during printing: when the calculations indicated that the original supply of Lexmark toner should be exhausted, the printer would stop functioning, even if the cartridge had been refilled. In addition, if the chip did not perform an encrypted authentication sequence, or if the Toner Loading Program on the chip did not have a checksum matching exactly a value stored elsewhere on the chip, the printer would not use the cartridge. In 2002, SCC developed its own computer chip that would duplicate the 'handshake' used by the Lexmark chip, and that also included a verbatim copy of the Toner Loading Program, which SCC claimed was necessary to allow the printer to function. A Prebate cartridge could successfully be refilled if Lexmark's chip on the cartridge was replaced with the SCC chip. SCC began selling its "Smartek" chips to toner cartridge rechargers. Copyright and DMCA claims: 2004 Circuit Court ruling At the district court On December 30, 2002, Lexmark sued SCC in the United States District Court for the Eastern District of Kentucky. The suit claimed that SCC had: violated copyright law by copying the Toner Loading Program, and violated the DMCA by selling products that circumvented the encrypted authentication sequence between the Lexmark cartridge chip and the printer. On March 3, 2003, Judge Karl S. Forester granted a preliminary injunction to Lexmark, blocking SCC from distributing its cartridge chips. The ruling was seen to be controversial. On the copyright claim, the court found that: the use of the Toner Loading Program was indeed a likely copyright violation, because the Toner Loading Program was not a "lock-out code" that SCC was entitled to copy under the DMCA, and because the Toner Loading Program could be rewritten in different ways (and therefore had enough creativity to qualify for copyright protection). the Copyright Office's decision to grant copyright registration to the two programs showed that the programs were probably copyrightable. because of the complexity of the authentication system, SCC could not have known that it could bypass the authentication without using Lexmark's copyrighted program; but it held that this did not matter because "Innocent infringement, however, is still infringement." fair use did not apply. On the DMCA claims, the court found that the SCC microchip circumvented Lexmark's authentication sequence, and that the reverse engineering exception to the DMCA did not apply, because it only covers the independent creation of new programs that must interoperate