*NEWS*EPSON GOES AFTER 3RD PARTY INK CTGS
*NEWS*EPSON GOES AFTER 3RD PARTY INK CTGS
2006-12-06 at 11:48:00 am #17283
Epson goes after third-party ink cartridges and wins
Epson has won a series of victories in its quest to cut down on the importation and manufacture of aftermarket inkjet cartridges for its products.
The company just announced that it has signed settlement agreements with multiple defendants, all of whom acknowledge that they were in violation of Epson patents.Epson has been pursuing these companies for months, filing lawsuits against them in federal court and bringing a complaint with the US International Trade Commission early this year. Many of the companies involved have now decided to settle rather than fight the patent infringement charges. Artech (Germany), Ink Lab Co. (Hong Kong), InkTec (Korea), Inkjetwarehouse.com (Connecticut), and Rhinotek Computer Products (California) have all agreed to stop importing many kinds of aftermarket cartridges for Epson printers, a move that could make it more difficult to get inexpensive refill cartridges.In the federal court case, Epson charged a long list of defendants (many of whom have not yet settled) with patent infringement based on two patents: 7,008,053 and 7,011,397. Both patents cover minor technical innovations in the production of inkjet printer cartridges.In addition to the settlement agreements, three other companies have agreed to “consent orders” from the International Trade Commission that will prohibit them from importing the cartridges in question. In addition, an ITC judge has issued default judgments against eight other companies that did not respond to the accusations against them.Keith Kratzberg, Epson America’s VP for marketing, said in a statement, “We will continue to pursue the ITC action and the pending District Court lawsuit vigorously and take whatever other action may be necessary to protect Epson from unfair competition through patent infringement or the distribution of counterfeit ink cartridges.”Epson has been winning such cases around the world. In June, the company received a preliminary injunction from a Taiwan judge against U-Bar International over that company’s “Continuous Ink Supply System,” also on patent infringement grounds. Printer manufacturers traditionally follow the strategy made famous by Gillette, where the razor is sold cheaply (or at a loss) in order to make money on consumables like blades (or, in this case, printer cartridges). Because they have adopted this business model, manufacturers routinely try to prevent third-party companies from edging in on the consumables market.Epson’s current claims involve patent and copyright, though DMCA injunctions have been a favored tactic of other companies. Lexmark lost such a case several years ago when it implemented a trivial security system on its cartridges, then sued a third-party manufacturer for bypassing its proprietary “encryption.” A judge ruled against Lexmark, and Epson has elected to take a different approach with its legal strategy. So far, it looks to be working.
Epson Stops Ink-Makers
Lawsuits halt makers of replacement printer cartridges.
Fewer Epson-compatible ink cartridges from third-party manufacturers will be available, because the printer vendor has convinced a number of manufacturers and importers to stop producing and marketing them.
Last February, Epson filed a complaint with the U.S. International Trade Commission against 24 companies that manufacture, import, or distribute after-market ink cartridges for sale in the U.S. The complaint sought to ban the companies from importing or selling the cartridges in the U.S. At the same time Epson filed a lawsuit in the U.S. District Court in Portland against the same companies seeking damages for the alleged intellectual property infringement.Of the 24 companies, five have agreed to settle with Epson at both the ITC and district court. A further three companies have agreed with the ITC to stop importing cartridges, but will have their cases heard at the district court. Another eight companies have had default judgments filed against them at the ITC because they failed to respond to the complaint with the time allowed, said Epson. Trials against the remaining companies at the ITC will begin in January.
The settlements and judgments are the latest in a line of legal victories by Epson against third-party ink-cartridge makers, distributors and vendors.
In June, a court in Taiwan barred a local manufacturer of continuous ink supply systems from producing models for Epson printers after receiving a petition from the Japanese company. A month earlier Epson succeeded in getting four German online retailers of printer ink cartridges to stop selling a number of third-party ink cartridges designed for use in Epson printers.
The company won a similar legal action against a Japanese manufacturer in June 2005.
Printer makers like Epson typically rely on a business model that sees them selling printers at little or no profit, then making money down the line on ink cartridges and other consumable items. Epson sells its own replacement cartridges and licenses a number of companies to make and sell Epson-compatible products. The third-party vendors targeted by Epson have no relationship with the printer-maker and so it doesn’t directly gain from any of their business.Correction: Epson sells its own replacement cartridges, and a number of companies make and sell Epson-compatible products. Epson does not license companies to make and sell Epson-compatible products.
Epson takes steps to protect its ink cartridge business in the United States
When DailyTech last visited the “Inkjet Cartel,” Epson was taking US-based e-tailers to court over the sale of generic Epson-compatible ink cartridges. Epson was pretty confident that things would go in its favor given that it had successfully won cases against companies in Europe and Asia.Luckily for Epson (and sadly for consumers), the company’s winning streak has extended into the United States. The company filed complaints with the United States International Trade Commission (ITC) against 24 companies in February of this year. The infractions cited ranged from manufacturing aftermarket ink cartridges to importing ink cartridges from foreign countries for sale in the United States. Network World reports:Of the 24 companies, five have agreed to settle with Epson at both the ITC and district court. A further three companies have agreed with the ITC to stop importing cartridges, but will have their cases heard at the district court. Another eight companies have had default judgments filed against them at the ITC because they failed to respond to the complaint with the time allowed, said Epson. Trials against the remaining companies at the ITC will begin in January.Epson’s string of victories could lead other printer manufacturers to follow suit. The replacement inkjet market is a huge business for printer manufacturers and they are pulling out all the stops to protect their bread and butter. Hewlett-Packard was so depended on its ink cartridge business at one point that it was generating nearly all of the company’s profits.The tricks that the printer manufacturers have used to get customers tied into buying expensive OEM cartridges range from giving customers meager “starter” cartridges with printer purchases or including chips on the cartridges to prevent customers from using generics. And we can’t forget the ink cartridges that will report empty even though there is still plenty of ink left to print dozens of pages.But all of this is expected. Manufacturers are practically giving away inkjet printers, enticing customers with a low cost of entry. And then customers are hit in the wallet when it comes time to replace the inks cartridges.