Better still, the court examined the issue of whether a license for "single use only" was a defense against subsequent remanufacturing. The court held that the license was a contract and subject to the same requirements as all contracts, especially a meeting of the minds of buyer and seller.
"These package instructions are not in the form of a contractual agreement by the purchaser to limit reuse of the cameras. There was no showing of a ‘meeting of the minds’ whereby the purchaser, and those obtaining the purchaser’s discarded camera, may be deemed to have breached a contract or violated a license limited to a single use of the camera," the decision states.
Therefore if a buyer purchases without expressly agreeing to the contract, then acceptable repair is permissible. The court also reinforced the precedent established in Hewlett-Packard Co. v. Repeat-O-Type, which held that ink jet cartridge refilling is permissible despite language on the cartridges that stated that they were designed to be non-refillable.
By applying the legal requirements of basic contract law to "single-use" license provisions, the court is placing the burden of proving that the buyer understood those contract provisions on the seller. Under the Prebate program, Lexmark would have to prove that its customers fully understood the license terms and agreed to them at the time of purchase.
That will be pretty tough to do in a simple transaction, such as a retail purchase by an end-user from Office Depot. It gets even more difficult when the purchaser and the end-user are different people. And license agreement enforcement will be even more complicated when the sales transaction was executed via phone, Internet, or through third-party distributors. How can one be certain that each person conveyed the terms of the agreement and that each recipient accepted them?
And, of course, the subsequent acquisition by a remanufacturer of the "discarded" cartridge further exacerbates the OEM’s problem. The contract is with the customer, not the remanufacturer, and proving that the customer transferred the cartridge to the remanufacturer with the contractual conditions expressly shared between them is improbable and absurd.
Thanks to Static Control’s Skip London and GRC’s Bob Daggs for sharing important information on this decision with me. -- Tricia Judge
