This is one case where judge-made law has really impacted how business models are formed. Until 2017, the 'exhaustion doctrine' had Quanta Computers v. LG as its main precedent. Exhaustion is the point at which you have sold your patented stuff, and the consumer is using it as intended, so even though you maintain your patent on e.g. 'making/using ink cartridges', as soon as you sell them, the consumer can do what they want with them.
Quanta left some unfortunate uncertainty: once a seller had created a product that "embodies the essential features of the patents", and sold it, exhaustion kicked in. However, the printer/ink industry still argued that part of the inventive process was the customer (who fully owned the cartridges and printer) putting ink in cartridges and cartridges in printers. This was not meant as much to sue consumers but to bully ink resellers.
This all came to a head in the Supreme Court case Lexmark (linked below), on this exact question. In effect, the Supreme Court said "Once you sell the printer and ink, you're exhausted", under the argument that allowing Lexmark to sue ink resellers for patent infringement would clog commerce. They used probably the simplest argument in 'exhaustion' doctrine, the "first sale doctrine", which says that, once you sell your product, all IP around that product is exhausted with respect to that product.
This can get very confusing, because exhaustion is NOT about the actual methods of making ink, but about when a specific product--the ink cartridge you found in your grandfather's basement--is totally outside of the manufacturers control. Thank god, the Supreme Court has made it a lot harder to claim IP infringement in 'downstream' commerce, and I bet that the printer industry is currently changing its "free printer but ink costs its weight in platinum" model.
Not sure if there are other aspects of the business that make printer sellers inherently skeevy (the stories here tell me that it is part sleazy salesmanship, part lawyer-bullying), but this is definitely an industry that shaped its business model around using IP to threaten resellers so they could keep the margins on ink sky high.
This is entirely correct. Automation is a flash in the pan, making it easier for an expert to gather, process, and present information is much higher value. Unfortunately for the startup ecosystem, it has apparently become rote knowledge among investors that workflow = low-value, AI = 100x value, so the money is pushing entrepreneurs away from the more boring task of making tools for people to process knowledge while chasing fairy tales of turning millions of PDFs into an automatic gold mine...
Hi! I was the author of the original article, and I think your description here is extremely interesting. I have often called money a communication of social trust, but the information exchange on obligation is also an excellent conception (on top of a great run through the qualities of money). Would you mind if I repost your comment on the original blog?
Quanta left some unfortunate uncertainty: once a seller had created a product that "embodies the essential features of the patents", and sold it, exhaustion kicked in. However, the printer/ink industry still argued that part of the inventive process was the customer (who fully owned the cartridges and printer) putting ink in cartridges and cartridges in printers. This was not meant as much to sue consumers but to bully ink resellers.
This all came to a head in the Supreme Court case Lexmark (linked below), on this exact question. In effect, the Supreme Court said "Once you sell the printer and ink, you're exhausted", under the argument that allowing Lexmark to sue ink resellers for patent infringement would clog commerce. They used probably the simplest argument in 'exhaustion' doctrine, the "first sale doctrine", which says that, once you sell your product, all IP around that product is exhausted with respect to that product.
This can get very confusing, because exhaustion is NOT about the actual methods of making ink, but about when a specific product--the ink cartridge you found in your grandfather's basement--is totally outside of the manufacturers control. Thank god, the Supreme Court has made it a lot harder to claim IP infringement in 'downstream' commerce, and I bet that the printer industry is currently changing its "free printer but ink costs its weight in platinum" model.
Not sure if there are other aspects of the business that make printer sellers inherently skeevy (the stories here tell me that it is part sleazy salesmanship, part lawyer-bullying), but this is definitely an industry that shaped its business model around using IP to threaten resellers so they could keep the margins on ink sky high.
https://en.wikipedia.org/wiki/Impression_Prods.,_Inc._v._Lex....