The US Supreme Court made a unanimous ruling today in a legal dispute that originated from a controversial use of the Digital Millennium Copyright Act (DMCA) more than a decade ago.

Printer manufacturer Lexmark sold cartridges under a "prebate" program, offering consumers a discount if they would agree to return their empty cartridges to Lexmark and not competing "remanufacturers." It enforced the program with a microchip on each cartridge that prevented the empty cartridges from working again until the microchip was replaced by Lexmark.

However, a company called Static Control Components (SCC) figured out how to make microchips that would send out the same signal and allow for printer cartridges to be refilled and reused without going through Lexmark's official process. That led Lexmark to sue Static Control in 2002; Lexmark said the company violated the DMCA.

Lexmark also shot out a barrage of letters to companies in the business of refilling their cartridges, letting them know that using Static Control microchips was a violation of copyright law. Essentially, Lexmark sued SCC and made it a point to let just about every SCC customer know that it thought the company was a lawbreaker.

But Lexmark was wrong. An appeals court found that SCC's business didn't violate copyright law. Even though Lexmark's copyright claims had failed, SCC was still very interested in pursuing its own counterclaim against Lexmark for false advertising. The letter-writing campaign had damaged SCC's business reputation by "leading consumers and others in the trade to believe that [Static Control] is engaged in illegal con*duct.”

That counterclaim has been dragging through the courts for years now, in part because different courts have applied different tests for who can bring false advertising claims. Do you have to be a direct competitor of the false advertiser or merely in their "zone of interest?"

Finally, the Supreme Court agreed to clear up the issue. With a 9-0 ruling published today, the court has adopted a relatively lax test based on the idea that companies in a similar "zone of interest" may have a reason to sue over false ads, even if they're not competitors.

The high court didn't address the copyright issue, which was resolved in SCC's favor years ago and is no longer part of the case.

Justice Antonin Scalia wrote for a unanimous court:

Consider two rival carmakers who purchase airbags for their cars from different third-party manufacturers. If the first carmaker, hoping to divert sales from the second, falsely proclaims that the airbags used by the second carmaker are defective, both the second carmaker and its airbag supplier may suffer reputational injury, and their sales may decline as a result. In those circumstances, there is no reason to regard either party’s injury as derivative of the other’s; each is directly and independently harmed by the attack on its merchandise.
It's a somewhat unusual ruling considering that the conservative-leaning court isn't often inclined to open the door to more lawsuits. In many arenas, including class-action cases and sex-discrimination lawsuits, the high court under Chief Justice John Roberts has narrowed what types of claims plaintiffs may bring.

Notably, the only additional plaintiffs coming from this ruling will be companies, not individuals. Lanham Act false ad lawsuits like this one are only available to businesses operating in the commercial space. So while there may be slightly more legal disputes in this area between competitors, there's no chance of a flood of lawsuits from consumers over false ads.

The case today was only over standing—in other words, whether Lexmark can be sued. The Supreme Court didn't consider the actual evidence of false advertising or the copyright issues that led up to it. The ruling simply means that SCC will be able to make its full case in court.