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Static Control Supports the Right to Repair

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Static Control Feb 06 2024
Static Control recently submitted comments to the Federal Trade Commission (FTC) in support of a Right to Repair. ruling. Right to Repair is legislation that would allow consumers to repair their electrical or mechanical devices, be it a smartphone’s broken glass or the battery in a laptop. Consumer products such as electronics, printing products and even vehicles are becoming more complex, and many manufacturers have created systems preventing repairs outside of an authorized vendor or OEM.

Static Control has and always will defend the rights of the aftermarket. Here is the submission to the FTC:. 

Before the Federal Trade Commission Washington D.C.
Comments of Static Control Components. Inc.
in Support of Petition for Rulemaking of US PIRG and iFixit FTC–2023–0077
Static Control Components, Inc. (“SCC”) urges the Federal Trade Commission to initiate a rulemaking proceeding to promote and secure the right of consumers to obtain aftermarket components to repair and maintain the products they purchase, and the right of aftermarket companies to compete with OEM suppliers to produce those aftermarket components.

Background on Static Control

For 37 years, SCC has been a leading supplier of aftermarket parts and components for remanufacturing of printer toner and ink cartridges. Cartridge remanufacturing is a significant industry in the United States and worldwide. The current imaging aftermarket industry comprises approximately 100 domestic remanufacturing companies yielding $300 million annually. More than 90 percent of these companies are small businesses. In 2018, however, the imaging aftermarket in North America was substantially bigger, with an estimated $2 billion in cartridge sales. The primary reason for this decline lies with OEMs’ efforts to thwart aftermarket competition through misleading error messages and software updates that force consumers unknowingly to reject replacement cartridges manufactured by anyone other than the OEM.
For most of its history, SCC has fought against OEM attempts to limit the right to repair and remanufacture. SCC developed technology facilities capable of matching new OEM developments, and helped imaging companies access parts needed to remanufacture the most sophisticated new cartridges for the latest printers. Notably, SCC prevailed in litigation, lasting more than a decade – going twice to the U.S. Court of Appeals for the Sixth Circuit and to the Supreme Court – to secure the right of fair competition against unfounded claims that remanufacturing violates intellectual property rights under patent, copyright, and trademark law and under the Digital Millennium Copyright Act. See Lexmark Intern. v. Static Control Components, 572 U.S. 118 (2014); Lexmark Intern. v. Static Control Components, 387 F.3d 522
(6th Cir. 2004).
Benefits of Remanufactured Cartridges
Remanufacturing of toner cartridges produces substantial economic and environmental benefits. Remanufacturers reclaim used cartridges that otherwise would be relegated to landfills, repair or replace worn or broken parts, refill them with toner and ink, and then resell them as remanufactured at substantial discounts. Remanufactured cartridges have been proven to be as effective as OEM cartridges. In fact, replacement parts can be more robust and more reliable than the original parts, and SCC has offered software innovations on its replacement cartridge chips that improve or prolong cartridge performance.
Remanufactured cartridges are sold at a much lower price point than OEM cartridges, often saving more than 40% of a brand-name cartridge. Remanufactured cartridges provide consumers with a similar experience as an OEM in performance and page yield but with the added benefits of a lower price point and the environmental benefits of keeping plastics and other materials out of landfills and minimizing the carbon footprint of the product.

Remanufactured cartridges are the clear eco-friendly choice over new OEM cartridges.
Studies show that the plastic core of a toner cartridge can be reused for remanufacturing on average 3.5 times. Remanufacturers typically can reclaim or refurbish 97% of the parts of a used cartridge.

In the United States alone, over 350 million laser and ink printer cartridges end up in a landfill or are incinerated each year. Each discarded laser cartridge adds approximately 2 pounds of metal and plastic waste to our landfills -- waste that could take 1,000 years to decompose. The carbon footprint of a remanufactured cartridge is approximately 2.8 kg, which is 2 kg (46%) lower than that of a new cartridge. In addition, the large number of reused components in the remanufacturing process significantly reduces the carbon impact of the production of components. This feeds through to packaging, transport, and energy use.

