Here, thanks to a volunteer, PeteS, who has transcribed it for us, are the concurring opinion by Justice Merritt and the concurring in part and dissenting in part opinion by Justice Feikens in the Lexmark decision, which we wrote about in the previous article.
MERRITT, Circuit Judge, concurring. I agree with the Court's opinion as far as
it goes; but, on the record now before us, I would go further in
limiting the scope of the remand. As the Court explains, the Toner
Loading Program is not copyrightable because of the merger and scenes
a faire doctrines, and even if it were copyrightable SCC's use of the
program in this case appears to fall under the fair use exception.
Its purpose, though commercial in nature, was only to sell cartridges
that could be used by Lexmark printers rather than to profit by
infringing any Lexmark copyright. The fact that the Toner Loading
Program is not copyrightable defeats both Lexmark's direct claim to
copyright infringement and its DMCA claim based on the Toner Loading
Program (because the DMCA only prevents the circumvention of measures
that protect copyright-protected works). And I agree that Lexmark's
DMCA claim based on the clearly copyright-protected Printer Engine
Program fails because the authentication sequence does not, and is
not intended to, "effectively control access" to the
Printer Engine Program.
I write separately to emphasize that our holding should not be limited
to the narrow facts surrounding either the Toner Loading Program or
the Printer Engine Program. We should make clear that in the future
companies like Lexmark cannot use the DMCA in conjunction with
copyright law to create monopolies of manufactured goods for
themselves just by tweaking the facts of this case: by, for example,
creating a Toner Loading Program that is more complex and "creative"
than the one here, or by cutting off other access to the Printer
Engine Program. The crucial point is that the DMCA forbids anyone
from trafficking in any technology that "is primarily designed
or produced for the purpose of circumventing a technological measure
that effectively controls access to a [protected] work." 17
U.S.C. § 1201(2)(A) (emphasis added). The key question is the
"purpose" of the circumvention technology. The microchip in
SCC's toner cartridges is intended not to reap any benefit from the
Toner Loading Program - SCC's microchip is not designed to measure
toner levels - but only for the purpose of making SCC's competing
toner cartridges work with printers manufactured by Lexmark.
contrast, Lexmark would have us read this statute in such a way that
any time a manufacturer intentionally circumvents any technological
measure and accesses a protected work it necessarily violates the
statute regardless of its "purpose." Such a reading would
ignore the precise language - "for the purpose of — as
well as the main point of the DMCA — to prohibit the pirating
of copyright-protected works such as movies, music, and computer
programs. If we were to adopt Lexmark's reading of the statute,
manufacturers could potentially create monopolies for replacement
parts simply by using similar, but more creative, lock-out codes.
Automobile manufacturers, for example, could control the entire
market of replacement parts for their vehicles by including lock-out
chips. Congress did not intend to allow the DMCA to be used
offensively in this manner, but rather only sought to reach those who
circumvented protective measures "for the purpose" of
pirating works protected by the copyright statute. Unless a plaintiff
can show that a defendant circumvented protective measures for such a
purpose, its claim should not be allowed to go forward. If Lexmark
wishes to utilize DMCA protections for (allegedly) copyrightable
works, it should not use such works to prevent competing cartridges
from working with its printer.
the DMCA in pari materia with the rest of the copyright code supports
this interpretation. The DMCA should be used as part of the copyright
code as it applies to computer software codes and other digital
media. To this extent, the specific "purpose" language of
the DMCA modifies the more abstract language of the previous
copyright law. As the Court explains, the fair use exception in
copyright law explicitly looks to the purpose of the one making the
copy in determining whether or not such copying violates the statute,
and the DMCA itself contains a reverse engineering exception that
also demonstrates Congress' s aim merely to prevent piracy. I agree
with the Court that both exceptions apply to SCC' s actions in this
case. But we should be wary of shifting the burden to a rival
manufacturer to demonstrate that its conduct falls under such an
exception in cases where there is no indication that it has any
intention of pirating a protected work. See, e.g., Lawrence Lessig,
Free Culture 187 (2004) (noting the danger that "in America fair
use simply means the right to hire a lawyer to defend your right to
create"). A monopolist could enforce its will against a smaller
rival simply because the potential cost of extended litigation and
discovery where the burden of proof shifts to the defendant is itself
a deterrent to innovation and competition. Misreading the statute to
shift the burden in this way could allow powerful manufacturers in
practice to create monopolies where they are not in principle
supported by law. Instead, a better reading of the statute is that it
requires plaintiffs as part of their burden of pleading and
persuasion to show a purpose to pirate on the part of defendants.
Only then need the defendants invoke the statutory exceptions, such
as the reverse engineering exception. In this case, even if the Toner
Loading Program were protected by copyright, and even if the access
to the Printer Engine Program were "effectively"
controlled, there has been no showing that SCC circumvented the
authentication sequence for the purpose of accessing these programs.
Indeed, the proof so far shows that SCC had no interest in those
programs other than ensuring that their own cartridges would work
with Lexmark's printers.
this reading of the DMCA is also supported by the provision in the
Constitution that grants Congress the power to regulate copyright.
