Court ruling loosens tech’s grip on consumers

Court ruling loosens tech’s grip on consumers
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The tight control that tech companies have over how consumers use their products may be in jeopardy following a Supreme Court decision on Tuesday.

Companies like Apple have long sought to retain control over their products after consumers buy them, with restrictions on the third parties that can repair and resell them.

Tech companies say those restrictions are important for protecting their reputation and the quality of their products. But critics say they often hurt consumers, forcing them to pay higher prices for older products and for fixes.

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The Supreme Court's ruling in a case involving printer cartridges, though, could mean big changes for tech, retailers and consumers.

The case focused on a dispute between Lexmark, a printer and toner cartridge manufacture, and Impression, a small, West Virginia-based retailer.

Impression would buy used cartridges, disable chips within them that prevented their reuse, refill them with ink, and resell them at discounted prices.

Lexmark argued that violated their patents, but the Supreme Court disagreed.

In a 7-1 ruling, the court said that once a patent holder sold their products, they no longer had authority to enforce how they were used.

That could mean new challenges for companies as varied as Apple and John Deere, which try to restrict consumers' ability to make repairs or changes after a purchase.

Consumer groups quickly hailed the ruling, saying its logic should be extended to allow the public to repair products without violating terms of service.

“The next logical step will be for courts to recognize that people who buy digital goods are owners of those goods, not mere licensees, and can resell and tinker with their digital goods to the same extent as purchasers of tangible property,” wrote Kit Walsh a staff attorney at the Electronic Frontier Foundation after the decision.

Consumers, for example, are often frustrated to find they cannot take their iPhone to a local store for repairs.

Apple declined to comment for this story, but has taken steps to push consumers and third parties from opening iPhones and other Apple products to make their own fixes. Each new version of the iPhone often makes it even more difficult or outright impossible to fix certain components without going directly to the company.

In states like Nebraska and Maine, where there is only one Apple store in the entire state, consumers sometimes make hourslong treks for certain repairs that can only be done by Apple.

The company did recently agree to no longer disable phones that had repairs of cracked screens.

John Deere has proprietary software that prevents users from being able to repair their own tractors. That led farmers in Nebraska to use Ukrainian software to hack into their tractors for maintenance.

The lawn and farm equipment maker also declined to comment. In 2015, the company made the case to the U.S. Copyright Office that individuals who buy their tractors don’t actually own them, but are licensing them from the company and thus don’t have the right to do their own maintenance.

John Deere argued that allowing consumers to access their software would “make it possible for pirates, third-party developers, and less innovative competitors to free-ride off the creativity, unique expression and ingenuity of vehicle software.”

The company went as so far as to say allowing individuals outside the company to access their software could lead to music piracy.

Apple and John Deere aren't alone. Samsung has also engaged in similar practices, along with Microsoft and others.

“This case definitively provides an answer on right to repair in regard to patent laws,” said Charles Duan, director of the Patent Reform Project at the advocacy group Public Knowledge.

Kyle Wiens, the CEO of iFixit, a group that wants to make it easier for owners to make repairs, said the decision could signal a new trend of courts being "hostile" to policies that restrict consumers.

Duan and Wiens cited an argument from Chief Justice Roberts in his opinion. Roberts said that if automakers had similar restrictions on parts and repairs, that could impose new headaches for consumers.

It’s unclear how companies would respond to the ruling, but Duan and Wiens said it could ease those restrictions on consumers. And it could be a boon for smaller businesses like resellers.

Duan, though, cautioned that companies still have other tools to keep control over their products, other than patents.

“They’ve just used clever sort of contracting principles. They’ve messed around with licensing versus ownerships. They have a fairly large toolbox to deal with right to repair laws,” he said.

And he said that while it may make it easier for individuals to make repairs or resell products, larger institutions like businesses and hospitals might not see those changes.

Companies would be reluctant to go after individual owners, Duan said. But, "for a hospital, though, it’s a lot easier for a manufacturer to use contract law to enforce these things.”

The court decision, though, won't be the last word in the fight over what consumers can do with their purchases.

Eight states, including Kansas, Wyoming, Illinois, Massachusetts, Minnesota, Nebraska, New York and Tennessee, are considering various right to repair legislation this year, which have the support of consumer advocates.

But manufacturers are vowing to fight back. The Consumer Technology Association, CompTIA, CTIA and others who represent tech and other manufacturers are lobbying against those state bills.