Green Mountain Faces Pivotal Lawsuit in Canada Over Coffee Pod DRM
Here’s an interesting wrinkle in the ongoing saga of Green Mountain and its nutty plan to lock out competitors through DRM.
It seems one coffee roaster in Ontario is suing Green Mountain and alleging that the latter’s decision to use DRM on its next generation coffee pods amounted to anti-competitive practices.
Coffee Club has filled a $600 million lawsuit against Green Mountain, and as they told CBC: "First, their new brewers have what they claim to be 'proprietary technology' that rejects any single serve pods not authorized by them," a Club Coffee spokesperson told CBC News in an email. "Secondly, Keurig has used the threat of this lockout technology to coerce retailers into exclusive arrangements to sell only Keurig-controlled products."
Given the differences between US and Canadian law, this could prove to be a landmark case on DRM.
To recap the story so far, Green Mountain was at one time the leading supplier of single serving coffee pods and coffee makers, a position they secured through being first/best in the market (or at least early good) and a position which they protected through a patent. That patent expired in 2012, leading to many competitors nibbling away at Green Mountain’s market share by going after its customers.
Green Mountain responded to the competition by developing new machines which incorporated DRM in both the machines and the pods. Green Mountain was going to use DRM in much the same way that printer ink cartridges are designed to keep customers from buying third party cartridges.
That DRM has already been hacked, so it’s a non-issue in the US. There’s established precedent it’s legal for a company to reverse engineer the DRM on printer ink cartridges (Lexmark v Static Control Components) which would probably result in a win for Green Mountain’s competitors.
But in Canada it’s a different matter. As of late 2012 it is illegal to strip DRM in Canada, and I am not aware of any legal precedents which would necessarily limit the scope of that law from being misused in the same way that Lexmark tried to misuse the DMCA.
Unless I am missing a detail, this case could well set legal precedence in Canada, including in ways that could well affect ebooks.
image by scazon