Article I, section 8, of the Constitution gives Congress the power to
regulate copyright in order to "promote the Progress of Science
and useful Arts." U.S. Const, art. I, § 8, cl. 8. Congress
gives authors and programmers exclusive rights to their expressive
works (for a limited time) so that they will have an incentive to
create works that promote progress. Lexmark's reading of the extent
of these rights, however, would clearly stifle rather than promote
progress. It would allow authors exclusive control over not only
their own expression, but also over whatever functional use they can
make of that expression in manufactured goods. Giving authors
monopolies over manufactured goods as well as over their creative
expressions will clearly not "promote the Progress of Science
and the useful Arts," but rather would stifle progress by
stamping out competition from manufacturers who may be able to design
better or less expensive replacement parts like toner cartridges.
these additional reasons, I concur in the Court's opinion reversing
the judgment of the district court. On remand the first question
should be whether Lexmark can show the requisite "primary
purpose" to pirate a copyrighted work rather than to ensure that
their own cartridges work with Lexmark's printer. If not, its case
against SCC should be dismissed.
IN PART, DISSENTING IN PART
District Judge, Concurring in part and Dissenting in part. I begin
this opinion by noting that my colleagues and I agree on a number of
points regarding this case. We agree that this opinion does not
foreclose any outcome on the case in chief; instead, its decisions
are limited to the grant of the preliminary injunction below. We also
agree that Plaintiff Lexmark failed to demonstrate a likelihood of
success on the merits of success on the third count, which deals with
the Printer Engine Program (PEP) (although I write to explain my own
reasoning as to why that is, I also agree with the reasoning of my
colleagues). We agree that the Digital Millennium Copyright Act
(DMCA) was not intended by Congress to be used to create a monopoly
in the secondary markets for parts or components of products that
consumers have already purchased. Finally, we agree on the outcome of
the second count, although we come to that conclusion for different
the reasons explained below, however, I dissent as to the majority's
decision on the first count, regarding the copyrightability and
infringement of the Toner Loading Program (TLP).
I. Count One
first count before us deals with the question of whether the Toner
Loading Program (TLP) at issue here is copyrightable. My colleagues
give three reasons for their findings: first, that the TLP is not
sufficiently original to qualify for copyright protection; second,
that the district court erroneously failed to apply the doctrines of
merger and scenes a faire to the copyrightability question; and
third, the district court erred in assessing whether the TLP
functions as a lock-out code.
feel that the record could support a finding that there was enough
original expression in the TLP to qualify it for copyright
protection. Second, although I agree that the district court erred in
its factual findings supporting the conclusion that the TLP was not
functioning as a lock-out code, I feel the record offers support for
the proposition that it is possible and practical for competitors to
make toner cartridges that function with the printer without copying
the Toner Loading Program, and therefore, I would remand that issue
to the district court to make a determination in the first instance.
Third, although I agree with my colleagues that the district court
erred in applying the law of the doctrine of merger and scenes a
faire, I would apply the doctrines in this case differently.
Whether the TLP Contains Original Expression
agree with my colleagues that in discerning whether a work is
"original" as required by 17 U.S.C. §102(a), and not
unprotectable under 17 U.S.C. §102(b), the court should ask
whether the ideas, methods of operation, and facts of the program
could have been expressed in any form other than that chosen by the
programmer, taking into consideration the functionality,
compatibility, and efficiency demanded of the program. However, I
part ways on the question of whether the record could support the
district court's initial finding that the TLP was sufficiently
original to be copyrightable.
colleagues rely on testimony from Defendant's expert Goldberg, who
concluded that external factors dictated the way the TLP was written
and that the proposals for alternative ways of writing the TLP
offered by Plaintiffs expert Maggs were inefficient and repetitive.
My colleagues find both that a lookup table does not "differ
meaningfully" from the use of equations and that as a matter of
law, the equations that were used in the TLP, alternative equations,
and a lookup table are "different ideas or methods of operation
altogether". I am at a loss to understand how two things that do
not differ meaningfully are altogether different. I would hold that
each of these alternatives are different expressions of the same idea
(monitoring and reporting on toner levels). I would also find that
there is factual support in the record for the proposition that there
are a variety of expressions that are practical options given the
external factors that constrain the program. Nothing in the record
suggests that a look up table could not be expressed in the limited
number of bytes or the requisite computer language. In fact, given
that sample code was provided for alternatives, in my mind, I think
it is entirely possible that the district court could conclude, based
on this record, that a TLP using (for instance) a lookup table could
be written efficiently and practically. Therefore, I would uphold the
district court's decision on originality, or at most, remand the case
for the district court to reconsider its decision on originality and
make more specific factual findings to support its preliminary
Whether the TLP Is a Lock-Out Code
colleagues and I agree that the district court's finding of fact #79
is inadequate to support the conclusion the district court drew about
the practical possibility or impossibility of using the printer
without copying the TLP verbatim.FN1 (If verbatim
copying was necessary, then the TLP essentially acted as a "password"
or a lock-out code.) However, while my colleagues see the record as
supporting only the finding of impossibility, I find the record
decidedly mixed on the issue.
are three ways to make a chip that achieves compatibility between a
re-filled Prebate cartridge and the printers at issue: (1) copy
Lexmark's chip (and therefore the TLP) verbatim; (2) replace the TLP
with a different program and change the checksum value accordingly;
or (3) turn the entire TLP sequence "off" with the flip of
a single bit. Here, Defendant chose the first option. My colleagues
rely on Dr. Goldberg's testimony that the second method is
"computationally impossible", and though I do not agree
that the record is unchallenged on this point,FN2 I
agree that the record leans strongly toward impossibility as a
practical matter. However, I depart from the opinion of my colleagues
sharply when I consider the third option.
