AutoCare Insider Volume 105 - 11

GOVERNMENT
AFFAIRS

AUTO CARE WEIGHS IN ON
SUPREME COURT CASE OVER
COMPETITION CONCERNS
WHAT do printers have to do with
aftermarket parts and competition?
Perhaps more than you think.
The Supreme Court is deciding
a case, Impression Products, Inc.
v. Lexmark International, Inc., that
could determine whether consumers
who purchase a vehicle have the
right to use non-OEM parts for the
repair of that vehicle. Specifically,
the Impression case tests the legal
precedent of patent exhaustion,
which states that a company's right
to protect its patent ends when the
product is sold to the end user.
Here is the background: Lexmark
International, Inc. (Lexmark) is the
producer of printers, and Impression
Products, Inc. (Impression) buys and
refurbishes Lexmark toner cartridges
and resells them in the aftermarket.
However, Lexmark sells its toner
cartridges with a restriction that
prohibits purchasers from reusing them
or providing them to anyone other than

Lexmark. Impression is claiming that
the restriction imposed by Lexmark
runs counter to the precedent of patent
exhaustion which has been in place
for hundreds of years. Surprisingly,
the Federal Circuit determined patent
holders can retain rights after sales
as long as the restrictions on use
are clearly communicated. Thus, the
Federal Circuit bypassed the patent
exhaustion by permitting what is called
the conditional sale doctrine. If the
Federal Circuit decision is upheld, this
decision would mean that the patent
exhaustion doctrine does not preclude
the patent owner, or OEM in this case,
from exercising its rights to exclude
resale or reuse of a product, as long as
the terms were clearly spelled out. In
other words, OEMs could restrict the
use of aftermarket or remanufactured
parts on their cars claiming that such
use would infringe on their patents.
In a brief submitted to the
Supreme Court on the case, the

Auto Care Association stated that,
"Impression Products effectively
outlaws commonplace activities,
such as repair and customization of
elements of a personal computer,
an automobile or any products with
consumable or repairable parts, unless
performed by or under license from the
patentee. Consumers and aftermarket
competitors targeted by these post-sale
restrictions may not know whether the
restriction exists or, even if embossed
on the device itself, whether the
restriction is valid or enforceable. Yet,
under Impression Products, these
consumers and aftermarket competitors
could be sued and potentially held
liable for patent infringement."
The court received oral arguments
in this case on March 21 and will
hopefully issue a decision before
the end of the session in June. A
copy of the Auto Care Association
brief can be found at www.autocare.
org/ImpressionProductsCase.

AUTO CARE INSIDER |

VOL. 105

11
http://www.autocare.org/ImpressionProductsCase http://www.autocare.org/ImpressionProductsCase
Table of Contents for the Digital Edition of AutoCare Insider Volume 105
