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Lexington’s Steven Loy wins legal lottery, takes Supreme Court stage for Lexmark

KyForward, December 17, 2013
by Judy Clabes

While most eyes might glaze over at the thought of deep immersion into something like “Lexmark International vs. Static Control Components Inc.,” Steven Loy’s actually light up. The Lexington attorney is in fact animated by this “watching-paint-dry” legal case that landed him squarely in U.S. Supreme Court chambers facing a grilling by the country’s most powerful judges.

A daunting and unanticipated place for the Stoll Keenon Ogden attorney who never once considered his career path would take him to the highest court in the land.

Loy learned in June that the court had chosen to hear the case. From the perspective of the lawyer in him, Steven Loy had won the lottery (or was struck by lightning). For the boy from Adair County, it was a “Holy Cow” moment – as in “I’m going to the Supreme Court. Law is going to be made, and I am going to be part of that!”

Even in retrospect, he’s pinching himself.

The law-for-dummies version of what’s at stake is this: At issue is a technical one – a fine-print argument over who has “standing” to sue. It’s an important bottom-line issue for companies nationwide. Basically, when can false advertising claims be filed and by whom under a federal trademark law called the Lanham Act?

It started with a program Lexmark International announced in the late 1990s for laser printers generally sold to medium and large businesses. Today that program is known as the “Lexmark Return” program. The basic idea behind the program is to provide a way for Lexmark’s customers to return used cartridges to Lexmark so that Lexmark can remanufacture or recycle them.

Static Control of Sanford, N.C., fought that program and later claimed that Lexmark made false statements in connection with the program. A microchip helps to enforce the Return program. Static Control does not itself re-manufacture cartridges but it developed a replacement microchip enabling others to purchase the used cartridges, repurpose them, then sell them back to owners of the Lexmark printers. Static Control also sued Lexmark for false advertising.

It gets stickier legal-wise. There seems to be agreement that a direct competitor can sue. The question the Supreme Court agreed to consider was whether a supplier of parts to the indirect competitors (the re-manufacturers) has standing to sue.

And so began a lot of multifaceted legal maneuvering through federal courts in 2002.

Lexmark argued for strict, narrow standing; Static Control for a broader range of potential claimants.

In June, the Supreme Court agreed to hear the case, one of just 80 from the 10,000 it had to choose from.

Thus Loy saw his camel go through the eye of a needle as a result of a nearly incomprehensible confluence of circumstances. Nine federal circuit courts – including the Sixth Circuit’s finding in favor of Static Control – have addressed this very issue and they are evenly split three ways. Three lenient, three narrow (Lexmark’s position), and three categorical (only competitors can sue).

Because of these mixed signals, the Supreme Court apparently felt a need to clarify this issue once and for all.

Loy is an unassuming guy – as far from the “litigator” stereotype as a lawyer could get: Soft-spoken, even-tempered, laid-back, understated – with a boyish appearance and demeanor that belies a razor-sharp intellect and a fierce devotion to his client.

He has been an attorney representing Lexmark since the late 1990s as the company was emerging from its life as a part of IBM. He considers it an “honor to work for a successful local company – and fun to work with people” like those at Lexmark.

A graduate of the University of Kentucky College of Law, Loy was an undergraduate education major (his mom was a teacher) who opted for law school. His dad, Marshall, is a long-time lawyer in Columbia, home of Lindsey Wilson College where Steven spent his freshman year.

“As a young lawyer, I had grand notions of what could be done and what could be achieved, like most young lawyers,” Loy said. “But the Supreme Court? That’s beyond anyone’s expectations.”

In fact, his firm did some research: A Stoll Keenon attorney last argued before the Supreme Court in the 1930s; an Ogden attorney in the 1960s. The firms merged in 2006.

Being in those exalted chambers was “the most awe-inspiring experience I’ve ever had,” he says with more than a hint of the “purity of purpose” he attributes to young lawyers.

He speaks reverently as well of the confidence Lexmark invested in him. It isn’t often, after all, that the homegrown lawyer is the one who gets to go to the big show. Loy, 44, knew that and felt it was his obligation to offer that option to his client. He understood that with so much on the line, companies often seek experienced D.C. lawyers to take the reins when it comes to the nation’s top court.

Lexmark’s response: “Absoutely not.”

As Loy recounts the story, he readily admits his gratitude for this kind of loyalty.

“Stoll Keenon has been with Lexmark since we spun out of IBM in 1991, and I have personally worked with Steven Loy over a dozen years on various legal matters for Lexmark,” said Lexmark vice president, general counsel and secretary Robert J. Patton. “Steven is not only a very bright, exceptional attorney, he is also passionate about his representation of Lexmark and we are very grateful for his support including his recent appearance at the United States Supreme Court on behalf of Lexmark.”

Full steam ahead it was. Nonstop prep and intense focus. Wife Molly, a paralegal, was a full-time guinea pig for the oral argument as it took shape and focus. UK law professor Paul Salamanca, a constitutional law expert, was a valued adviser.

His firm’s team – Chris Thacker, Anthony Phelps and Monica Braun – and Brent Lambert, Lexmark’s chief intellectual property in-house counsel – were key strategists. Thacker, Braun and Lambert ultimately joined Loy at the defendant’s table in the court chambers, the maximum number allowed.

And then there was Dad, the lawyer held high as a role model by the son.

“As a boy, I remember my father taking calls all times of the day and night – and in a small community they were friends as well as clients,” he recalls. “And I remember him sort of figuratively putting his arm around those clients and saying, ‘We’re going to get through this together.’ That’s the lawyer I wanted to be.”

His dad, Marshall, had a reserved seat in the audience, along with Molly, his stepmom and his older sister.

His Lexmark “family” was there too, some out of retirement – his own “community” lending support.

“We worked hard, we were prepared – but we had decided that we would absolutely enjoy this unique experience. It’s one not likely to be repeated.”

The situation is very structured. One hour total. About 30 minutes for each side. Loy was first up and knew he should save a few minutes of his allotted time for rebuttal. He expected to be nervous. Turns out the butterflies went away once he was on the hot seat. He was focused, focused, focused – sticking to the narrow argument. Even the brief was really brief – only 40 pages handed over to the justices.

“I actually got four sentences into my argument before the questions started,” he said. The questions were aggressive and pointed – for both sides.

“The gravity of the room adds to the impact,” he says, “but the tone was conversational.” Despite his expectations, the time flew. Though he was able to cover his points, he said.

He had gone to D.C. early to get settled in and actually attended the previous day’s session. The day after, he decompressed with a visit to the Newseum – and getting as much rest as possible to recover from “mental exhaustion.”

Days after returning home, Loy was able to revisit the experience – listening to tapes of the proceedings. A kind of out-of-body experience, but then the whole thing was “surreal” – the grand courtroom, the justices, the high stage, the important legal issues.

Back home, he’s settling comfortably into his more laid-back routine, greeting guests and clients in the more casual attire he’s used to – sans tie and pretentions – and holding onto his normal demeanor. “I’m just not a suit and tie kind of guy,” he says with a smile.

Predictions? He has none. He and his team worked hard, studied hard, planned hard – and made the argument they wanted to make.

A decision will likely come in late spring.

“Now we wait.”