I explain below, I believe the record offers strong evidence that the
third option is possible, even without contextual information
as to the location of the ”off” switch. Therefore,
although my colleagues appear to believe that the checksum operation
must conclude successfully for the printer to operate, I do not
believe the record supports this finding. I believe there is
uncontroverted evidence in the record that it is possible to
manufacture a chip that never triggers the checksum sequence, and the
printer can still operate - in fact, this is exactly what occurs with
the non-Prebate cartridges. Further, I believe that the record offers
evidence that it was unnecessary for Defendant to copy the TLP to
make the cartridge compatible with the printer, even with no
contextual information about the location or existence of the "off
switch", and would remand to the district court to make new
factual findings and determine that question for itself.
offered evidence that the third option was possible. In the testimony
of Maggs, when the questioning turned to the third option of turning
the entire TLP process off with the flip of a single bit, he said it
would take "a few days or a few weeks maybe" of trial and
error to find the bit that turned off the TLP process. JA 0953 - 4.
When asked about the one-bit off switch, Goldberg only stated that he
did not know it existed, because Defendants could not determine what
the bit did. JA 1030. However, Goldberg stated previously that
Defendant ran a very similar test as part of its attempt at reverse
engineering, in which it flipped one of every eight bits in the TLP.
colleagues argue that Lexmark has introduced no evidence that option
three, finding the off switch, was "less arduous" than
option two, finding a working checksum. This is simply false.
Lexmark's expert testified that it would take a "few days or a
few weeks" to reverse engineer the one-bit "off switch"
by "brute force," assuming you did not know where the "off
switch" was. JA 0954. Given this testimony, I think it is
improper for my colleagues to decide that reverse engineering a
working chip was impossible, instead of remanding this question to
the district court.
even without Maggs' testimony, I think it is evident from this record
that option three is considerably less arduous than option two. The
undisputed evidence in the record about the chip's design offers more
than enough evidence for a court to find that option three is vastly
easier than option two.
record states that the off switch works regardless of what the values
of all other bits on the chip are. JA 0708. Therefore, the maximum
number of tests that must be run to find the off switch can be
represented as two times the number of bits that might be the off
switch (since there are only two values of each bit, 0 and 1). In
contrast, the checksum's operation is relative to the values of other
bits on the chip. In other words, in contrast to the off switch, a
working checksum value depends on the position of 55 other bytes,FN3
or 440 other bits. JA 0706. This means that no bit can be tested
independently, and instead, the tester must search for a "match"
between a particular setting of the TLP bytes and the checksum value.
Thus, even though there is clearly more than one way to set all the
bits to have the chip function, basic principles of mathematics tell
us that the number of tests that must be done to find a working
checksum and arrangement of bits rises exponentiallyFN4
in comparison to the test for single, independently-functioning off
switch. Therefore, I think this record amply supports the proposition
that it is much simpler to find the off switch than it is to find a
record with regard to what I describe as the third option,
reverse-engineering the off switch for the TLP process, could
reasonably support the finding that it is possible to find that
switch without contextual information, and hence to reverse-engineer
a working chip even without a memory map or other contextual
information. The factual determination of whether such reverse
engineering is possible in turn decides the factual question of
whether or not the TLP is a lock-out code. This factual finding
significantly impacts any decision about the use of the merger
doctrine as a defense to infringement by Defendant, and therefore the
likelihood of success on the merits by Plaintiff. Because of the
importance of the question, and the insufficiency of the factual
findings made by the district court on this question, I would remand
to the district court for it to make that finding in the first
Doctrines of Merger and Scenes a Faire
believe my colleagues offer a good description of the law of merger,
and I will not restate that law here. However, there is one aspect of
merger my colleagues do not decide that I believe is important to
this case: a Circuit split regarding the law of merger.
put, there is some disagreement about whether the merger doctrine
acts as a bar to copyrightability, or simply as a defense to
particular types of infringement. See Nimmer 13.03 [B] ;
Mason v. Montgomery Data, Inc., 967 F.2d 135, 138, fn 5
(5th Cir. 1992); Kregos v. Associated Press, 937 F.2d 700, 705
(2nd Cir. 1991). The Sixth Circuit has not previously taken a
position on this question. The Second and Ninth Circuits have taken
the position that merger operates only as a defense to infringement.
Kregos v. Associated Press, 937 F.2d 700, 705 (2d Cir. 1991);
Ets-Hokin v. Skyy Spirits, Inc., 225 F.3d 1068, 1082 (9th Cir.
