Your Purchasing Power may be in Peril.
When was the last time you purchased a used car?
Did it have improvements, such as custom wheels, a new stereo, or maybe some performance parts that increased horsepower?
How about an aftermarket computer, designed for more speed and memory than a stock model? Or maybe your company found a way to save money by getting printer ink cartridges refilled instead of buying new ones.
After all, recycling bits of plastic and electronics are good for the environment, and if it frees up more capital to operate the business, that’s a win-win. Right?
These are normal, everyday issues that faced extinction recently, debated at the highest levels of our democracy: The Supreme Court.
Patent laws are essential for corporations and individuals to profit from original ideas and inventions, but they can also be used as a tool to eradicate competition. If a corporation decides to try and weaponize patent law, it can create dangerous precedence for multiple industries, like used car dealerships.
The recent case set before the Supreme Court was between Impression Products, a company that refills empty printer cartridges, and Lexmark, a major company that manufactures and sells a variety of printers and ink and toner cartridges.
Lexmark’s machines rely on perishable resources to work, so while a machine may only cost one hundred dollars, the company will make five to ten times that amount in ink and toner cartridge sales.
This business model has been threatened by a new industry, where companies like Impression Products will buy up old ink cartridges, refill them, and sell them back to you for a fraction of the cost of a new Lexmark cartridge.
Sounds familiar, right?
The used car market operates in a very similar manner. And this area is where patent law can become weaponized.
Lexmark has argued that by refilling and reselling a patented Lexmark product without permission, Impression Products violated Lexmark’s patent and breached their customer service agreement. Their basic reasoning was: Lexmark’s patents should extend beyond the initial sale of a cartridge into infinity, which would make Impression Products’ business model illegal.
The big issue here has the potential to influence the resale of any used product in the United States, impacting your purchasing power.
How much can a manufacturer control what you do with or how you modify the things you purchase?
This affects a growing purchasing power problem that experts are calling, ‘The Right To Tinker.’
If you buy a car, you should be able to change the wheel and tires, put a DVD infotainment system into the dash, or port the heads to gain an extra forty horsepower, right?
Let’s say you purchase a brand-new cell phone just to film a stress test to see how much pressure it can withstand before it breaks, then upload the video to your YouTube channel. Do you have the right to destroy something you purchased outright?
These are the bigger questions that the Supreme Court faced during this case. If one verdict answers these questions, it can set precedence for tens of thousands of similar lawsuits for decades that could affect the bottom line of your overall purchasing power and ownership freedoms.
Lexmark’s case stated that the modification and resale of their patented product undermines the business and their property under patent and copyright protections.
Luckily, the Supreme Court saw things a different way.
They sided with Impression Products, stating that companies like theirs can only be sued for patent infringement in the places they actually conduct business. Supreme Court Chief Justice John Roberts used a perfect analogy to underscore this decision:
“Take a shop that restores and sells used cars. The business works because the shop can rest assured that, so long as those bringing in the cars own them, the shop is free to repair and resell those vehicles. That smooth flow of commerce would sputter if companies that make the thousands of parts that go into a vehicle could keep their patent rights after the first sale.”
Our country is full of business where consumers purchase things from companies, companies buy things from consumers, and people barter with each other.
When we, as consumers, purchase a product, we assume that we own it outright and may do with that product whatever we choose, so long as it is legal to do so. You can modify your car, sell it, or crash-test-dummy destroy it and sell the scrap metal. The point is, you paid for it, you own it. Anything less is a lease that dimishes your purchasing power.
And if we can improve both the planet and our wallets by simultaneously recycling a product and putting a little cash in our pocket, I’d say that’s a win-win.
Luckily for you and me, so does The Supreme Court.
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