TELECOM Digest OnLine - Sorted: By Tearing Open That Cardboard Box, Are You Also Signing?

By Tearing Open That Cardboard Box, Are You Also Signing?

Monty Solomon (
Mon, 3 Oct 2005 02:34:15 -0400

By Tearing Open That Cardboard Box, Are You Also Signing on the Dotted Line?


Pay attention next time you rip open a cardboard box -- you may be
entering into a contract without realizing it.

A recent decision in the Ninth Circuit Court of Appeals reinforced the
right of companies, in this case Lexmark International, the printer
maker, to legally limit what customers can do with a patented product,
given that the company spells out conditions and restrictions on a
package label known as a box-top license.

Clickable license agreements are common practice in software, where
the buyer agrees not to tamper with the code or copy the program. But
slapping postsale regulations on patented goods could deny buyers the
ability to make modifications or seek repairs on other products as
well. Box-top licenses could also theoretically hinder third parties
from offering replacement parts or supplies for fear of a
patent-infringement lawsuit (meaning, for example, that a lighter
might have to be refueled only with the manufacturer's brand of

In the lawsuit, the Arizona Cartridge Remanufacturers Association, a
trade group of companies that sell refilled printer cartridges,
claimed that Lexmark was engaging in unfair and deceptive business
practices by promising price discounts on its laser cartridges if the
customer promised to return the empty cartridge to Lexmark.

Lexmark's packaging for laser cartridges sold under this system
(called the Lexmark Cartridge Rebate, or the Prebate program) includes
a label on the outside of the box stating: "Opening this package or
using the patented cartridge inside confirms your acceptance of the
following license agreement." Cartridges that are not part of the
Prebate program and not subject to the restriction are available to
customers as well, but without the discount. At the time of the case,
Lexmark estimated that cartridge returns had increased 300 percent
since the Prebate program began.

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