DCT

1:13-cv-21305

Blue Trading LLC v. Lexmark Intl Inc

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 1:13-cv-21305, S.D. Fla., 04/15/2013
  • Venue Allegations: Venue is alleged to be proper based on Defendant Lexmark’s substantial and continuous business activities in the district, including enforcement and licensing efforts related to the patents-in-suit.
  • Core Dispute: Plaintiff seeks a declaratory judgment that its business of collecting and reselling used, genuine Lexmark toner cartridges does not infringe Defendant's patents, primarily based on the doctrine of patent exhaustion.
  • Technical Context: The technology at issue relates to replaceable toner cartridges for electrophotographic (laser) printers, a high-volume consumables market central to the printer industry's business model.
  • Key Procedural History: The complaint alleges this action arises from threats by Lexmark to add Blue Trading as a defendant to a pending patent infringement lawsuit in the Southern District of Ohio (the "Ohio Action"). These threats were allegedly made in letters and emails from Lexmark's attorneys to Blue Trading's attorneys.

Case Timeline

Date Event
1993-02-26 ’032 Patent Priority Date
1993-10-29 ’169 Patent Priority Date
1994-08-09 ’032 Patent Issue Date
1997-05-27 ’169 Patent Issue Date
2010-08-20 Lexmark files patent infringement action in S.D. Ohio ("Ohio Action")
2012-07-13 Lexmark serves subpoena on Blue Trading in connection with Ohio Action
2013-02-05 Lexmark's attorneys send letter to Blue Trading alleging infringement
2013-02-25 Lexmark's attorneys send follow-up e-mail threatening to add Blue Trading to Ohio Action
2013-04-15 Complaint for Declaratory Judgment Filed

II. Technology and Patent(s)-in-Suit Analysis

U.S. Patent No. 5,337,032 - “Reduced Component Toner Cartridge”

The Invention Explained

  • Problem Addressed: The patent’s background describes prior art toner cartridges that employed a "toner pump" to meter toner from an upper chamber to a developer station below (Compl. ¶2; ’032 Patent, col. 1:10-14). This component added manufacturing cost, mechanical complexity, and could cause "unwanted pressure variations" and "torque fluctuations" that negatively affected print quality (Compl. ¶2; ’032 Patent, col. 1:36-44).
  • The Patented Solution: The invention eliminates the toner pump by reconfiguring the cartridge architecture. The primary toner chamber is located predominantly below the developer roller, and a constantly rotating paddle brings toner up to the developing station as needed (Compl. ¶2; ’032 Patent, col. 1:49-58). A toner applying roller is positioned horizontally to the developer roller, a configuration which serves to block excess toner from the chamber, thereby performing the metering function previously handled by the pump (Compl. ¶2; ’032 Patent, col. 2:20-24; Fig. 1).
  • Technical Importance: This design simplified the toner cartridge mechanism, which may have reduced manufacturing costs and improved reliability by removing a source of mechanical and pressure variations (Compl. ¶2; ’032 Patent, col. 1:36-44).

Key Claims at a Glance

  • The complaint seeks a declaratory judgment of non-infringement for all claims of the patents-in-suit (Compl. ¶26). U.S. Patent No. 5,337,032 contains two independent claims (1 and 7). The essential elements of independent claim 1 include:
    • An electrophotographic imaging toner cartridge comprising a developer roller
    • a doctor blade in contact with said developer roller near the top of said developer roller
    • a toner applying roller in contact with said developer roller and located on substantially the same horizontal plane as said developer roller
    • a chamber for electrophotographic toner positioned predominantly below said developer roller and on the side of said toner applying roller away from said developer roller

U.S. Patent No. 5,632,169 - “Self Powered Electronic Combination Lock Having Comprehensive Monitoring of Power Levels for Various Functions”

