This blog discusses how the Supreme Court resolved the issue of standing for certain counterclaims in a copyright case. Specifically, we discuss a case in which the defendant asserted false advertising claims after being sued for copyright infringement. Prior to the issuance of the Supreme Court decision, it was unclear whether the defendant would have “standing” to assert those counterclaims.
The case at issue was Lexmark International, Inc. v. Static Control Components, Inc., 572 U.S. ___, 134 S. Ct. 1377, 188 L. Ed. 2d 392 (2014). In Lexmark, the Supreme Court resolved the issue of standing for a false advertising counterclaimant. Standing represents the ability of a party to demonstrate that it is likely to be injured by the actions of another party, unless the court provides relief. This requirement ensures that courts are deciding actual controversies instead of issuing advisory opinions relating to theoretical injuries.
The Lexmark plaintiff was an ink-cartridge manufacturer that developed a recycling program for its cartridges to ensure that the used cartridges would be returned to the original manufacturer. The program utilized a microchip that would disable the cartridge in the event that another company refilled it. However, the defendant, a cartridge “remanufacturer,” developed its own microchips to defeat the plaintiff’s program.
The plaintiff filed a lawsuit contending that the defendant’s cartridges infringed the plaintiff’s copyrights. The defendant filed a counterclaim that alleged that the defendant’s recycling program constituted false advertising that violated the Lanham Act.
The plaintiff contended that the defendant lacked standing to enforce its false-advertising counterclaims because the party that was allegedly being injured by the program was the plaintiff’s customers, as opposed to the defendant. A district court and the Sixth Circuit agreed with the plaintiff. However, the Supreme Court reversed the Sixth Circuit and held that the defendant properly pleaded a Lanham Act violation.