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The Digital Millennium Copyright Act: A Potent New Weapon in the Aftermarket Wars
For more than a century, original equipment manufacturers (“OEMs”) have sought, with only limited success, the aid of the courts to enforce restrictions against competitors' sales of products designed to complement or replace components of their proprietary technologies. At stake in each of these cases was a lucrative aftermarket for products directed to the OEM's patented technology and a “razor-and-blades” business model by which the OEM strove to attain a large installed user base for its equipment in hopes of “locking-in” customers to that aftermarket.
The products involved in these commercial skirmishes have been many and varied, and the restrictions at issue have been similarly diverse. See, e.g., Aro Mfg. Co. v. Convertible Top Co., 365 U.S. 336 (1961) (prohibitions of the repair or replacement of perishable components); Hewlett-Packard Co. v. Repeat-O-Type Stencil Mfg. Corp., 123 F.3d 1445 (Fed. Cir. 1997), cert. denied, 523 U.S. 1022 (1998) (single-use requirements); Surfco Hawaii v. Fin Control Sys. Pty, Ltd., 264 F.3d 1062 (Fed. Cir. 2001) (bars against modification or replacement of unused parts). Almost invariably, however, the OEM's claim of right arose under the patent laws, the notable exception being, in more recent years, the assertion of software copyrights to block the sale of competitors' compatible playback equipment, platforms or other interoperable products. See, e.g., Alcatel USA, Inc. v. DGI Techs., Inc., 166 F.3d 772 (5th Cir. 1999).
Although the 1988 Patent Misuse Reform Act permits a broad range of patent-leveraging practices, including the right to “condition [ ] the license of any rights to the patent or the sale of the patented product on the … purchase of a separate product,” 35 U.S.C. '271(d)(5), the ability of OEMs to compel adherence to lawful product tie-in conditions has remained spotty, at best. This circumstance is attributable to three principal factors: 1) unrestricted sales and the associated doctrines of patent exhaustion, implied license and right of repair; 2) the defenses of copyright fair use and misuse; and 3) the tendency of consumers to “cheat” on license restrictions by purchasing lower-cost or value-enhancing third-party components.
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