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Wealth of Ideas, September 2005
Most of the time, the way you agree to a legal document
is by signing it - but not always. Sometimes you agree
to it by tearing it apart.
That's the way a "shrink-wrap" license works
- you know, the document with all the fine-print legalese
that comes packaged with your new software CD. The fine
print states everything that you agree to as the buyer
(basically, limiting your use of the software to a certain
number of users, computers and/or users), and that your
breaking of the shrink-wrapped seal shall be deemed
an acceptance of the license.
When software became available for download via the
internet, the license became known as a "click-wrap"
license - meaning the terms of the license agreement
are displayed and you have to click a button that says
"I Agree" in order to download the software.
And now we have the "box-wrap" license, thanks
to a recent ruling from the 9th Circuit Court of Appeals
in the case of Lexmark International against the Arizona
Cartridge Remanufacturers Association (ACRA). ACRA had
brought suit to challenge the legality and fairness
of Lexmark's imposition of conditions on the sale of
its "Prebate" ink cartridges, namely, the
condition that the buyer send the cartridge back to
Lexmark when empty instead of sending it to a third-party
remanufacturer for refilling.
The court, however, found "that as a matter of
law Lexmark's Prebate is not a deceptive practice"
and that "because of its patents, Lexmark has the
right to impose conditions on the sale of its patented
product." Furthermore, the court quoted California
law as saying that "a contract for sale of goods
may be made in any manner sufficient to show agreement,
including conduct by both parties which recognizes the
existence of such a contract." Such conduct, in
this case as well as in the case of shrink-wrapped software,
includes stopping to read the fine print as you tear
open the packaging of your next printer cartridge.
The ruling caused a stir among those bloggers and other
critics of patent law who don't think much of patent
law anyway, but is Lexmark's Prebate license really
so unfair? Atlantic Exchange, a reseller of Lexmark
products, notes on its website that "if you choose
Prebate, in exchange for the up-front discount, we ask
that you use the cartridge one time and return the empty
cartridge to Lexmark for remanufacturing and recycling.
You don't have to choose Prebate products if you want
other recycling options." They also mention that
there are higher-priced, non-Prebate cartridges available
from Lexmark that may be remanufactured by a third party.
So Lexmark isn't overstepping its patent rights this
time…but the war will go on, as long as patent-holders
and critics of the patent system continue to meet in
courtrooms and chatrooms.
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