2000). The Fifth Circuit holds that merger determines
copyrightability. Mason, 967 F.2dl35, 138, fn 5.
I read the majority's opinion, my colleagues have declined to take a
position on this split, but I would do so, because of the importance
of this decision to the DMCA count. As I discuss later in my analysis
of Count II, the DMCA only protects works that are protected by Title
17 of the U.S. Code or in which the copyright owner has a right under
Title 17. 17 U.S.C. 1201(a)(l)(A); 17 U.S.C. 1201(b)(A). Therefore,
if the doctrine of merger is applied at the copyrightability stage,
and merger is found to have occurred, Plaintiff will have failed to
state a claim on which relief can be granted under the DMCA. However,
if the doctrine of merger is applied at the infringement stage, then
even if merger is found to have occurred, some analysis of the DMCA's
scope of protection of the TLP is in order. Therefore, in my view, it
is essential to decide whether merger of a work with a method of
operation determines the initial question of copyrightability of the
work, or operates only as a defense to infringement.
I would exercise judicial economy and limit the holding to the case
of merger with a method of operation (which is the question I believe
this case presents ),FN5 for the reasons below, I
would find the merger doctrine can operate only as a defense to
infringement in that context, and as such has no bearing on the
question of copyrightability.FN6
Copyright Act denies copyright protection to, among other things,
methods of operation. 17 U.S.C. §102(b). However, an otherwise
copyrightable text can be used as a method of operation of a computer
- for instance, an original, copyrightable poem could be used as a
password, or a computer program as a lock-out code. In my view,
therefore, it is necessary to know what the potential infringer is
doing with the material in order to know if merger has occurred. In
other words, if I use my own copyrighted poem as a password or
lock-out code, an individual who published the poem as part of a book
could not escape a finding of liability for infringement. The
rationale for the merger doctrine is that without it, certain ideas
or methods of operation would be removed from the public realm
because all ways of expressing them would be copyrighted. When a poem
or program is used as a lock-out code, it is being used as a step in
a method of operation of the thing it is locking. Therefore, to
protect a work from copying when it is used as a password would be to
prevent the public from using a method of operation.
this reasoning, an individual who copied a poem solely to use as a
password would not have infringed the copyright, because in that
scenario, the alleged infringer would have the defense that the poem
has "merged" with a method of operation (the password). By
contrast, someone who copied the poem for expressive purposes (for
instance, as part of a book of poetry) would not have this defense.
For these reasons, I would hold that in cases where the merger is
with a method of operation, the merger doctrine should be applied as
a defense to infringement only, and not as informing the question of
copyrightability of the work itself.
that reasoning to this case, the TLP can remain copyrightable as a
computer program, and therefore retain some of the protections of
copyright law, even if it is a lock-out code. Defendant can still
avoid infringement, however, if it uses the TLP only as a method of
operation. For instance, Defendant can only claim this defense to
infringement if it uses the TLP to interface with the Lexmark
printers at issue, and if it is a necessary method of operation of
the machine. It would not be able to assert the same merger defense
to infringement if it manufactured its own printers and inserted the
copied TLP as part of its own Printer Loading Program, even if it
originally copied the TLP for the purpose of interfacing with Lexmark
printers. Importantly, as this case is concerned, Defendant could not
successfully assert this defense if (as a practical matter and not as
a theoretical question) the printer could be operated without copying
the TLP. In my view, any finding of merger with a method of operation
in this case would act as a defense to infringement, but leave the
TLP potentially copyrightable (and therefore allow it to qualify for
the additional protections of the DMCA).
support a remand on the question of whether or not the TLP is
operating as a lock-out code on the chips in question. Therefore, I
would also remand the question of whether the TLP has merged with a
method of operation in Defendant's SMARTEK chip, because the two
questions are essentially equivalent.
computer programs, the scenes a faire doctrine has been restated as a
determination of whether external constraints on the size and content
of a program, and standard programming practices, are so
deterministic of the content of program that the contents of the
program are analogous to the "stock scenes" of literature.
Gates Rubber Co.v.Bando Chem. Indus., Ltd, 9
F.3d 823, 838 (10thCir, 1993). Courts have recognized that a
rare work may be entirely made up of scènes
à faire, but many works
will be a combination of scènes
and more original elements. See, e.g., Reed-Union Corp. v. Turtle
Wax, Inc., 77 F.3d 909, 914 (7th Cir. 1996).
I read it, Defendant's argument is essentially that because the
equations involved in the TLP are standard and their arrangement
involved no creativity, the program was one of those rare works that
is entirely made up of scènes à faire and the
arrangement of those non-copyrightable elements is not creative
enough to allow the work any protections of copyright. The record is
undisputed on the point that there are elements of the program (some
code that translates to LMX) that do not play a functional role and
appear to be installed for the purpose of proving verbatim copying in
an action like this one. I think it is unquestionable that these
elements are not scènes à faire, and they were copied.
