US GOV TO STOP SALE OF COMPATIBLE INKS ?
US GOV TO STOP SALE OF COMPATIBLE INKS ?
2007-11-12 at 11:52:00 am #20865
US Government is about to Eliminate Competition in the Sale of Epson-Compatible Inks’ Says Paul Roark
public needs to be made aware of a very anticompetitive, anti-consumer
action about to be taken by the U.S. government’ writes Mr. Roark, a
Retired Federal Trade Commission attorney, in his Op-Ed article.Susan
Schwab is the US Trade Representative who’s signature is required on or
before December 19, 2007 to enact this law.
November, 2007 –
‘The public needs to be made aware of a very anticompetitive,
anti-consumer action about to be taken by the U.S. government’ writes
Mr. Paul Roark, a Retired Federal Trade Commission attorney, in his
Op-Ed article.”It appears the fate of competition in the market for
Epson-compatible inks is in the hands of the U.S. Trade Representative,
if she does not act to stop the implementation of International Trade
Commission (ITC) matter 337-TA-565,” says Mr. Roark who uses specialty
black and white inks in his color EPSON printer that are manufactured
by a small innovative company in America. “The ability of other
companies to sell ink to consumers of Epson inkjet printers may be
blocked by the U.S. government and this would in effect, subsidize
Epson’s efforts to monopolize Epson-compatible ink sales by excluding
inkjet cartridges from importation into the U.S.,” warned Paul Roark.
prices of Epson inks in its cartridges are vastly higher than the
competing ink options. In addition to the pre-filled, competitive
cartridges, many use easily-refillable, third-party cartridges or
continuous flow ink systems and buy ink in bulk, such as 4 oz. bottles.
When bought in bulk, the prices for competing inks are about 1/10th
that of what consumers pay for Epson inks.In addition to the huge price
differential, the competitive options that allow the use of bulk inks
do not cause the environmental problems associated with consumers
throwing the small cartridges into our landfills. These options also
will likely be eliminated by this ITC action.”While some have claimed
that third party inks are inferior, this is simply not true in many
cases,” said Mr. Roark. “In the small black and white, monochromatic
ink market where I am most active the non-Epson inks are superior to
Epson options”, he added. “Epson makes no product that can equal the
image quality, stability and lightfastness of the carbon inks I use for
my fine art, black & white photographic prints, and the inks I use
are far cheaper,” he commented. U.S. companies have for years made very
lightfast pigmented inks available for entry level printers where Epson
sells only fast-fading dyes. In short, there are small, innovative U.S.
companies that sell superior products for less. These companies are at
risk of being put out of business by the combination of Epson’s
anticompetitive practices and the U.S. government.
The ITC Epson
inkjet cartridge matter, now pending before the U.S. Trade
Representative, is part of Epson’s attempt to prevent others from
entering into aftermarket ink sales for its printer base. Mr. Roark
opined, “Epson is using its patents over the interface between the inks
and printers to accomplish this.” He added, “Even assuming these inkjet
cartridge patents are valid, this is, in effect, an illegal “tying
agreement” that ties subsequent sales of inks to the sale of the
printer.” Tying agreements have been prohibited by the antitrust laws
for many years, although the burden of proving an illegal tying
agreement has been made much more difficult in recent years.
Realistically, small competitors and consumers simply cannot afford the
legal fees and years of litigation such matters now involve.
Nonetheless, where a government agency is called on to exercise
discretion, the fact of the likely illegal conduct and the larger
competitive picture should be considered. Sadly, the plight of
competitors and consumers who were never parties to this action may
never have come to the attention of the decision makers. “The U.S.
Trade representative needs to consider these factors when she makes her
decision,” said Mr. Roark.
“From a legal standpoint, there are
cases that deal with these concepts,” said Mr. Roark. “The Ninth
Circuit Federal Court of Appeals in Image Technical Services v. Eastman
Kodak (125 F.3d 1195 (1997)) addressed for the first time the
relationship of intellectual property rights and the antitrust laws,”
he added. The court held that a monopolist who has achieved a dominant
position through its patents and copyrights can nevertheless be held in
violation the Sherman Act by exploiting that dominant position to
attain a monopoly in another market. As a subsequent court noted,
“Properly viewed within the framework of a tying case, (Image Technical
Services) can be interpreted as restating the undisputed premise that
the patent holder cannot use his statutory right to refuse to sell
patented parts to gain a monopoly in a market beyond the scope of the
patent.” (CSU v. Xerox, 203 F.3d at 1327) Also in Atari Games Corp. v.
Nintendo of AM., Inc.: “(A) patent owner may not take the property
right granted by a patent and use it to extend his power in the
marketplace improperly, i.e., beyond the limits of what Congress
intended to give in the patent laws.” (897 F.2d 1572, 1576 (Fed. Cir.
1990)) In the full text if his Op/Ed published on hios website Mr.
Roark urges interested individuals to read the excellent article on
this subject by Nicholas Economides and William Hebert that can be
found through a link on the full text of his op/ed.
consumers as well as many businesses use printers that might be
affected and they need to be aware of the problem and convey their
concerns to the policy makers involved” said Mr. Roark. “Using dubious
patents to monopolize adjacent markets, and having the ITC help in this
effort is not what Congress had in mind when these legal regimes were
put in place” he added. “Susan Schwab is the US Trade Representative
who’s signature is required on or before December 19, 2007 to enact
this law” said Mr. Roark who is urging consumers and small businesses
that may be affected to contact her with their concerns. “Her office is
at 600 17th Street, N.W., Washington D.C. 20508 (202) 395-3063,” he
Mr. Roark believes strongly that consumer opinions in
this matter may make a difference and urges anyone who is potentially
affected to read his entire op/ed which can be downloaded at
http://paulroark.com/Epson-ITC-Draft-Letter-2.zipPaul Roark is a former
US Federal Trade Commission antitrust attorney residing in Solang, CA
where he is known today as a photographer assisting other interested
photographers in using carbon based inkjet inks in EPSON printers. His
work can be seen at http://www.PaulRoark.com