Int’l ITC and SCC ask U.S. Copyright Office to Modify Law that Impacts Remanufacturers

Int’l Imaging Technology Council and Static Control Components ask U.S. Copyright Office to Modify Law that Impacts Remanufacturers

I-ITC’s Tricia Judge

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On October 27, The Int’l ITC (I-ITC) and Static Control Components (SCC) filed comments with the U.S. Copyright Office regarding the Digital Millennium Copyright Act, the law used by Lexmark against Static Control in litigation starting more than 16 years ago.

The joint comments addressed the incorrect use of the DMCA to lock-out competition, and suggested the adoption of a permanent exception for repair and reconditioning.  The comments were in response to questions and issues posed by the Copyright Office in the September 27.

“For more than 150 years, the right of businesses and consumers to repair equipment has been a central tenet of patent law. But since the passage of the DMCA, the imaging products repair industry has been shrouded in a ‘cloud of uncertainty [that] discourages perfectly reasonable and legal activity’,” the comments state. “Companies that repair products controlled by functional software, such as printers and printer cartridges, garage door openers, and auto parts, have battled original equipment manufacturers to re-establish their right of repair under the laws of patent exhaustion, copyright exhaustion, and DMCA Section 1201.”

Static Control defeated Lexmark’s efforts to use the DMCA against it in 2003, but the law remains a threat to tall remanufacturers.  “If the DMCA law remains as-is, someday it could come back to haunt the aftermarket,,” said Skip London, Vice President and General Counsel for SCC.  “The DMCA was never intended to prevent interoperability between toner printer cartridges and printers.  The DMCA should be clarified by granting the exemptions we propose.”

“Static Control was the first in the imaging industry to face litigation under the DMCA, and successfully defended against one of the most notorious attempts to use Section 1201 against aftermarket competition,” the comments state.

“Despite these victories, printer manufacturers continue to apply technological measures designed to shut out aftermarket competition. These companies need to be able to repair products and ensure that they interoperate with other devices, without fear of being hauled into court.”

“Laws such as the DMCA, the Trans Pacific Partnership and many others must be constantly monitored to assure that they don’t inadvertently give the OEMs back intellectual property protection that the courts have justly taken away,” said Tricia Judge, Executive Director of the I-ITC.  “That’s why the I-ITC exists, and why we work with industry-driven companies like SCC to keep the laws consistent and our industry free to compete.”

“Companies should not be able to use the DMCA to restrict interoperability or competition, as they are necessary and lawful components for advancement and innovation of intellectual property,” the comment read.  “Toward that end, I-ITC and Static Control request that the Copyright Office adopt a permanent exemption for circumvention for the purpose of repair, and advocate legislative action to protect lawful repair against these types of claims under Section 1201(a) and (b).”

I-ITC and SCC suggested the following text for the permanent exemption:

“Computer programs, as defined in 17 U.S.C. § 101, that control access to or operation of a physical machine or device, including a component or part thereof, where the circumvention is undertaken to effectuate repair, customization, or replacement of the functional operations of such machine or device.”

“Congress intended the DMCA to protect Internet e-commerce and distribution of new digital media, such as movies, music, and applications.  It was never meant to prevent businesses from repairing consumer products,” said Seth Greenstein, attorney for SCC.  “Failing to grant the exemption to the DMCA as described by I-ITC and SCC would directly affect over 500,000 people employed in remanufacturing.  Including their customers, the total number of people affected would easily bring that number to many millions.”

The cost of not allowing these exemptions could run in the billions per year as all manufacturers could monopolize their consumables and repair parts businesses.  The very concept of a free American market and the rights granted to a purchaser would be destroyed.  The right of ownership and the right to repair and rebuild products hang in the balance of whether or not these exemptions are granted.

“Simple code in a computer chip that prevents competition should not be sanctioned as acceptable antitrust behavior and it is by no means intellectual property that merits protection under copyright law,” Judge said. “Lexmark’s use of the DMCA was inappropriate and had no relationship to the intent of the DMCA.  Other OEMs could follow suit if we don’t secure that exemption.”

Static Control began in 1987 and is headquartered in Sanford, North Carolina. Static Control employs approximately 800 workers and manufactures and sells printer components and supplies, including microchips that it sells to third-party companies for use in the repair and remanufacture of toner and inkjet cartridges. Static Control also, regrettably, has extensive experience in complex litigation entailing Section 1201 anti-circumvention and reverse engineering, as well as patent, copyright, contract, antitrust, and Lanham Act false advertising issues. For more information, see www.scc-inc.com.

International Imaging Technology Council represents the interests of the imaging supplies industry, including office-machine retail and repair, office-supply retail, computer retail, repair and networking companies, and all related industry suppliers. An estimated 2,000 domestic businesses employ some 50,000 people in the United States to recondition and repair office imaging supplies.  For more information, see www.i-itc.org.

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