Static Control Components filed an antitrust lawsuit against Lexmark on Feb. 28, in Federal Court in North Carolina. Lexmark is alleged to have committed various "bad acts, which we believe result in damages in excess of $100 million," Ed Swartz of Static Control said in a statement.
This antitrust suit follows the preliminary injunction awarded to Lexmark last week in its lawsuit against Static Control over the T520/620 chips.
The lawsuit alleges that Lexmark violated state and federal laws, including the Sherman Act (which is the federal antitrust legislation), the Lanham Act (which contains deceptive advertising provisions) and North Carolina's Unfair and Deceptive Trade Practice statute.
Skip London of Static Control said in a statement that Lexmark "has unlawfully attempted to monopolize and has monopolized the market for cartridges that go into its printers, remanufactured cartridges that go into its printers, and components for cartridges that go into Lexmark-branded printers."
In addition, Static alleged Lexmark made "numerous misrepresentations concerning its products," including "unfair and deceptive trade practices." In a press conference, London specifically referred to issues regarding the Prebate program, including the way Prebate has been presented to consumers and remanufacturers, and representations made by Lexmark employees placing printers and cartridges in the field.
The complaint said, "All of this anticompetitive conduct has injured competition and consumers in the United States and foreign countries by reducing output, excluding competitors, and raising prices." Static's complaint alleges that this injury resulted in damages "in excess of $18 million" for violations of the Sherman Act, not less than $75,000 for Lanham Act violations, and an amount in excess of $75,000 plus interest for violations of North Carolina law, as well as punitive damages and repayment of legal fees. Under the Sherman Act, certain recovered amounts may be tripled.
London said in a statement, "Lexmark has previously admitted its intent to control what cartridges can go into Lexmark branded printers without regard to the preference of the owner of that printer."
Swartz said, "After looking at all the facts, I am confident that we will prevail."
The Static lawsuit against Lexmark contains elements that are similar to the suit filed by ACRA in California's Superior Court in September 2001. Both cases allege unfair and deceptive trade practices. The ACRA case, which is in the discovery period with a trial date in October 2003, alleges that Lexmark has engaged in deceptive advertising, unfair competition and conspiracy, and specifically targets the Prebate program. Unlike the recent Static filing, ACRA's suit does not directly allege violations of the Sherman Act or Lanham Act. According to the initial complaint, ACRA's lawsuit is based on alleged violations of the California Business and Professions Code and the California Public Contract Code.
Static Control has issued a statement about the antitrust suit, available on its Web site.
For more information on antitrust legislation, see the Recharger Magazine series "The Topsy-Turvy World of Antitrust Law" by Eliot Disner.