Moreover, many OEM cartridges will signal to the consumer that the cartridge needs to be replaced before the cartridge is in fact empty. Remanufactured cartridges may not prematurely require replacement, thus avoiding significant toner waste and allowing consumers to print more pages than with the OEM product.

Right to Repair Regulation Can Remedy Unfair Competition
The remanufacturing industry has been in decline over the last decade largely due to unfair competition by the OEMs. The printer industry follows the razors/razor blade model of selling the printer for a low price, and reaping inflated profits on consumable cartridges. At the time of purchase, consumers get their first cartridge included with the printer, and receive no information as to the total cost of ownership over the life of the printer. Most consumers presume that they can reduce that cost by buying aftermarket cartridges. In reality, OEMs deploy a variety of tactics to actively deter and thwart aftermarket competition.
The most pernicious of these involves firmware. Firmware on the printer at time of purchase may contain “time bombs” that will activate at a later time to alter printer functions – such as to preclude use of non-OEM cartridges, or disable certain printer functions when cartridges run low or when aftermarket cartridges are present. Such firmware changes also may be delivered on microchips located on new OEM cartridges that, when installed, will prevent future use of non-OEM cartridges. Other OEMs push firmware changes over the Internet to consumers who may have unknowingly agreed to accept them in the guise of “eco-friendly” subscriptions; and many consumers have had to accept terms allowing all firmware updates when installing OEM cartridges or obtaining other services from the OEM. As one example, within the last two years HP has pushed five or more new firmware updates for the HP 258A/X cartridge that lock out aftermarket cartridges.

OEMs also commonly display nefarious-sounding warning messages on printers when the user attempts to install a replacement cartridge, such as “Use only genuine cartridges” or “Non-genuine cartridge detected.” Some have included statements in their marketing materials suggesting that non-OEM cartridges may void warranties, potentially in violation of the Magnuson-Moss Act.

OEMs also use technological measures to deter or prevent access to printer cartridge data and functions. While litigation and proceedings before the Copyright Office have clarified that it is lawful to circumvent these measures to facilitate printer and cartridge diagnostics, maintenance, and repair, the continuing deployment of ever-more-complex technological measures deters, delays, and increases the costs of lawful competition.

A Regulatory Solution Is Necessary and Appropriate
Litigation has not curtailed OEMs’ efforts to trammel the rights of consumers and competitors. SCC defended a legal battle over more than a decade to help secure the industry’s right to compete and the right of consumers to benefit from remanufactured cartridges.

Notwithstanding, several printer manufacturers remain emboldened to launch more invasive stratagems to deny consumer access to less expensive and more ecologically sound aftermarket alternatives. Several class action lawsuits have been filed over the past few years to address certain of these abuses. However, these lawsuits are inefficient and incomplete remedies for the OEMs’ misconduct. Thus, SCC supports the FTC launching a rulemaking proceeding to address OEM’s anti-consumer, anti-ecological, and anti-competitive conduct.

Several potential solutions that the Commission could consider could include:
  • prohibitions on business practices that preclude consumer use of aftermarket cartridges;
  • restrictions on application of technological protection measures to limit or preclude cartridge remanufacture; and,
  • advance prominent disclosures --
    • that use of aftermarket cartridges will not breach the manufacturer’s warranties,
    • that manufacturers policies permit use of aftermarket remanufactured cartridges, and,
    • of the anticipated total cost of ownership using OEM vs. remanufactured replacement cartridges.
SCC thanks the Commission for its consideration of these Comments, and we remain available to address any questions the Commission may have.
Respectfully submitted,
Elizabeth McKee                                                        aSeth D. Greenstein
General Counsel                                                         Constantine Cannon LLP
Static Control Components, Inc.                                1001 Pennsylvania Ave. NW
3010 Lee Avenue                                                        1300N
Sanford, NC 27332                                                     Washington, D.C. 20004
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