EPSON GOES AFTER 3RD PARTY INK CARTRIDGES

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EPSON GOES AFTER 3RD PARTY INK CARTRIDGES

 user 2006-12-06 at 11:50:00 am Views: 45
  • #17071

    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.

    Sued Vendors
    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.

    Latest Settlements
    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.