*ticking*
"That's right!"
Welcome to The Know, I'm Ashley Jenkins
And I'm Gus Sorola
Hey, so you know that EULA that you never read
time you buy a video game console or some other
other brand new gadget, the where it tells you that you're
gonna owe Sony or Nintendo your first born child
and 77 pounds of silver if you mess with your new
console in any way, well the supreme court may have
just paved the way for making those arguments
nonexistant. You don't have to read it if doesn't exist
In a new ruling that has some big implications for the tech industry,
the Supreme Court handed down a decision this week
that gives the rights of your hardware to you after you purchase it.
Whoa what a novel concept, weird right!?
Rather than the manufacturer merely just giving you a
license to use it.
So, hold on, you own the sh** that you buy now?
That's crazy talk
So this ruling actually opens the door to all kinds of things
Like repairing your consoles without sending them to
the manufacturer. Or better yet, for some consumers
legally modding them, well, sort of. That one's a little bit
trickier, but it's still a big legal step in that direction.
However, it could also pave the way, according to some
experts for changes in the ownership of all products
including digital goods like software, which would be
a much bigger deal for all those video games you own
or that you have a license to, right.
But, before we get to all the big implications for video
games and the other sectors of the tech industry, let's
first get to what the Supreme Court case actually is and
suprisingly enough, it's all about the exciting world of,
printer ink.
Well, people still use printer huh? Alright, the case itself
is called Impression Products, Inc. v. Lexmark International, Inc.
and it's had a long road in getting all the way to the
Supreme Court with a ton of tech companies throwing
their official support on both sides of the legal argument
Alright, so here's what it's all about, Lexmark, if you
didn't know, is a printer company that sells, duh, printers
but in addition to printers, they sell printer cartridges
which, if you've owned a printer, you know can be super
crazy, ridiculously, pricey every time you need to refill
your ink. Traditionally, Lexmark has given their
customers two ways to get new cartridges, buy a single
use cartridge that you discard when you're done, or
basically, do a subscription program or as they call it, a
return program, which lets you buy discounted cartridges
so long as you give them back when you're done. Now,
you know the drill if you've ever bought any kind of
technology, if it's a bunch of proprietary nonsense,
to keep you spending money, with only Lexmark,
or your printer ink needs.
"bing"
However one company found a way to eat into their
model. A West Virginia company called, Impression
Products started buying the discarded single use
cartridges, and selling modified versions of them so
they could be refilled by someone else besides Lexmark.
Lexmark didn't like that too much as you can imagine,
and ended up suing them for patent and copyright
infringement, and Impression Products didn't like the
didn't like the idea of being sued, so, it kicked it up the
chain of appeals courts. Their basic argument is, one
that many of us have said a lot of times ourselves
"Why shouldn't consumers be able to do what they want
with products they legally own?"
Because of that pretty meaningful issue, several
companies have jumped in on both sides of the dispute
Some big players have filed briefs on behalf of
Impression Products, and being able to own your own
sh**, including: Vizio, Dell, Intel, LG Electronics, HTC,
Cosco, and Western Digital.
And in Lexmark's corner, you'll find some of the
industries biggest patent holders, companies like:
Qualcomm, IBM, Nokia, Dolby, the ones who have a
financial interest in you not doing whatever you want.
I wanna say Cosco's the weird one in all of this
it's all tech companies and Cosco.
Well, look, Cosco sells so much stuff, they are
Huge market. Oh, no no, it makes sense, i get it, just
Cosco, it's like a really lame version of the airport
showdown in "Civil War" but it's all been kind of a big
deal because so many businesses, especially
in the tech space rely on the loss-leader model.
The loss-leader model meaning you take a hit on
something you sell to make more money on it in the
back-end as it's proprietary owner. It's actually exactly
how a lot of video game consoles work.That business
model, they hook you on a console, the manufacturer
barely makes a profit, or sometimes they lose money
on it in order to get more money from you in the long
term through subscription services or software;
The, "attach rate." Yes, and preserving the loss-leader
model was the position of many of those opposing tech
companies. They argued to the Supreme Court that if
you lessen the power of patents, and give companies
less control over their products after they're sold,
you potentially kill off a very valuable part of the market
Meanwhile, the other sides argued, "So what,
competition is a good thing, the more of it, the better."
Yeah, so how does the Supreme Court rule?
Overwhelmingly in favor of Impression Products, with a
vote of 7 to 1.
