Lexmark has been hit with an anti-trust lawsuit filed by Static Control Components (SCC), a company the former won an injunction against last week.
SCC says it's fighting for the survival of low-cost, remanufactured printer cartridges. It has accused Lexmark of attempting to monopolize the printer market.
The action comes after Lexmark filed a lawsuit against Static last December for illegally copying its printer computer technology - the computer chips that have become an integral part of toner cartridges.
The US courts last week issued a preliminary injunction in favour of Lexmark barring SCC from making chips used in replacement cartridges for two of its laser printers.
Judge Karl Forester's ruling also provided guidance on what SCC could and couldn't do in producing compatible cartridges: "We anticipate that we will be able to come up with a chip in a very short period of time that doesn't go against the judge's ruling," said SCC's general counsel.
In its antitrust case SCC alleges that Lexmark's anticompetitive practices are squeezing out companies that remanufacture toner cartridge. In its lawsuit, it argues that approximately 35 per cent of HP toner cartridges are remanufactured, compared with about 14 per cent for Lexmark. Static blames that disparity on Lexmark's anticompetitive practices.
The cartridges in dispute are sold by Lexmark with an offer that gives the user a discount if the buyer agrees not to turn the cartridge over to a remanufacturer. Lexmark said the company offers users the option of buying without an upfront discount if they choose not to return the cartridges to Lexmark. Those cartridges can be remanufactured.
But SCC officials have called the "prebate" program a "sham" and said end users will always buy the lower-priced discounted cartridge that can't be remanufactured.
The case has potentially broad implications. Lexmark's December 30 lawsuit against SCC charges the company with violating the Digital Millennium Copyright Act (DMCA), the controversial 1998 law established to prevent piracy. The law was aimed at music and motion pictures, but critics have said Lexmark's use of it illustrates a broader problem.
Under the DMCA, it's conceivable, for instance, that a hardware maker could prevent interoperability with other systems by citing the law's anticircumvention provisions. By putting software controls on, for instance, auto parts, OEMs can use the law to stop remanufacturing of parts in that industry.