Digital Rights Management Software and the Printer Hardware Business

HP reopened a new front in the controversy between the printer hardware business and digital rights management software when it reportedly downloaded digital rights management software to customer printers as a recent security update.  Fortune reported that HP’s actions were first recognized by a Dutch printer cartridge vendor after some 1000 customers contacted the company to inquire about the sudden problem.

The controversy received national attention when the Electronic Frontier Foundation (“EFF”) went public with its concerns and published a letter to HP.  A link to EFF’s letter is published here.  A story published by Tech Crunch on the controversy is linked here.

The publicity surrounding the controversy has reportedly already prompted HP to “reach out” to EFF and do some public back-peddling on the issue.  Wired is reporting that HP has said it will release an “optional firmware update” that will remove the software within the next two weeks.  The Wall Street Journal actually published an interview with HP, where the company apologized for “how it handled” the software update but at the same time indicated that “HP would continue such practices, which may prevent some third-party supplies from working.”

The whole episode calls to mind the Lexmark lawsuit filed against Static Control challenging the circumvention of Lexmark’s printer DRM software, which I once wrote about in a New York Law Journal publicationWired likewise referenced the Static Control case, which Lexmark ultimately lost, and reported that Lexmark simply changed its strategy and pursued and won its next case on patent rather than copyright law grounds.

According to Wired, this whole controversy has been driven purely by HP’s bottom-line: revenues in its printing business are incrementally dropping, as are sales in printing supplies.  HP is trying to preserve its revenue share in the industry for as long as possible.  However, as EFF clearly articulated, HP runs the risk of losing its existing customer base in the process.  HP’s efforts at damage control suggest that the company has recognized that there is a fine line that they are walking between preserving a revenue share and sending customers elsewhere.

Will this controversy open a new legal front over the use of digital rights management software with printing cartridges?  This episode suggests that printer companies would still like to put out of business competitors on the cartridge supply front, and ensure that their customers buy their “authentic” cartridges only.  With that in mind, why wouldn’t they pursue new legal routes to the same end?

In the current situation, however, HP has apparently relented to some degree and has said it will be making available an update, and Wired is reporting that the Danish manufacturer has already designed new chips to circumvent HP’s security update, so one way or another, customers should be able to go back to using third party printer cartridges in the near future.  Whether the next stop for HP will be to pursue the issue in litigation is yet to be determined.  The Silicon Valley Software Law Blog will keep you posted of any new developments as they unfold.

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Kristie Prinz