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In a blow to printer company Lexmark International Inc., a federal appeals court overturned on Tuesday an order that barred a North Carolina company from making computer chips for ink cartridge replacements. The ruling by a three-judge panel of the 6th U.S. Circuit Court of Appeals in Cincinnati ordered a new round of hearings in the case pitting Lexmark and Static Control Components, a privately held company based in Sanford, N.C. Lexington-based Lexmark filed a lawsuit seeking to stop Static Control from competing for its remanufactured cartridge business. Lexmark accused Static Control of violating copyright law along with the Digital Millenium Copyright Act. U.S. District Judge Karl Forester issued a preliminary injunction in March blocking Static Control from selling computer chips that match remanufactured toner cartridges for Lexmark printers. Printer makers tend to make most of their profits selling replacement ink or toner cartridges for their machines. Lexmark tried to stop other companies from supplying cartridges for its printers by installing tiny computer chips in its cartridges. Without the chip, the printer usually won’t work. In response, Static Control designed a chip that enables replacement cartridges to work in the Lexmark printers. After Lexmark sued to stop Static Control from manufacturing the chips, the Sanford company filed its own lawsuit, accusing Lexmark of monopolizing the toner cartridge market and falsely representing their products. The appeals court concluded that Forester erred in determining that Lexmark “had a likelihood of prevailing” on its claims. “Because Lexmark failed to establish a likelihood of success on any of its claims, whether under the general copyright statute or under the DMCA, we vacate the district court’s preliminary injunction and remand the case for further proceedings,” Judge Geffrey Sutton wrote. Neither company issued an immediate response to the ruling. Judge Gilbert Merritt wrote a separate concurrence. U.S. District Judge John Feikens, who was also sitting on the panel, issued his own opinion that dissented in part with the ruling. Copyright 2004 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.

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