For more than two decades, Eric Smith has been growing his business and customer base, selling commercial printing supplies and toner cartridges to banks, hospitals, law firms and other businesses across West Virginia.
Smith's business model is simple. As the owner and manager of Impression Products, he contracts with companies and guarantees to supply and repair all of their printing equipment.
Since taking over the Charleston-area business from his father in 1992, Smith has supplied his customers with some of the best printing brands available, including HP, Canon and Lexmark products.
While Smith has turned a profit selling printing equipment and supplies from those brand-name companies, he also has run a brisk business purchasing, refilling and reselling empty toner cartridges produced by those same manufacturers.
For Smith, refilling used cartridges and selling them at lower prices than the brand new products was a logical business move, building upon his father's work of producing generic spools of ribbon for IBM typewriters.
About three years ago, though, Smith was contacted by Lexmark, the Lexington-based printing giant. The company ordered Smith to stop refilling Lexmark's patented cartridges and told him to hand over a list of his customers and a percentage of his profits from those reused products.
While roughly 50 other small printing supply companies that were warned by Lexmark relented, Smith rejected the company's legal ultimatum. He was convinced that he was within his legal rights and was willing to fight Lexmark, which ultimately sued him for patent infringement.
"I wasn't about to do that. I was going to have them put me out of business before I would back down to them," Smith said as he sat in his small office in Mink Shoals. "I really thought they were joking. I never thought I was breaking the law."
That decision has since placed Smith and Impression Products at the center of one of the biggest federal patent lawsuits in recent decades. The case, which resides in federal circuit court, has far-reaching implications and has captured the attention of more than the printing supply industry.
Some of the largest pharmaceutical manufacturers and medical device providers in the world have submitted legal arguments in support of Lexmark, to protect their vast array of patents. At the same time, corporate giants like LG Electronics, Intel, Samsung and Costco - companies with large international supply chains that could be impacted by similar patent infringement cases - have all submitted briefs in support of Impression Products.
Lexmark officials turned down an interview for this report.
"Unfortunately, Lexmark does not comment on ongoing litigation," said Jerry Grasso, Lexmark vice president of corporate communications.
The basis of the lawsuit deals with what is referred to as the patent exhaustion or first-sale doctrine, which essentially eliminates a company's legal control over patented products once they are sold. In the case of Impression Products, Lexmark argued that doctrine doesn't apply to used cartridges that Smith bought from suppliers in Canada.
That question of whether the exhaustion doctrine applies to products purchased overseas and sold in the United States has vexed federal officials. With the future of U.S. patent law hanging in the balance, the three federal judges overseeing the case decided to take an uncharacteristic step, calling an en banc, in which the case will be heard by every circuit court judge with experience in patent law.
"It's a very unusual proceeding," said Ed O'Connor, an attorney with the Los Angeles-based Avyno Law, who is representing Smith in the case. "This is historical already. Any companies that rely on selling products that can be reconfigured want to prevent that from happening,"
Unsurprisingly, O'Connor said he believes the court will rule in Smith's favor, but he expects that ruling to be appealed to the U.S. Supreme Court, no matter which side the verdict is on.
The weight and prominence of the case seems like an odd fit for a company that operates out of an unassuming office in Mink Shoals that looks more like a 1980s-style home than a place of business.
Smith said the lawsuit wouldn't even have occurred had he not purchased toner cartridges from the supplier in Canada.
For years, he said, cartridges were readily available in the United States. He had trusted suppliers from all over the country. But prior to Lexmark approaching him, Smith said, that supply chain "mysteriously dried up," forcing him to search outside the country.
While Smith said Lexmark was aware of his operation and similar businesses for years, he said it was that international purchase that gave Lexmark the ability to sue him in federal court.
"I think they have been aware of us for a long time. I am constantly buying cores that go into those printers," Smith said. "I hate to say we got caught, because I don't think we were doing anything wrong."
As he toured his office and warehouse last Wednesday, Smith said he is less concerned with becoming part of legal history than preserving his business and the jobs of his 22 employees. He's upset that Lexmark would resort to what he considers scare tactics and intimidation, instead of reducing its prices and competing with Impression Products in the market he serves.
With his refilled cartridges costing 50 percent less than many of Lexmark's newly manufactured products, Smith said, it shouldn't be surprising that many of his customers choose to buy the cartridges his technicians work on.
"They knew we were kicking their butts here," Smith said.
Shawn Nelson, an Impression Product's employee who retrofits the used cartridges, said he is glad that Smith took a stand against the Lexmark. Nelson, who has been with Smith since the 1990s, said he doesn't know what other job he could get if he was barred from reworking the used cartridges.
"What I've got here is a skill nobody else in West Virginia has," Nelson said, adding that maybe he could learn how to drive a coal truck.
Nelson and the other technicians at Impression Products pride themselves on being able to dismantle, refit and rebuild the cartridges that are about the size of an egg carton. They believe they know how to work on the cartridges better than any Lexmark employees.
Using battery-powered drills, tin snips and years of experience, Nelson and the other technicians are able to produce about 5,000 cartridges a month. Each one is tested in one of the dozen printers that are lined up on the workshops shelves to make sure it is working properly, and then it is placed inside inflatable packaging and locally made cardboard boxes to be shipped out to customers.
Smith likes to say that each cartridge gets some extra tender loving care, and he prides himself on the warranty he provides to his customers, which includes Charleston Newspapers.
"If we can't make our products as good as new, we don't make them," he said.
While Smith markets his cartridges, he said he's never forced customers to buy the cartridges that his employees refurbish, test and repackage. If customers decided to purchase the brand-new, higher-priced products from Lexmark or the other printing companies that he carries, Smith said, he provides that service.
As the lawsuit has played out, Smith has realized it is an anomaly that he finds himself wrapped up in this situation. But he isn't about to back down.
"When you're right, you fight," he said.
Reach Andrew Brown at andrew.brown@wvgazette.com, 304-348-4814 or follow @Andy_Ed_Brown on Twitter.