Thus, I believe that regardless of any other finding, there is a
likelihood that some portion of the work would not be classified
scènes à faire. However, because it is not clear
whether that portion alone would be creative enough to merit
copyright, I will discuss the scènes à faire doctrine's
application to this case, as I see it.
believe Feist stands for the proposition that a creative
enough arrangement of otherwise uncopyrightable elements would in
fact be copyrightable. Feist Publications, Inc. v. Rural Telephone
Service Co., 499 U.S. 340 (1991). In that situation, a wholesale
copying of the program (such as we have in this case) might still
constitute infringement, even though the program is entirely made up
of scènes à faire, because the copyrightable
arrangement would be copied. In addition, a program (like the one
before us) may be a blend of scènes à faire and
material that is not dictated by norms or constraints, and in my
mind, copying either a substantial part of an original arrangement or
copying enough of the non-scènes à faire elements would
still constitute infringement.
there is a Circuit split regarding the stage at which to apply the
scènes à faire doctrine that parallels the split as to
the merger doctrine. 4 Nimmer§ 13.03[B], at 13-76 - 7
n.180.1; Reed-Union Corp. v. Turtle Wax, Inc., 77 F.3d 909,914
(7th Cir. 1996) (holding the doctrine of scenes a faire is separate
from the doctrine regarding the validity of a copyright); Ets-Hokin
v. Skyy Spirits, Inc., 225 F.3d 1068,1082 (9th Cir. 2000)
(recognizing the split and citing Reed-Union favorably on this
question); Taylor Corp. v. Four Seasons Greetings LLC, 315
F.3d 1039,1042-3 (8th Cir. 2003) (finding that the scenes a faire
doctrine determined whether substantial similarity existed); Hoehling
v. Universal City Studios, Inc., 618 F.2d 972 (2nd Cir. 1980),
cert, denied, 449 U.S. 841 (1980) (holding that scenes a faire
are not copyrightable). The Sixth Circuit has not explicitly taken a
position on this split, although in a case regarding "stock
scenes" in a movie decided after this case was argued, the Sixth
Circuit held that scènes à faire are "too general
to qualify for copyright protection" and applied the doctrine
before considering substantial similarity. Stromback v. New Line
Cinema, Nos. 02-2387/2388, slip op. at 16 (Sept. 14, 2004). The
district court took the position that the scènes à
faire doctrine should be applied as a defense to infringement, and
therefore, on that position alone, this case would require remand for
consideration in light of Stromback. ¶37,
at 31. My colleagues take the position that Stromback did,
namely that the scènes
à faire doctrine determines copyrightability.
this panel is bound to follow the decision in Stromback. However,
I believe that Stromback can and should be distinguished in
the area of computer programming. The doctrine of scènes à
faire has been expanded in the area of computing beyond the
traditional literary "stock scenes" to include those
elements that are dictated by external constraints. Gates Rubber
Co. v. Bando Chem. Indus., Ltd., 9 F.3d 823, 838 (10th Cir.
1993). Therefore, in this area, application of the scènes à
faire doctrine does require some understanding of how the element is
being used: as I read the case law, if an otherwise copyrightable
arrangement was dictated by external constraints, it would classified
as scènes à faire. However, if external constraints,
norms, etc. did not dictate a particular arrangement in a defendant's
work, but a defendant copied a particular arrangement anyway, it is
not clear to me that the case law would still classify that same
arrangement as scènes à faire - instead, the work might
qualify for some protection from infringement. Thus, I think when
applying the extension of the scènes à faire doctrine
for computer programs, the district court's rule is superior because
it is necessary to understand the circumstances of the copying in
order to know whether or not the scènes à faire
doctrine applies. Therefore, I would distinguish Stromback and
take the other side of the Circuit split for cases regarding the
application of the scènes à faire doctrine, when its
extension regarding external constraints for computer programs is at
agree with my colleagues that the question in the first element of
the fair use defense is "whether the user stands to profit from
exploitation of the copyrighted material
without paying the customary price." Harper & Row,
Publishers, Inc. v. Nation Enters., 471 U.S. 539,562 (1985)
(emphasis added). I part ways with my colleagues, however, in their
application of that doctrine here.
we have the curious situation that Defendant says it did not know the
TLP existed, while arguing that the use is fair. Thus, while
Defendant undoubtedly had the purpose of selling exact copies of the
Lexmark chip (which contained the TLP) "for private commercial
gain" (which weighs against a fair use defense), it apparently
did not have the purpose of selling the TLP itself (although it did
& Row does say that the defendant's use in that case "had
not merely the incidental effect but the intended purpose of
supplanting the copyright holder's commercially valuable right."
Id at 562 (emphasis in original). Thus, I believe, my
colleagues read the case to say that Plaintiff, in order to prove a
likelihood of success, must show that the user intended to benefit
from the copying of the TLP, and not simply intended to benefit from
the sale of an exact copy of the Lexmark chip that happened to
contain the TLP.
I part ways. I think that Defendant had the intended purpose of
making money from an exact copy of Plaintiff s chip. I do not think
that this prong can or should be transformed into a prong weighing in
favor of "fair use" because Plaintiffs alleged violation of
copyright protections was done unknowingly.FN7 The
Court in Harper & Row said it could not "ignore [the
defendant's] stated purpose of first publication." Id.