The Invention Explained

  • Problem Addressed: The patent describes conventional electronic locks as suffering from a number of drawbacks, including a dependency on batteries or external power, a lack of tamper-evidence, and an absence of sophisticated software features such as timeout periods after a correct entry or lockout modes after successive incorrect entries (Compl. ¶2; ’169 Patent, col. 1:26-65).
  • The Patented Solution: The invention is a self-powered electronic lock. A user generates power by rotating an outer dial, which drives generators that charge a capacitor bank (Compl. ¶2; ’169 Patent, col. 2:18-22, col. 4:1-4). A separate inner dial is used to select numbers for the combination, with the user's input being read by passive magnetic sensors that require minimal power (Compl. ¶2; ’169 Patent, col. 3:42-50). A microcontroller manages power levels, reads the combination, and, upon correct entry, activates a motor to move a cam that allows the lock's bolt to be withdrawn (Compl. ¶2; ’169 Patent, Abstract).
  • Technical Importance: The invention describes a combination lock with enhanced security and reliability by making it independent of external power sources and incorporating computer-controlled features to prevent common methods of unauthorized access (Compl. ¶2; ’169 Patent, col. 2:5-10).

Key Claims at a Glance

  • The complaint seeks a declaratory judgment of non-infringement for all claims of the patents-in-suit (Compl. ¶26). The ’169 Patent contains three independent claims (1, 7, and 13). The essential elements of independent claim 1 include:
    • A self-powered lock, comprising: a bolt capable of being extended from and withdrawn into the lock
    • means, responsive to entry of a correct combination, for enabling the bolt to be withdrawn
    • said enabling means having an "engage" position and a "disengage" position
    • means within the lock for storing energy
    • means for monitoring an energy level of the storing means
    • means, responsive to the monitoring means, for preventing the enabling means from moving from the "disengage" position to the "engage" position if the monitored energy level is below a given energy threshold

Multi-Patent Capsule: U.S. Patent No. 5,758,231 - “Venting Plug In Toner Cartridge”

  • Patent Identification: 5,758,231, "Venting Plug In Toner Cartridge," issued May 26, 1998 (Compl. ¶2).
  • Technology Synopsis: The patent addresses the problem of internal pressure buildup in a toner hopper, which can cause toner leaks (Compl. ¶2; ’231 Patent, col. 1:53-54). The solution is a venting plug with a labyrinth of chambers and a mat filter that allows air to pass to the outside while blocking toner particles from escaping (Compl. ¶2; ’231 Patent, col. 2:3-17).
  • Asserted Claims: The complaint seeks a declaration of non-infringement of "any valid claim" of the patent (Compl. ¶26).
  • Accused Features: Plaintiff's business of sourcing, acquiring, and reselling used genuine Lexmark toner cartridges (Compl. ¶¶4, 25).

Multi-Patent Capsule: U.S. Patent No. 5,758,233 - “Toner Cartridge With Locating [Surfaces] On Photoconductor Shaft”

  • Patent Identification: 5,758,233, "Toner Cartridge With Locating [Surfaces] On Photoconductor Shaft," issued May 26, 1998 (Compl. ¶2).
  • Technology Synopsis: The patent addresses the need for precise positioning of a toner cartridge within a printer (Compl. ¶2; ’233 Patent, col. 1:45-50). The invention uses the central shaft of the photoconductor drum itself as a primary locator, which rests on a V-shaped locator in the printer, ensuring accurate alignment between the cartridge's developer unit and the printer's internal components (Compl. ¶2; ’233 Patent, Abstract).
  • Asserted Claims: The complaint seeks a declaration of non-infringement of "any valid claim" of the patent (Compl. ¶26).
  • Accused Features: Plaintiff's business of sourcing, acquiring, and reselling used genuine Lexmark toner cartridges (Compl. ¶¶4, 25).

Editor's Note: For conciseness, multi-patent capsules for the 17 additional patents listed in the complaint (U.S. Patent Nos. 5,768,661; 5,802,432; 5,875,378; 5,995,772; 6,009,291; 6,078,771; 6,397,015; 6,459,876; 6,487,383; 6,496,662; 6,678,489; 6,816,692; 6,871,031; 6,879,792; 7,139,510; 7,233,760; and 7,305,204) have been omitted. The technology of these patents generally relates to mechanical and electrical features of toner cartridges, and the accused features for each are identical to those described in the capsules above.

III. The Accused Instrumentality

Product Identification

The complaint identifies the accused instrumentalities not as specific products, but as the Plaintiff’s business activities involving "used empty spent genuine toner and inkjet cartridges ('Cartridges') for resale Domestically and Internationally" (Compl. ¶4).

