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Court Denies Lexmark, Rules for SCC Again

January 21, 2005

For the second time in less than six weeks, a court has ruled in favor of Static Control Components in its ongoing legal battle with Lexmark.

On Dec. 3, 2004, Chief Judge Karl Forester of the U.S. District Court for the Eastern District of Kentucky denied Lexmark''s motion for a preliminary injunction banning Static Control from manufacturing redesigned microchips for Lexmark printers. The ruling comes 38 days after a 6th U.S. Circuit Court of Appeals vacated a previous preliminary injunction involving an earlier version of microchips.

Lexmark filed the most recent motion in April 2004 asking the court to enjoin SCC rom "making, selling, distributing, importing, marketing, [or] offering for sale" its redesigned microchips intended for use in Lexmark’s E220, E320/322, E321/323,T420, T520/522, T620/622 and T630/632 printers and their cartridges.

Lexmark argued that SCC's redesigned microchip violated the Digital Millennium Copyright Act (DMCA). Lexmark also claimed SCC''s marketing of the redesigned microchip induced the infringement of Lexmark''s patents by encouraging end users to violate their "Prebate agreements" with Lexmark.

“No other company''s chips have been tested in the courts the way SCC''s chips have,” said SCC General Counsel William London. “We remain confident that all the legal issues in this case will, ultimately, be resolved in our favor. Rest assured, we will continue to vigorously pursue this litigation against Lexmark on behalf of SCC and our customers.”

Judge Forester denied the motion without conducting a hearing on the issues and gave Lexmark the chance to refile the motion.

“Eventually, this case will go to the jury and we will see what they think,” London said.

The ruling is the second recent setback for Lexmark in its two ongoing legal battles with Static Control. On Oct. 26, 2004, a three-judge panel of the 6th U.S. Circuit Court of Appeals vacated the initial ruling issued by Judge Forester, who granted a preliminary injunction in February 2003 involving the original version of the microchips. Lexmark has since filed for the case to be reheard by the full 6th Court (en banc). To date, the court has not decided on the filing for en banc.