Likewise, I think we should not ignore that this Defendant knew
it was making an exact copy of a computer chip, and it did so in
order to benefit commercially from whatever content was on the chip.
In other words, Defendant copied that chip for the purpose of gaining
whatever commercial value such a chip had. Therefore, this factor is
at best neutralized by the fact that Defendant did not know that the
commercial value was potentially partly derived from copyright
rights, and this factor therefore should not weigh against
respect to the fourth factor, which involves the effect Defendant's
use had on the value of the copyrighted material, I disagree with my
colleagues on the question of whether Plaintiff was required to
introduce evidence of the independent market for TLPs, or if evidence
that the market for the cartridges was impacted was enough. I agree
that the Supreme Court instructs us that "[a] use that has no
demonstrable effect upon the potential market for, or the value of,
the copyrighted work need not be prohibited[...]." Sony Corp.
of Am. v. Universal City Studios, Inc., 464 U.S. 417,450 (1984).
My difference with my colleagues emerges from my belief that the
words "or value of suggest that in situations in which the
market for the work itself does not necessarily represent the value
of the work, the value of the work is what a court should consider. I
believe the value of the TLP is represented by the market for toner
cartridges, and therefore, it is not necessary for Plaintiff to
introduce evidence about the TLP market in order to demonstrate a
likelihood of success on this factor. In other words, the potential
commercial benefit from copying the TLP accrues because the TLP on
the chip at issue adds functionality to the toner cartridge, which in
turn may enhance the market for the cartridge itself.
think the district court could easily find that a toner cartridge
that accurately tells a user when the toner is running low is more
valuable than one that does not. More specifically, unlike my
colleagues, I think the market for SCC's cartridges containing the
SMARTEK chip might have been impacted negatively if the printer
inaccurately reported toner levels when using an SCC cartridge.
Therefore, as I see it, the TLP on the chip increased the value of
Defendant's toner cartridge if the TLP Defendant copied is better
able to report on toner consumption than a chip without the TLP would
be. If no TLP was on the chip, the printer would use the default TLP
code in the Printer Engine Program to warn users of low toner levels.
However, there is no evidence in the record that speaks to whether
the default TLP that comes with the printer would be able to
accurately report the amount of toner in a Prebate cartridge, or
whether it would misreport the level of toner to the user. Thus,
there is no evidence in the record one way or another regarding
whether Defendant's cartridge is more valuable because the cartridge
contains the TLP than it would be if the cartridge did not.
conclusion, I think the market for these cartridges may very well be
impacted by the ability of the toner cartridges to make an accurate
report of toner levels. I do not believe Lexmark needs to introduce
evidence showing that an independent market exists for the TLP -1
think the court can assume an impact to the primary market for the
re-filled cartridges, provided that the copied TLP lent additional
functionality to the cartridge. Therefore, because the benefit (or
lack thereof) gained from copying the TLP on the chip instead of
using the printer's default TLP is necessary to deciding the fair use
question, and because the record is silent on this point, I would
remand to the district court to gather the evidence necessary to make
this determination and reconsider its findings on fair use in light
of that additional evidence.
discussed under Count I, the DMCA only offers its additional
protections to those works that are already protected by Title 17 of
the U.S. Code or those works in which the copyright owner has a
protected right under Title 17. 17 U.S.C. 1201(a)(2)(A); 17 U.S.C.
1201(b)(A). Because I believe that this record does not allow the
elimination of copyrightability on the grounds of originality,
merger, or scènes à faire, I believe some analysis of
the DMCA claim regarding the TLP is necessary. However, I note that
the DMCA explicitly leaves the defenses to copyright infringement,
including the fair use doctrine, unaltered. 17 U.S.C. § 1201(c).
Therefore, if the district court on remand were to find that the
merger, scènes à faire, or fair use doctrine supplied
an adequate defense to infringement, given the copying that went on
in this case, I do not believe Plaintiff could meet its burden to
show likelihood of success under 17 U.S.C. §1201(b), because
there would be no "right of a copyright owner" to prevent
the TLP's use in this fashion.
believe Plaintiff also failed to meet its burden under both 1201 (a)
and 1201(b), however, because it failed to present evidence that the
chip was primarily designed or produced for the purpose of accessing
unlike traditional copyright law, there is an element of
scienter present in the DMCA: in order to be a
violation of the Act, any technology that is marketed must have been
"primarily designed or produced for the purpose of
circumventing" a technological measure or other protection of a
work (or a portion of the work) protected under Title 17. 17U.S.C.
