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Press Release

Unanimous decision by the Supreme Court in favor of Static Control

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Static Control Mar 25 2014

Sanford, N.C. – (March 25, 2014) – A unanimous United States Supreme Court ruled Tuesday that Static Control could sue Lexmark under the Lanham Act (false advertising) arising out of Lexmark’s prebate program.

According to Actionable Intelligence, “…the Supreme Court held that Static Control represents the type of party the Lanham Act is designed to protect.”

Justice Antonin Scalia wrote the opinion adopted by all nine justices. “…Static Control adequately alleged proximate causation by alleging that it designed, manufactured, and sold microchips that both (1) were necessary for, and (2) had no other use than, refurbishing Lexmark toner cartridges. It follows from that allegation that any false advertising that reduced the remanufacturers business necessarily injured Static Control as well.”

Lexmark first sued Static Control in 2002. Lexmark was initially successful in having the trial court throw out Static Control’s counterclaims against Lexmark. The case went to trial in 2007 with a jury verdict in Static Control’s favor. After trial, Static Control successfully convinced the Sixth Circuit Court of Appeals to reinstate Static Control’s claims for Unfair and Deceptive Trade Practices and false advertising. Lexmark petitioned the Supreme Court to reconsider. The Supreme Court rejected Lexmark’s request.

Static Control’s claims against Lexmark are based, in part, on Lexmark falsely telling remanufacturers that remanufacturing “Prebate” cartridges was illegal. The Lanham Act, a federal statute, prohibits false advertising. The trial court initially rejected Static Control’s Lanham Act claim, but the Sixth Circuit reinstated it. Lexmark asked the Supreme Court to overrule the Sixth Circuit.

“We are extremely pleased the Supreme Court agrees Lexmark should be held accountable for its actions,” said President Bill Swartz. “I only wish Ed, our founder, my father, was here to enjoy this victory with us.”

“The Supreme Court’s unanimous decision should send a strong message to Lexmark,” said William London, Static Control’s General Counsel. “We plan to move forward with our false advertising suit against Lexmark and prove we were damaged by Lexmark’s false advertising.”

Static Control is the largest manufacturer of aftermarket imaging systems and components supporting genuine cartridge remanufacturers within the global laser and ink jet industry. Sales and distribution facilities are located worldwide. Research, development, engineering and manufacturing as well as global distribution are located at Static Control’s world headquarters in Sanford, North Carolina, USA. Static Control manufactures in-house more than 10,000 imaging products and offers a product catalog of more than 14,000 imaging products to the aftermarket industry.

Three men in business suits standing with their arms crossed

This image from early 2003 was taken shortly after Lexmark initially sued Static Control. From left to right: Bill Swartz, Static Control Founder Ed Swartz and William London, Static Control’s General Counsel.

Static Control executives standing in front of a government building

This image was taken on the footsteps of the Supreme Court in December 2013 when oral arguments were heard. From left to right: Dale Lewis, Static Control’s vice president of manufacturing and engineering; Joseph Smith, attorney with Bartlit Beck; William London, Static Control’s general counsel; Bill Swartz and Michael Swartz, co-presidents of Static Control.

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