Shrinkwrap Licensing Applies to Patented Products

If you've ever bought computer software in a store, you've encountered the Shrinkwrap License. These were widely used prior to the popularization of downloading and the pervasive use of "Clickwrap" licenses. They're basically a marriage of contract law and copyright law. Most likely you understood, that by opening the product package, you were agreeing to the terms of the software manufacturer--usually that you were agreeing not to make multiple copies of the software.

The computer printer company, Lexmark, has recently tried to use the DMCA to prevent competitors from refilling toner cartridges for its laser printers. In Lexmark Int'l, Inc. v. Static Control Components, Inc., the 6th Circuit wisely held that Lexmark could not rely on the DMCA, or even copyright law to protect toner cartridges. The court held that the program controlling the toner was not an original work of authorship, and thus not entitled to copyright protection. Moreover, the authentication sequence that Lexmark tried to argue was the technological measure controlling access to a copyrighted work, was not covered by the DMCA because:


The authentication sequence, it is true, may well block one form of "access"—the "ability to . . . make use of" the Printer Engine Program by preventing the printer from functioning. But it does not block another relevant form of "access"—the "ability to [ ] obtain" a copy of the work or to "make use of" the literal elements of the program (its code). Because the statute refers to "control[ling] access to a work protected under this title," it does not naturally apply when the "work protected under this title" is otherwise accessible. Just as one would not say that a lock on the back door of a house "controls access" to a house whose front door does not contain a lock and just as one would not say that a lock on any door of a house "controls access" to the house after its purchaser receives the key to the lock, it does not make sense to say that this provision of the DMCA applies to otherwise-readily-accessible copyrighted works. Add to this the fact that the DMCA not only requires the technological measure to "control[] access" but also requires the measure to control that access "effectively," 17 U.S.C. § 1201(a)(2), and it seems clear that this provision does not naturally extend to a technological measure that restricts one form of access but leaves another route wide open.

Thank goodness. Think about it--was copyright law designed to protect toner cartridges? Get real.

Well, now Lexmark has exacted its revenge on those who would seek a cheaper alternative to their ink jet printer cartridges. This week, in ACRA, Inc. v. Lexmark Int'l, Inc., the 9th Circuit has held that shrinkwrap licenses are enforceable to protect patented goods. That is, by unwrapping your printer cartridge marked "Single Use Only" creates an enforceable contract in which you are agreeing not to refill it with someone else's ink. If you do, you are a patent infringer. What's more, because patent law recognizes an inducement theory of infringement (copyright law does too now, but that's a different story), Lexmark can now sue cartridge remanufacturers too.

As the EFF's Fred von Lohmann notes:

The consequences for consumers, innovators, and competition are potentially dire. Will patent owners exploit this decision as an opportunity to impose over-reaching restrictions on formerly permitted post-sale uses, repairs, modifications, and resale? Will consumers soon confront "single use only, not for resale" notices on more and more products? Will innovators stumble over labels announcing "modifications prohibited"? Only time will tell.