And the majority statement from the Supreme Court
left very little wiggle room for their interpretation
of the law, namely that once you buy something, it is
yours to do with as you please. As is common sense
I think. You would think so, yes but it's all those EULAS
I hope we find out who that one dissenter is later in the
article. Chief Justice John Roberts said, "Lexmark
exhausted its patent rights in these cartridges the
moment it sold them, a patentee is free to set the price
and negotiate contracts with his purchasers, but may
not by virtue of his patent control the use or disposition
of the product after ownership passes to the purchaser."
Robert's went on to say, "That product is no longer
within the limits of the monopoly and instead becomes
the private, individual property of the purchaser, with the
rights and benefits that come along with ownership."
Ah, not licensing, ownership. The opinion also says that
anyone who makes a purchase of a product is allowed
to re-sell it without fear of being sued for patent
and copyright infringement, which that one seems pretty
obvious it like, should've been the law, you know,
forever ago!? Sure. Again, that last piece, kind of
a big deal, patent and copyright infringement were two
of the big staples for how Sony eventually went after
Geohot following his hacking of the PS3, and the
subsequent breach of PSN, saying that, "even though
he owned the hardware, he was not actually free to do
whatever he liked, with the console. Hmm, to be fair he
also broke a bunch of other laws that would've
gotten him in trouble anyway, well, there is that, but
those were the key pieces of their complaint against him
So, in addition to ruling that a product is yours to do with
as you please, so congratulations, you now own your
console. (Yay) The Supreme court also, ruled that
whether or not it's purchased domestically or
internationally, which potentially means lower prices on
some technology here if you buy it from a third-party.
That's part of why Cosco jumped in, (Aha!), for support
of Impression Products. Theoretically major retailers
like Cosco, could buy tech products like TVs or Video
Game consoles, from around the world now, then bring
them to the United States and resell them to customers
Previously, patent holders were able to dispute this
under broad interpretations of patent law.
Alright, so, that's all well and good, very interesting, but
how does it matter to you, watching this at home or on
a toilet, or a bus somewhere (Hey toilets are at home!)
Wherever you happen to be. Dude, toilet watching is
a big deal. Well, the Electronic Frontier Foundation
which is a big boys for consumer and digital rights says
it's not only a big win for the right to own philosophy,
but also one for the right to tinker as well. Which if
you're wondering, that could extend to modding
hardware and products you purchase, so does this
mean you're legally in the clear if you want to start
hacking your console to sell pirated games? Not exactly.
Even if you don't have nefarious purposes in life
for console mods, the problem is so many of these
hacks are often combined with ways to circumvent
firmware, and getting around the firmware, is still
protected by DMCA. However, this does remove that
restriction from modding consoles it's just one less thing
they can slap on a civil suit. The most important thing it
does though, is to give you more variety to repair and
open the door for local repair shops to fix your consoles
for you, rather than sending them into Microsoft for six
weeks at a time. Unfortunately (you can send them
in anyway, we all know Microsoft is a red ring, but that's
anyone) Unfortunately, not gonna stop them from
sticking it in the EULA, even though the Supreme Court
has deemed it illegal, a manufacturer could still try and
slap you on the wrist for violating your contract with
them, since, signing the EULA is technically entering a
contract, but it's way flimsier than violating patent and
copyright law. Fortunately there are bills in the works
from state governments, like the right to repair act, that'll
go a long way toward this too. Thanks tractors! But
more importantly, the EFF also calls this an important
decision towards the same right to own philosophy
for digital goods as well, because, currently, the rights
for software are still considered to be non-transferable
licenses, you may own the disc, but you only license the
game that's on it. Oh, kay. That's why you can't resell
digital goods, because of previous legal precedents,
they're viewed as licenses, rather than tangible property
like anything else, however the EFF feels we're now a
huge step closer to changing this interpretation.
So, really important court case? Actually, stands to have
really big consequences for stuff you care about,
imagine that.
What do you guys think of the Supreme Court ruling in
favor of consumers actually owning their stuff, let us
know in the comments. And for future updates from the
offices of The Know, remember to like this video,
and subscribe to The Know if you're new around here.
We're not actually lawyers, dont. I'm a lawyer.
Can you have a law office and not be a lawyer?
Like, could you have a law office that's just...
I dunno. What if you just obeyed a law in that office?
Then it's a legal office. There ya-
I mean, all you have to do is hop over a bar.
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