Lexmark International, Inc. v. Static Control Components, Inc.
72 U.S.P.Q. 2d (BNA) 1839, 2004 U.S. App. LEXIS 22250, 387 F.3d 522 (2004)
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Rule of Law:
Copyright protection does not extend to functional elements of a computer program that are dictated by external compatibility requirements, nor does the DMCA's anti-circumvention provision apply to technological measures that control "use" but not "access" to copyrighted code when the code is otherwise readily available.
Facts:
- Lexmark International (Lexmark) manufactures laser and inkjet printers and sells two types of toner cartridges: "Prebate" (discounted, single-use, return-to-Lexmark) and "Non-Prebate" (full price, reusable).
- Lexmark Prebate cartridges contain a microchip with an "authentication sequence" that performs a "secret handshake" with the Lexmark printer to ensure only authorized cartridges function.
- Lexmark printers also contain a "Printer Engine Program" (PEP) that controls basic printer functions and downloads a "Toner Loading Program" (TLP) from the cartridge chip to measure toner levels.
- The TLP is a very small program (37-55 bytes) located on the toner cartridge microchip, using eight basic commands and mathematical equations to approximate toner level.
- After the authentication sequence, the printer performs a "checksum operation" on the downloaded TLP; if any byte of the TLP is altered, the printer will not function unless the checksum value is also correctly updated.
- Static Control Components (SCC) manufactures and sells its "SMARTER" microchips to third-party remanufacturers for use in refurbished Prebate cartridges.
- SCC's SMARTER chips enable interoperability by satisfying Lexmark's authentication sequence and contain an identical, "slavishly copied" version of Lexmark's TLP.
Procedural Posture:
- On December 30, 2002, Lexmark filed a complaint in the United States District Court for the Eastern District of Kentucky, seeking a preliminary and permanent injunction against SCC for distributing SMARTER chips.
- Lexmark's complaint alleged three theories of liability: copyright infringement of the Toner Loading Program, DMCA violation for circumventing access controls on the Toner Loading Program, and DMCA violation for circumventing access controls on the Printer Engine Program.
- After an evidentiary hearing, the district court found Lexmark had shown a likelihood of success on each claim and entered a preliminary injunction against SCC.
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Issue:
Does a microchip that copies a short, functional computer program to enable a third-party toner cartridge to operate with a printer infringe copyright, or violate the DMCA's anti-circumvention provisions, when the program's content is dictated by compatibility requirements and the printer's copyrighted "engine" program is otherwise readily accessible?
Opinions:
Majority - Sutton, J.
No, a microchip that copies a short, functional computer program for compatibility purposes does not infringe copyright, nor does it violate the DMCA's anti-circumvention provisions under these circumstances. The court vacated the preliminary injunction, finding Lexmark did not demonstrate a likelihood of success on any of its claims. The district court erred in determining the Toner Loading Program (TLP) was copyrightable. Originality requires "independent creation plus a modicum of creativity," but copyright protection does not extend to ideas, processes, or methods of operation (17 U.S.C. § 102(b)). The doctrines of merger and scenes á faire apply, precluding protection where expression is essential to the idea or dictated by external factors like functionality, compatibility, and efficiency. The TLP functions as a "lock-out code" because its bytes serve as input to a checksum operation, and any alteration would prevent the printer from functioning. Dr. Goldberg's unchallenged testimony indicated it would be "computationally impossible" to modify the checksum value without contextual information. Therefore, pure compatibility requirements justified SCC's copying of the TLP. Lexmark's arguments about alternative ways to write the program or the "LXK" symbol within the code were unavailing; alternatives were either different ideas, too trivial, or still subject to the checksum constraint. The DMCA's anti-circumvention provision (§ 1201(a)(2)) prohibits devices that circumvent a technological measure that "effectively controls access to a work protected under this title." The authentication sequence does not "control access" to the Printer Engine Program (PEP) because anyone who buys a Lexmark printer can read the PEP's literal code directly from the printer memory. The sequence may block "use" (preventing the printer from functioning) but not "access" to the code itself. Congress intended the DMCA to prevent piracy of works where encryption prevents all access to the copyrighted material, not to create monopolies on consumer goods or replacement parts by restricting functional "use." Since Lexmark did not protect access to the literal code of the PEP, the DMCA does not apply. The SCC chip replaces, rather than provides "access" to, the TLP. Furthermore, the DMCA only protects "works protected under this title" (copyright statute). Since the TLP is likely not copyrightable, the DMCA would not protect it. The court also noted SCC's interoperability defense (§ 1201(f)(3)) likely applies, as SCC presented evidence of independently created programs on its chip, and copying the TLP was "necessary" for interoperability given the checksum requirement.
