StorageTek Attempts to Block Independent Service Vendors
StorageTek sells data storage hardware to large enterprise clients. It also sells maintenance services for its products. Custom Hardware is an independent business that repairs StorageTek hardware. In an effort to eliminate this competitor in the maintenance services market, StorageTek sued under the DMCA, arguing that Custom Hardware had circumvented certain passwords designed to block independent service providers from using maintenance software included in the StorageTek hardware systems. In other words, StorageTek was using the DMCA to ensure that its customers had only one place to turn for repair services.
A district court granted a preliminary injunction against Custom Hardware. More than a year later, a court of appeals vacated the injunction, holding that where there is no nexus with copyright infringement, there can be no DMCA claim. Although this was a victory for competition, it illustrates the ways in which the DMCA continues to be used to impede competition, rather than prevent piracy.71
Lexmark Sues Over Toner Cartridges
Lexmark, the second-largest laser printer maker in the U.S., has long tried to eliminate the secondary market in refilled laser toner cartridges. In January 2003, Lexmark employed the DMCA as a new weapon in its arsenal.
Lexmark had added authentication routines between its printers and cartridges explicitly to hinder aftermarket toner vendors. Static Control Components (SCC) reverse-engineered these measures and sold “Smartek” chips that enabled refilled cartridges to work in Lexmark printers. Lexmark then used the DMCA to obtain an injunction banning SCC from selling its chips to cartridge remanufacturers.
SCC ultimately succeeded in getting the injunction overturned on appeal, but only after 19 months of expensive litigation while its product was held off the market. The litigation sent a chilling message to those in the secondary market for Lexmark cartridges.72