Blue Trading Sues Lexmark, Seeks Declaratory Judgment on First Sale Issue

Cartridge core broker Blue Trading filed a complaint against Lexmark seeking a declaratory judgment of non-infringement. According to Actionable Intelligence, “To identify the ‘John Doe’ infringers it plans to add to its patent-infringement suit before the U.S. District Court for the Southern of Ohio, Lexmark has subpoenaed numerous empties brokers and remanufacturers, seeking details on their trade in Lexmark cartridges along with information on suppliers and customers. The OEM is looking to identify companies that have remanufactured and sold empty cartridges first sold outside the United States, which constitutes patent infringement under current U.S. patent law.”

Lexmark served a subpoena upon Blue Trading on July 13, 2012. Blue Trading states Lexmark’s attorneys warned that if Blue Trading did not settle and provide additional documents it would be named as a defendant in the Ohio suit.

Blue Trading alleges that Lexmark’s patent rights have been “exhausted by Lexmark’s authorized first sale whether said first sale occurred domestically or internationally.” Hence, its sales of spent cartridges both domestically and internationally doesn’t constitute patent infringement.

Blue Trading expects to put an end to Lexmark’s heavy-handed legal tactics. It states, “Lexmark seeks to benefit endlessly from its patent rights despite Lexmark’s authorized first sale of the cartridges. Lexmark will not cease its allegations of patent infringement and claims for damages without judicial action.”

In filing for declaratory judgment, Blue Trading is pursuing a path suggested by patent attorney Edward F. O’Connor, Esq. If the judge rules in favor of Blue Trading, then the Jazz Photo case ruling of patent exhaustion upon first sale in the United States will now extend to first sale in any country. This will have a favorable impact on the entire cartridge reman industry.