Functionality and Market Context

The complaint alleges that Plaintiff's sole business is the "collection and resale of used genuine used and empty spent cartridges, which are acquired following a Lexmark authorized sale" (Compl. ¶¶4-5). It explicitly states that Plaintiff "does not engage in the remanufacturing of cartridges or the manufacturing of cartridge parts," nor does it trade in "clone cartridges" (Compl. ¶4). The core accused activity is the sourcing and resale of authentic, used Lexmark products, some of which are acquired internationally and resold in the United States (Compl. ¶¶4, 21). No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint does not provide sufficient detail for a claim-chart analysis. As a declaratory judgment action filed by the accused infringer, the complaint does not contain infringement allegations or map any product features to patent claim elements. Instead, it makes a blanket denial of infringement of all claims of all 21 patents-in-suit (Compl. ¶¶15, 26).

The central dispute is framed as a legal question of patent exhaustion. Plaintiff Blue Trading alleges that its activities do not constitute infringement because any patent rights Lexmark held in the cartridges were exhausted by Lexmark's initial authorized sale (Compl. ¶16). This defense is asserted to apply regardless of whether the first sale occurred in the United States or internationally (Compl. ¶18). The complaint characterizes Lexmark's infringement allegations, made in pre-suit communications, as being based on the theory that importing cartridges first sold internationally for resale in the U.S. constitutes infringement (Compl. ¶21).

  • Identified Points of Contention:
    • Legal Question (Patent Exhaustion): The primary legal question is whether Lexmark's authorized sale of a patented toner cartridge exhausts all of its U.S. patent rights in that specific cartridge, thereby permitting subsequent resale and importation by third parties like Blue Trading. The complaint specifically raises the issue of whether patent rights are exhausted even when the first sale occurs outside the United States (Compl. ¶¶16, 21).
    • Factual Question (Product Provenance): A potential secondary factual dispute relates to the geographic origin of the first sale. The complaint notes that Lexmark treats all cartridges lacking a domestic sales receipt as having been first sold internationally, a standard of proof that Blue Trading disputes (Compl. ¶20).
    • Jurisdictional Question (Applicability of ’169 Patent): A threshold issue for U.S. Patent No. 5,632,169 is one of subject matter applicability. The complaint raises the question of how the resale of toner cartridges could create a justiciable controversy with respect to a patent directed to a "Self Powered Electronic Combination Lock" (Compl. ¶2; ’169 Patent, Title).

V. Key Claim Terms for Construction

The complaint does not provide sufficient detail for analysis of key claim terms. The dispute, as framed by the Plaintiff, is centered on the legal doctrine of patent exhaustion rather than a technical disagreement over the scope of any specific claim terms. Consequently, no terms are identified in the complaint as points of contention for claim construction.

VI. Other Allegations

  • Indirect Infringement: The complaint broadly denies that its business activities constitute indirect infringement, stating that it does not infringe "contributorily, by way of inducement, or under the doctrine of equivalents" (Compl. ¶¶15, 26). No specific facts supporting or refuting indirect infringement are alleged.
  • Willful Infringement: The complaint does not contain an allegation of willful infringement by Lexmark against Blue Trading.

VII. Analyst’s Conclusion: Key Questions for the Case

The resolution of this declaratory judgment action will likely depend on the court's answers to several key legal and jurisdictional questions, rather than a technical analysis of the products versus the patent claims.

  • A core issue will be one of international exhaustion: Can a patentee's U.S. patent rights be asserted against a genuine patented article that was sold by the patentee or with its authorization outside of the United States and subsequently imported for resale? This case was filed during a period of significant legal development on this issue, which was later addressed by the U.S. Supreme Court in Impression Products, Inc. v. Lexmark International, Inc.
  • A key jurisdictional question will be one of justiciable controversy: Particularly with respect to the ’169 patent, which is directed to an electronic lock, what specific facts support the existence of an "actual and justiciable controversy" between the parties sufficient to support a declaratory judgment action regarding that patent?
  • A potential evidentiary question will be one of burden of proof: In an exhaustion defense, which party bears the burden of proving the circumstances of the "first sale," and what level of evidence is sufficient to establish whether that sale occurred domestically or internationally?