Concurring - Merritt, J.
Yes, the preliminary injunction should be vacated, and the DMCA should not be broadly interpreted to create monopolies over manufactured goods. Agrees with the majority on TLP non-copyrightability due to merger/scenes á faire, and potential fair use. Agrees on PEP DMCA claim failure due to authentication sequence not controlling access to the program itself. Emphasizes that the DMCA's anti-trafficking provision (§ 1201(a)(2)(A)) requires proof of "purpose" to circumvent for pirating copyrighted works, not merely to make compatible replacement parts. Allowing manufacturers to use DMCA to create monopolies over replacement parts by "tweaking facts" (e.g., more complex lock-out codes) would stifle innovation and competition, contrary to the Copyright Clause's purpose ("promote the Progress of Science and useful Arts"). Suggests that plaintiffs should bear the burden of showing a "purpose to pirate" before defendants need to invoke reverse engineering exceptions. SCC's purpose was solely to make its cartridges work, not to pirate Lexmark's programs.
Concurring-in-part-and-dissenting-in-part - Feikens, D.J.
Concurs with vacating the preliminary injunction, agreeing that Lexmark failed to show a likelihood of success on the DMCA claim regarding the Printer Engine Program. Dissents on the TLP copyrightability and the DMCA claim regarding the TLP. Believes the record could support a finding of sufficient original expression in the TLP. Disputes the majority's conclusion that alternatives (like lookup tables or reordering equations) are "different ideas" or "too trivial," arguing they are different expressions of the same idea (monitoring toner levels) and could be practically feasible. Also finds the record mixed on whether the TLP functions as a strict "lock-out code," suggesting it might be possible to "turn off" the checksum sequence with less effort than finding a new checksum value. Advocates for a remand to determine these factual questions. Agrees the district court misapplied merger and scenes á faire doctrines but would apply them differently, arguing that merger with a "method of operation" should act only as a defense to infringement, not a bar to copyrightability. This would preserve the TLP's copyrightability, allowing potential DMCA protection. Disagrees with the majority's application of the "purpose and character of use" factor in fair use, arguing SCC intended to profit from an exact copy of Lexmark's chip, which happened to contain the TLP, and this shouldn't weigh in favor of fair use simply because SCC was unaware of the TLP's specific commercial value. Believes the TLP's value is reflected in the market for toner cartridges, and that the copied TLP increased the value of SCC's cartridge by enabling accurate toner reporting. Even if the TLP is copyrightable, the DMCA's anti-circumvention provisions require scienter – that the device was "primarily designed or produced for the purpose of circumventing" a measure. The record shows SCC primarily designed its chip to circumvent PEP protections, not TLP protections, and was unaware of the TLP's presence. Thus, Lexmark failed to show the requisite purpose for the TLP DMCA claim. Concurs with the majority that consumers have an implied license to use the Printer Engine Program for the life of the printer upon purchase. Therefore, circumvention of the authentication sequence for the PEP does not grant "unauthorized access" as required by the DMCA, aligning with legislative history that the DMCA targets piracy and devices without substantial non-infringing uses.
Analysis:
This case significantly narrows the scope of copyright protection for highly functional computer code and clarifies the application of the DMCA's anti-circumvention provisions. It reinforces the idea-expression dichotomy, particularly how merger and scenes á faire doctrines can render functional code uncopyrightable when external constraints dictate its form, even if alternative theoretical expressions exist. For the DMCA, the ruling distinguishes between controlling "use" and "access" to copyrighted material, emphasizing that the anti-circumvention measures must protect access to the code itself, not merely its functionality within a product. This interpretation prevents copyright holders from using the DMCA to create de facto monopolies on replacement parts for consumer goods and promotes competition in secondary markets.
