The United States Supreme Court handed down a landmark decision on May 30 that ended a seven-year case between a small business and a large corporation, marking a significant victory for consumer rights.
The case between Impression Products and Lexmark International involved patents and was tricky from the start. Impression’s business foundation was the sale of reclaimed and refilled printer cartridges. This caused the printer-cartridge market to become more competitive and helped consumers to save money. Lexmark did not like being undersold on the cartridges and sued Impression and other similar companies, citing a little-known patent law. Impression was the only company that refused settlement and continued to pursue the case.
In its decision, the Supreme Court ruled that Lexmark’s patent rights ended at the point of sale both in the U.S. and overseas. Lexmark’s legal team had argued that the cartridges were protected under a “shrink-wrap license,” meaning that consumers received a discount for agreeing to never reuse or resell them after the wrapping had been opened. In the past, courts have generally agreed with this license as long as the company clearly stated the policy to consumers. Lexmark did not do that.
Another wrinkle in the case was international sales. Impression purchased used cartridges overseas, then sold them domestically. Lexmark argued that this was also a patent violation. While the court ruled in favor of Impression, Justice Ruth Ginsberg dissented on this point and said companies should keep their patent rights on goods sold overseas.
The outcome of the case reached far beyond printer cartridges. Tech manufacturers will no longer be required to secure multiple licenses to be compliant with the law. Pharmaceutical firms will be less satisfied because there is nothing stopping Americans from purchasing their medications from other countries where they are sold more cheaply.
The biggest victory in the Impression versus Lexmark case is for consumers. People can buy less expensive goods without worrying about patent-driven price increases anytime soon.