Lexmark not opposed to cartridge refills

Lexmark Australia boss Henrik Stensfeldt wants to alleviate any potential reseller concerns that the printer vendor is trying to stop third-party printer cartridge re-manufacturers, following a lawsuit filed by Lexmark against Static Control Components (SCC).

On February 28, the US district court in the eastern district of Kentucky issued a preliminary injunction in a case brought by Lexmark against SCC, a US-based company that produces chips and other components used in the production of re-manufactured toner cartridges. At the center of the case is SCC's Smartek microchip, which mimics a Lexmark chip that measures toner levels in Lexmark T520/522 andT620/622 laser printers and alerts the user when the supply is low.

Lexmark alleged the chip violates its copyright protection and the Digital Millenium Copyright Act claiming that the microchip contains copies of copyrighted Lexmark software and allows cartridges manufacturers to bypass Lexmark's technological controls and re-manufacture cartridges without authorisation.

The district court ordered SCC to cease making, selling or otherwise trafficking the chips until it reaches a decision. SCC claimed it had not violated copyright protection is merely engaged in reverse engineering.

In an interview with iTnews, Lexmark's Stensfeldt believed that as a result of the lawsuit, there may be a misconception that Lexmark is not environmentally friendly and is preventing SCC from making re-manufactured cartridges. “Firstly, we're protecting our intellectual property and we are focused on being environmentally friendly. Obviously [SCC] appears to want to represent a position of us constraining trade,” he said.

The cartridge re-manufacturing industry is worth around US$8 billion worldwide and remanufactured/refilled cartridges account for 27.5 percent of the printer cartridge market, according to Lyra International.

Another issue plaguing re-manufactured sales are quality issues that have surrounded re-manufactured cartridges. Lesser quality re-manufactured products which are represented in an incorrect way can place increasing pressure on margins in the channel, according to Stensfeldt.

Resellers can generally sell re-manufactured printer cartridges at roughly 30 percent discount versus new cartridges.

He said that there have been cases where Lexmark has successfully taken action against companies that have “misrepresented” cartridges as Lexmark re-manufactured cartridges when they are not. “We welcome the competitive [re-manufacturing] situation as long as we compete fairly. The customer needs to understand what they're buying,” he said.