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Nearly four years after the original lawsuit was filed, the U.S. District Court for the Northern District of California on August 30 dismissed the Arizona Cartridge Remanufacturers Association's (ACRA) lawsuit against Lexmark and its printer cartridge return program, formerly known as Prebate.
In the original lawsuit filed in September 2002, ACRA alleged the Lexmark Cartridge Return Program violated California Business and Professions Code sections 17200 and 17500, which prohibit unfair and deceptive business practices and deceptive advertising. Lexmark's Cartridge Return Program provides customers with a discount in exchange for their agreement to return the used cartridges only to Lexmark for remanufacturing or recycling.
Judge Saundra Brown Armstrong ruled, "In light of the Court's ruling that the Prebate condition falls squarely within Lexmark's patent right, Lexmark has adequately shown that there is little if any evidence to support ACRA's contention that the Prebate program is misleading, deceptive or unfair under Sections 17200 and 17500.
"It's unfortunate that we didn't have enough financial support to put on a better offense. There were several important areas we couldn't pursue as we needed to," said an ACRA spokesperson.
"We were disappointed but you have to respect the court's decision," said Ron Katz, ACRA's attorney in the case. "The court seemed to feel there is a contractual agreement between Lexmark and the end user, although we know there are distributors in between."
The ruling concluded, "Because of its patents, Lexmark has the right to impose conditions on the sale of its patented product. It may restrict a purchaser's ability to repair it, which is what in essence the single-use condition does."
According to Katz, ACRA still can ask the district court to review the entire case or have the case heard at the U.S. Supreme Court level, two options he concedes as having a "low percentage" of success.
The ACRA spokesperson confirmed that the case has mostly likely concluded, and again cited the lack of financial resources as an obstacle.
Katz emphasized the court's ruling in ACRA v. Lexmark has no bearing on other pending litigation within the remanufacturing industry.
"The decision does not affect remanufacturers in terms of whether or not they can recycle printer cartridges with regards to chips," Katz said.
"The court has ruled in support of customer choice," said Vincent J. Cole, Lexmark vice president and general counsel, in a press statement released by Lexmark. "This is a victory for customers and their right to choose to receive a discount in exchange for a simple agreement to return the empty cartridge to Lexmark for remanufacturing or recycling. Lexmark's program is good for customers, good for the environment, and fair to the competition."