1201(a)(2)(A); 17U.S.C. 1201(b)(A). Here, I think the evidence before
the trial court was overwhelming on the point that while Defendant
"primarily designed" the chip to circumvent any protections
of the Printer Engine Program, the chip was not "primarily
designed or produced for the purpose of circumventing protections for
the TLP. Therefore, even if the checksum sequence can be categorized
as a lock-out code that must be circumvented in order for the TLP on
the chip to be used, or the primary authentication sequence is seen
as a protection for both the TLP and the Printer Engine Program,
because the chip was primarily designed to allow access to the
Printer Engine ProgramFN9 and not the TLP, I
believe Plaintiff has not demonstrated a likelihood of success on
I emphasize the narrow bounds of my position. The record before the
trial court at the preliminary injunction stage points overwhelmingly
to the conclusion that Defendant did not realize the TLP was on the
chip. If evidence showed Defendant knew or should have known that
there was a program on the chip, and that it was practical for the
Defendant to manufacture a chip that did not access (and therefore
use) the TLP, in my mind, that would be a different case. Under that
scenario, the defendant would know of the protection, be able to
achieve the purpose of operating the printer without circumventing
that protection, and yet still choose to circumvent those
protections. On such a record, I think a court would have to
carefully weigh whether such a situation means that Defendant's
product was "produced for the purpose of circumventing"
protections of the TLP.
reasoning on this count is based on my belief that consumers did not
have an implied license to use the copyrightable TLP beyond the first
re-fill of the Prebate cartridge. With the assumption that the
shrinkwrap agreement was valid and enforceable (I believe Lexmark can
demonstrate a likelihood of success on that questionFN10
), I would conclude consumers' implied license to use the copyrighted
TLP did not extend beyond the first re-fill of the Prebate cartridge.
The TLP at issue is not present in the printer at purchase. Instead,
the consumer gains access to using it by purchasing the Prebate toner
cartridge (which stores the programs in its microchip). The Prebate
toner cartridge is only sold under a special shrinkwrap agreement
that requires that the cartridge be returned to Lexmark when it is
empty and may not be re-filled by others for reuse. Since the
consumer is only authorized to use the Prebate cartridge until the
toner runs out, it follows that the license also blocks the consumer
from using the TLP after that time.
TLP was part of the cartridge, and therefore, when the consumer was
able to use the TLP after the cartridge had been emptied of toner and
re-filled by Defendant (in violation of the shrinkwrap agreement), in
my mind, he or she gained unauthorized access to the TLP. However,
the record currently supports the finding that Defendant did not have
the requisite knowledge of the TLP to form an intent to primarily
design or produce a chip for the purpose of gaining access to it.
Therefore, I concur on the outcome of the second count, although my
reasoning would be different from that of my colleagues.
contrast to the TLP, I believe the consumer has a right to use the
Printer Engine Program for the life of the printer. Because the
consumer has this right, there is no right of the copyright owner to
prevent the consumer from using the Printer Engine Program, and
therefore, Defendants cannot be found to be in violation of the DMCA.
Though the words are never used, I think the concept of this license
is present in my colleagues opinion. I agree with their reasoning
regarding this count, and write on this issue only because I believe
it sheds additional light on my reasoning regarding Count Two.
the Lexmark printers at issue here come with the Printer Engine
Program installed. In fact, it would be impossible for the printer to
work at all without such a program, just at it would be impossible
for the printer to work without an engine. Therefore, when the
consumer buys the printer, the consumer must be buying the right to
use not just the physical printer components, but also the Printer
Engine Program that allows those physical components to produce
printed pages. By buying a Lexmark printer, the consumer acquires an
implied license to use the Printer Engine Program for the life of
DMCA defines "circumventing a technological measure" to
mean avoid, bypass, etc., "a technological measure, without
the authority of the copyright owner." 17 U.S.C. § 1201
(a)(3)(A) (emphasis mine). Therefore, under the plain meaning of the
law, circumventing a technological measure it is only a violation of
§ 1201 (a) if the device allows consumers access to a work that
they are not otherwise permitted to have. Therefore, even if
Defendant has circumvented the authentication sequence to gain access
to the Printer Engine Program, or designed a chip with that as its
main purpose, it has not violated the statute, because it has not
given anyone access to the program who did not already have authority
from Lexmark to use it. In fact, it would be impossible to use the
toner cartridge's chip to gain illegal access to the Lexmark Printer
Engine Program, because only consumers with Lexmark printers would
use the toner cartridge, and they already own the right to use the
Printer Engine Program.
this language of the statute were not enough, it is clear from the
legislative history that Congress did not intend this provision to
apply to devices that merely facilitated legitimate access. In the
House of Representative' s Commerce Committee's report on the DMCA,
it stated explicitly that the aim of § 1201 (b) was to restrict
devices used primarily for piracy, and not those that facilitate
legal use of products. In discussion of §1201 (b), the Committee
stated,"This provision is not aimed at products that are capable
of commercially significant non-infringing uses, such as consumer
electronics, telecommunications, or computer products [...] used by
businesses and consumers for perfectly legitimate purposes." HR
Rep. 1 OS-796 (October 8, 1998). The Committee also stated that
§1201(b)(l) seeks to prohibit "making or selling the
technological means to overcome these protections and thereby
facilitate copyright infringement"
[emphasis mine]. Id. In its January 1999 report discussing §1201(b),
the Commerce Committee again clarified that the measure was intended
to outlaw trade in "devices with no substantial
non-infringing uses that are
expressly intended to facilitate circumvention of technological
measures for purposes of gaining access to or making a copy of a
work" [emphasis mine]. HR Rep. 105-846 (Jan. 2, 1999). This
understanding of §1201(b) was also clear in the Senate
discussions of the DMCA. It stated that the prohibitions in §
1201 (a) were made "meaningful" through the provisions of §
1201 (b), which were intended to enforce "the longstanding
prohibitions on infringements." S.Rep. 105-190 (May 11,1998). It
reiterated that §1201(b) is intended to attack those devices
that "facilitate copyright infringement." Id. Because
Defendant's chip can only make non-infringing uses of the
Lexmark Printer Engine Program, it is clear Congress did not intend
the DMCA to apply in this situation.
