Lexmark International, Inc. v. Static Control Components: Enjoining Proper Usage of the Digital Millennium Copyright Act’s Anti-circumvention Provisions

• Publication year: 2003

Natalie Bajalcaliev⁰

I. Introduction

Since the adoption of the Digital Millennium Copyright Act¹ ("DMCA") in 1998, the courts have failed to fully define the scope of which copyrighted works are protected by the anti-circumvention provisions.² Courts have struggled to define this scope because Congress promulgated the DMCA in the context of promoting commerce over the Internet.³ Congress, however, drafted the DMCA anti-circumvention provisions with such broad and arguably unambiguous language⁴ that courts have been hard-pressed to limit the application of the provisions to Internet commerce.⁵ Yet, not until Lexmark International, Inc. v. Static Control Components⁶ had a court interpreted the scope of the anti-circumvention provisions as broad enough to protect purely functional, not independently marketed, copyrighted works.⁷

This Recent Development uses Lexmark as a case study and comes to the conclusion that although the anti-circumvention provisions seem to apply to the Lexmark facts courts should not allow plaintiffs to use the anti-circumvention provisions to protect purely functional and not independently marketed copyrighted works because doing so leads to outcomes that are contrary to public policy.

This Recent Development first examines the history of the creation of the DMCA and the DMCA's anti-circumvention provisions. Next, this Recent Development considers the Lexmark case and analyzes the reasoning the Lexmark court used to determine the plaintiff was likely to succeed on the merits of its anti-circumvention claim. Against this backdrop, this Recent Development considers the policy implications of allowing plaintiffs to use the anti-circumvention provisions to protect purely functional, not independently marketed, copyrighted works. This Recent Development then argues that because of negative policy implications, the Lexmark court should not have applied the anti-circumvention provisions. Finally, this Recent Development briefly examines Real Networks Inc. v. Streambox, Inc., a case in which a court correctly applied the anti-circumvention provisions.

II. History and Purpose of the Digital Millennium Copyright Act

As mandated by the World Intellectual Property organization Copyright Treaty,⁸ Congress codified the Digital Millennium Copyright Act ("DMCA") in 1998.⁹ Congress promulgated the DMCA to "facilitate the robust development and world-wide expansion of electronic commerce, communications, research, development, and education in the digital age."¹⁰ When enacting the law, Congress focused on the narrow topics of electronic commerce and online marketplaces, as evidenced in the Senate Report:¹¹

The law must adapt in order to make digital networks safe places to disseminate and exploit copyrighted materials. . . . Title I of this bill provides this protection and creates the legal platform for launching the global digital online marketplace for copyrighted works. It will also make available via the Internet the movies, music, software, and literary works that are the fruit of the American creative genius.¹²

In brief, the Senate and House of Representatives reports denote the following reasons for enacting the DMCA: (1) to make online marketplaces "a safe place to disseminate and exploit copyrighted materials,"¹³ (2) to adapt the law so as to create rights in an "unregulated and beneficial environment,"¹⁴ (3) to encourage trade in electronic works over the Internet,¹⁵ and (4) to bring the electronic marketplace copyright law in line with standard American copyright law.¹⁶

All of the stated reasons for enacting the DMCA apply to building consumer confidence in the Internet. Yet, in the process of creating the legislation, Congress never addressed whether the DMCA should protect electronic works that are not disseminated by means of the Internet.¹⁷ Congress also failed to address whether the anti-circumvention provisions apply to protect purely functional, not independently marketed, copyrighted works.¹⁸ As discussed in Part III, the broad wording¹⁹ of the anti-circumvention provisions leads to the conclusion that both works that are not disseminated through means of the Internet and purely functional, not independently marketed, copyrighted works fall within the class of works protected by the anti-circumvention provisions.

