our friends at Public Knowledge, EFF, the Digital Right to Repair Coalition, and Public Citizen in telling the US Court of Appeals for the Federal Circuit that ownership matters. Why is ownership so important? Because owning something means that you have the right to fix it or change it or integrate it into something else without first asking permission from the original manufacturer. A manufacturer of an object shouldn’t use patent law to get a perpetual veto over how you use that object.
The case involves Lexmark (the 2d printer company). Over the years, Lexmark has tried to use pretty much every legal trick it could think of to lock down its printers and prevent people from using non-Lexmark toner. Having worked through all of its other options, in this case Lexmark turned to patent law.
Patents give patent owners a lot of control over objects. However, that control largely disappears when the owner decides to sell an object. My phone is chock full of patents that allow the manufacturer to prevent someone else from making one without permission. However, once I buy my phone, I can do pretty much whatever I want with it – paint it green, use it as a coaster, or sell it to the phone manufacturer’s ex that they hate. This limit to patent control is called “patent exhaustion.” Essentially, once you sell an object protected by patent, you have “exhausted” your patent control over it.
Lexmark is looking for a loophole to patent exhaustion. They argue that patent exhaustion only applies if the object was sold in the US. If the object was originally sold overseas, Lexmark argues, patent exhaustion should not apply. If this argument sounds vaguely familiar, the US Supreme Court heard a very similar case relating to copyright a few years ago. In that case, a student was buying official copies of textbooks in Thailand (at low Thai prices) and reselling them in California (at higher – but still lower than the publisher was charging – US prices). The Supreme Court rejected a foreign sale loophole for copyright protected books, and now we are urging the Federal Circuit to reject a foreign sale loophole for patent protected printer toner.
In addition to undermining the concept of ownership, allowing such a loophole would undermine confidence in the market. Imagine if you needed to research the supply chain history of everything you buy. Two identical objects on a shelf could be treated very differently by the law depending on where they happened to be originally sold by the manufacturer. How are you supposed to know which one you really get to own and which one is still under control of the original patent owner? That’s a research burden that serves no purpose.
Charles at Public Knowledge and Vera at EFF have good summaries of what is going on in this case. We at OSHWA are proud to be able to contribute to this effort and look forward to updating you as it develops.