Supreme Court Rejects Lexmark's Petition

SANFORD, N.C.--(BUSINESS WIRE)--June 6, 2005--The United States Supreme Court has rejected Lexmark's petition for certiorari, upholding Static Control's position against the Digital Millennium Copyright Act (DMCA) and copyright issues raised by Lexmark in connection with Static Control's sale of Lexmark compatible chips.

The latest ruling marks the fifth straight victory for North Carolina-based Static Control Components Inc. and the end of Lexmark's attempts to use the DMCA to create a monopoly in aftermarket supplies. Static Control now offers the only Lexmark compatible chips that have been cleared by the courts under the DMCA or copyright.

“This decision should greatly simplify what is left of the Lexmark lawsuit. At the trial Lexmark will be forced to defend their anti-competitive activities without the distraction of Lexmark's baseless DMCA claims.”

In October, the 6th U.S. Circuit Court of Appeals in Cincinnati, Ohio, overturned a preliminary injunction banning the sale of Smartek replacement chips by Static Control Components for the Lexmark cartridges based upon Lexmark's claims under the DMCA and copyright. The 6th Circuit opinion turned, in part, on the design of the Static Control chips.

Lexmark appealed to the full body of the 6th Circuit to rehear the case, and that request was denied in February 2005.

"I could not be any happier that justice is being served," said Ed Swartz, CEO of Static Control. "For nearly 900 days we have fought tooth and nail with this multibillion dollar company. We vowed at the outset that we would not back down or waiver, and we will see this battle to its very end."

On Dec. 30, 2002, Lexmark filed a lawsuit against SCC. In the suit Lexmark claimed that SCC's Smartek 520/620 chips violated the Digital Millennium Copyright Act of 1998.

"We have secured two victories in Ohio in the 6th Circuit, two victories in Washington, D.C. with the Copyright Office and Supreme Court and a victory in North Carolina's legislature. We are looking forward to going back to Kentucky with five victories under our belt."

According to SCC General Counsel William London, the impact of the Supreme Court's decision is significant.

"This decision should greatly simplify what is left of the Lexmark lawsuit. At the trial Lexmark will be forced to defend their anti-competitive activities without the distraction of Lexmark's baseless DMCA claims."

Static Control Components, which employs over 1,300 people in Sanford, N.C. accounts for over $300 million in annual sales. The primary market for Static Control Components is the laser toner cartridge remanufacturing market. Static Control supplies over 3,000 replacements parts to over 10,000 remanufacturers all over the world.