III. The Anti-Circumvention Provisions of the DMCA

The Information Infrastructure Task Force Working Group on Intellectual Property Rights was the first group to discuss the anti-circumvention provisions.²⁰ It did so in a 1995 report²¹ that recommended that the United States encourage the international community to adopt a provision similar to the eventual 17 U.S.C. § 1201(a).²² During treaty talks before the World Intellectual Property Organization ("WIPO"), the United States, following the Task Force's recommendation, took the position that the anti- circumvention provisions should be added to the WIPO Copyright Treaty.²³ Other countries considering the treaty supported this recommendation, and the provisions were ultimately mandated by treaty as follows:

Contracting parties shall provide adequate legal protection and effective legal remedies against the circumvention of effective technological measures that are used by authors in connection with the exercise of their rights under this Treaty or the Berne Convention and that restrict acts, in respect of their works, which are not authorized by the authors concerned or permitted by law.²⁴

After signing the WIPO Copyright Treaty, Congress complied with this WIPO provision. In order to "ensure a thriving electronic marketplace for copyrighted works on the Internet,"²⁵ Congress added anti-circumvention provisions to the DMCA.

The applicable anti-circumvention provisions are codified at 17 U.S.C. § 1201. The text of § 1201(a)(1)(A) states, "No person shall circumvent a technological measure that effectively controls access to a work protected under this title." Section 1201(a)(2) provides,

No person shall manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, device, component, or part thereof, that—

(A) is primarily designed or produced for the purpose of circumventing a technological measure that effectively controls access to a work under this title;

(B) has only a limited commercially significant purpose or use other than to circumvent protection afforded by a technological measure that effectively controls access to a work protected under this title; or (C) is marketed by that person or another acting in concert with that person with that person's knowledge for use in circumventing a technological measure that effectively controls access to a work protected under this title.²⁶

Senate Report 105-109²⁷ explains that these provisions are "designed to protect access to a copyrighted work."²⁸ The report goes on to explain why the anti-circumvention provisions are necessary:

The prohibition in [§] 1201(a)(1) is necessary because prior to this Act, the conduct of circumvention was never before made unlawful. The device limitation in [§] 1201(a)(2) enforces this new prohibition on conduct. The copyright law has long forbidden copyright infringements, so no new prohibition was necessary. The device limitation in [§] 1201(b) enforces the longstanding prohibitions on infringements.²⁹

The DMCA's anti-circumvention provisions were added to strengthen copyright law. Through § 1201(a)(1), Congress buttressed the protections of copyright law by punishing not only those who infringe a copyright but also those who circumvent effective technological measures in order to gain access to a copyrighted work. Section 1201(a)(2) further strengthens the protections of copyright law by making it illegal for manufacturers, retailers, and others to deal in products that are primarily used to circumvent technological measures that control access to copyrighted works.

IV. Facts and Holding of Lexmark International, Inc. v. Static Control Components³⁰

The Lexmark corporation designed and implemented a business strategy that enabled owners of certain Lexmark printers to buy either an ink cartridge at the regular price or a "prebate" ink cartridge³¹ at a discounted price.³² A prebate is similar to a rebate, but with a prebate there is no need to send in a receipt to acquire a refund. Instead, the consumer accepts an agreement and is offered an on-the-spot discount. For instance, in Lexmark, by opening the prebate cartridge packaging, consumers accepted an agreement³³ that required them to return their spent prebate cartridge to Lexmark after the initial use and prohibited them from refilling the spent cartridge. To ensure compliance, Lexmark manufactured the prebate cartridges with a microchip that prevented their compatibility with a Lexmark printer if the cartridges had been refilled.³⁴

Static Control Components ("SCC") manufactured a microchip designed to circumvent the authentication sequence that prevented the use of refilled prebate printer cartridges in Lexmark printers.³⁵ Consequentially, Lexmark sought to enjoin SCC from "making, selling, distributing, offering for sale, or otherwise trafficking"³⁶ in these microchips. In its complaint, Lexmark asserted three causes of action: (1) the SCC microchip "infringes Lexmark's copyright in its 'Toner Loading Programs'";³⁷ (2) the SCC microchip circumvents a technology measure that effectively controls access to Lexmark's Toner Loading Programs in violation of the anti-circumvention provisions of sections 1201(a)(2)(A), (B), and (C) of the DMCA;³⁸ and (3) the SCC microchip circumvents a technological measure that effectively controls access to Lexmark's Printer Engine Program in violation of the anti-circumvention provisions of § 1201(a)(2)(A), (B), and (C) of the DMCA.³⁹

The court granted the preliminary injunction against SCC, holding that "Lexmark . . . demonstrated a likelihood of success on the merits of its . . . claims under...