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Ruling on refilled printer cartridges touches DMCA

Defendant says powerhouse printer firm is invoking Digital Millennium Copyright Act to force consumers to buy its cartridges.

In a closely watched case involving the Digital Millennium Copyright Act, a federal court has ruled that a small North Carolina company can continue selling a chip that makes it possible to use refilled toner cartridges in Lexmark printers.

A federal appeals court overturned on Tuesday a preliminary injunction that barred Sanford, N.C.-based Static Control from selling its Smartek chip.

Static, which sells printer parts and other business supplies, has been defending a lawsuit brought by Lexmark, the No. 2 maker of printers in the United States. The suit claims the Smartek chip violates the DMCA, and Lexmark hopes the case will slam the brakes on the toner cartridge remanufacturing industry and compel consumers to buy its cartridges.

Ed Swartz, Static's CEO, said in a statement that the "courts have spoken--companies cannot abuse copyright laws to create electronic monopolies and take advantage of the citizens of this great country."

The case has gotten a lot of attention because it's one of the first to test the limits of the DMCA, which Congress enacted in 1998 to limit Internet piracy.

Under section 1201 of the DMCA, it is generally unlawful to circumvent technology that restricts access to a copyrighted work or sell a device that can do so.

In court documents, Lexmark has claimed the Smartek chip mimics a technology used by Lexmark chips and unlawfully tricks the printer into accepting an aftermarket cartridge. That "circumvents the technological measure that controls access" to Lexmark's software, the complaint said.

But Congress also included exemptions in the DMCA explicitly permitting activities such as law-enforcement activities, encryption research, security testing and interoperability.

Static Control has seized on the last exemption, which permits reverse-engineering "for the purpose of enabling interoperability of an independently created computer program with other programs" and says its creation of the Smartek chip is also protected by traditional fair use rights enshrined in U.S. copyright law.