the reasons stated above, I dissent from the majority's opinion with
regard to Count One. Although I concur with the result in Count Two,
I do not agree with the reasoning of my colleagues and offer my own
approach. Finally, I concur with both the reasoning and result for
Count Three, but give my own additional reasons for why that is so.
also believe the district court made another clear error in the
factual findings relating to the TLP, although it was harmless. In
finding of fact #40, the district count found that for one of the
printers in question, "7 bytes of Toner Loading Program...are
used as an input to the SHA-1 [in the T620/622 printer model]."
JA 0273. Yet in finding of fact #67, the district court found that
"the contents of the Toner Loading Program are irrelevant to the
SHA-1 for calculating the MAC." JA 0278. I believe this second
finding of fact is inaccurate; the TLP is not irrelevant to the SHA-1
if it is used as an input. However, because the chip's content
dictates the input into the SHA-1, the authentication sequence will
complete successfully regardless of the TLP content. Therefore, the
district court's error is harmless.
2. On cross-examination, Lexmark's expert, Maggs, said "it
wouldn't be easy" to figure out where and what the checksum
value should be without contextual information. JA 0953. I read this
as contradicting Goldberg's statement that it would be "impossible."
In addition, Lexmark offered the statement of another manufacturer of
toner cartridges, who said it was not impossible to achieve "a
100 percent working solution" for compatibility with the printer
(presumably the 100 percent figure includes access to a program that
would accurately report when toner was running low), although "it
has become a much more difficult endeavor[..J". JA0214.
the larger of the two TLPs at issue here.
depending on the method used to calculate the checksum, factorially.
an analogous situation, the Ninth Circuit chose to address the
copying of an access code using the fair use doctrine. Sega
Enterprises Ltd. v. Accolade, Inc., 977 F.2d 1510 (1993). I think
this situation is better understood as a merger with a method of
operation, and not as a fair use. However, I will discuss Sega
further when I discuss the fair use doctrine.
finds this is generally the better view of the merger doctrine. §
In my mind, this is consistent with the understanding that copyright
infringement does not have an element of scienter.
my colleagues argue that SCC used the TLP for "a different
purpose, one unrelated to copyright protection. Rather than using
the Toner Loading Program to calculate toner levels...". The
record is uncontested on the point that it is the copied TLP that
calculates the toner levels for the refilled Prebate cartridges, and
governs when the "toner low" message will be displayed.
Therefore, Defendant's product did use the program for the same
purpose as the Plaintiffs did - to monitor and report on toner
levels - even if Defendant did not realize that it was doing so.
Therefore, Defendant potentially benefitted from the creative energy
that Lexmark devoted to writing the program code. Although a
commercial use does not necessarily block a finding of a fair use,
Campbell v. Acuff-Rose Music Inc., 510 U.S. 569 (1994), I think this
type of commercial use is what Congress intended to weigh against a
finding of fair use.
discuss why I believe the DMCA does not reach the Printer Engine
Program in my discussion of Count III.
contends that such shrinkwrap agreements are not enforceable. In
support of this, at least one amicus brief cites a 2001 Federal
Circuit court decision that held there must be a "meeting of the
minds" in order for restrictions in the agreement to be
enforceable. Jazz Photo Corp. v. Int 7 Trade Comm., 264 F.3d
1094,1108 (Fed. Cir. 2001), cert, denied, 536 U.S. 950 (2002).
Other circuits have upheld the validity of shrinkwrap agreements.
See, e.g., ProCD, Inc. v. Zeidenberg, 86 F.3d 1447 (7th Cir.
1996) (holding that terms inside a box of software bind consumers who
use the software after an opportunity to read the terms and to reject
them by returning the product). Here, the shrinkwrap agreement was
clear and the district court could find that it supports the
conclusion that there was a meeting of the minds and the agreement is
enforceable. To wit: "This all-new cartridge is sold at a
special price subject to a restriction that it may be used only once.
Following this initial use, you agree to return the empty cartridge
only to Lexmark for remanufacturing and recycling. If you don't
accept these terms, return the unopened package to your point of
purchase. A regular price cartridge without these terms is
available." Finally, I note this case is factually different
from Hewlett-Packard Co. v. Repeat-O-Type Stencil Mfg. Corp. Inc.,
123 F.3d. 1445 (Fed. Cir. 1997), in which the shrinkwrap agreement
contained only a warning against refilling, and did not condition the
sale on a promise not to refill.