Attorney Joseph Smith (second from left) with Static Control’s Dale Lewis, William London, Bill Swartz and Michael Swartz
The largest manufacturer of aftermarket imaging systems and components was favoured in a unanimous decision by Supreme Court judges in the false advertising case, giving Static the right to sue Lexmark under the Lanham Act.
The company reported that the unanimous decision, which was passed down yesterday, means that Static Control now “has the right to sue Lexmark on grounds of false advertising” under the Lanham Act, with regards to the OEM’s ‘Prebate’ programme.
The case relates to the first case in 2002, where Lexmark sued Static Control, and was successful in getting counterclaims from Static thrown out. The claims are based, stated Static, on Lexmark “falsely telling remanufacturers that remanufacturing ‘Prebate’ cartridges was illegal”, with the Lanham Act used against Lexmark as it “prohibits false advertising”.
The case went to trial in 2007, where a jury ruled in Static’s favour, and after this trial, Static “successfully convinced” the Sixth Court of Appeals to reinstate its claims for Unfair and Deceptive Trade Practices and false advertising against Lexmark. This was rejected by the trail court, but the Sixth Court reinstated it, and Lexmark then asked the Supreme Court to overrule this in March last year.
The request from the OEM was granted in June 2013, with Static responding soon after, and the Supreme Court proceedings began in December 2013, with Static again reporting from the Court.
Justice Antonin Scalia of the Supreme Court wrote the opinion, which was adopted by all nine justices, and which read: “Static Control adequately alleged proximate causation by alleging that it designed, manufactured, and sold microchips that both (1) were necessary for, and (2) had no other use than, refurbishing Lexmark toner cartridges. It follows from that allegation that any false advertising that reduced the remanufacturers’ business necessarily injured Static Control as well.”
Static Control’s President Bill Swartz commented: “We are extremely pleased the Supreme Court agrees Lexmark should be held accountable for its actions. I only wish Ed, our founder, my father, were here to enjoy this victory with us.”
William London, the company’s General Counsel, added: “The Supreme Court’s unanimous decision should send a strong message to Lexmark. We plan to move forward with our false advertising suit against Lexmark and prove we were damaged by Lexmark’s false advertising.”