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 user 2009-08-11 at 12:51:03 pm Views: 49
  • #22621
    Accusations of Snooping in Ink-Cartridge Dispute
    Reseller Claims Seiko Epson Sent a Spy to Its Warehouse; Latest Dust-Up in Fight Over Printer Patents
    cartridges have long been a subject of legal dispute, with printer
    makers suing smaller companies to clamp down on knock offs. But it is
    rare that such fights include allegations of corporate espionage.That’s
    the situation playing out now in an Oregon federal court, where Green
    Project Inc., a small ink-cartridge reseller, claims that Seiko Epson
    Corp., one of the world’s three biggest printer makers, sent an
    investigator disguised as a customer to snoop around the company.A
    Seiko Epson lawyer said the company sometimes uses investigators to
    enforce its patents. He declined to comment on the Green Project suit’s
    details, but said “we believe nothing was done wrong here.” Herbert
    Seitz, the man who Green Project says was an Epson investigator, said
    Monday he is unfamiliar with Green Project’s allegations. “I have
    nothing to say,” he said.

    The alleged incident began with a
    lawsuit that Seiko Epson filed in April against Green Project, which
    refills and resells old ink cartridges, and other cartridge resellers.
    But the suit has roots in a much broader battle.At issue is that big
    printer makers — including Seiko Epson, Hewlett-Packard Co., Lexmark
    International Inc. and Canon Inc. — rely heavily on ink and toner
    sales to generate profits. For years, the manufacturers have tried to
    stop smaller companies from cutting into their revenue by selling their
    own cartridges, arguing in lawsuits that some violate their patents.

    Project, which was founded last year, and other “remanufacturers” of
    printer cartridges accounted for more than $8 billion in global sales
    of inkjet and laser cartridges last year, according to Andy Lippman, an
    analyst at Lyra Research.In recent years, Seiko Epson has taken legal
    action against companies that import cartridges to sell in the U.S. In
    2007, responding to a complaint by the Japanese company, the U.S.
    International Trade Commission ruled that certain imported cartridges
    violate Seiko Epson patents and ordered vendors to stop importing them.
    In a followup ruling last year, the ITC said that imports of certain
    “remanufactured” cartridges also violate Epson patents.

    April, Seiko Epson sued a number of companies that it alleged were
    violating the import ruling. One was Green Project.Joseph Wu, Green
    Project’s founder and president, denied the company sells cartridges
    that were originally sold overseas. He said Green Project buys used
    printer cartridges that were sold in the U.S. from brokers that collect
    them; they are then shipped to China, where they are refilled and sent
    back to the U.S. for sale, he said. The brokers guarantee in writing
    that the cartridges are collected in the U.S., Mr. Wu said.

    May, about a month after Seiko Epson filed its suit, Mr. Wu said a
    customer who identified himself as “K.C. Wells from K&R Supplies”
    came to Green Project’s offices. Mr. Wu said he was suspicious, since
    he had met the man at a trade show a few years earlier and heard him
    ask “detailed questions most customers don’t ask” about cartridge
    technology.Mr. Wu said he remained suspicious and days later did a Web
    search for “Seitz,” since he had heard there was a cartridge-fraud
    investigator that worked for Epson with that name. He said he found a
    photo that looked like his visitor.

    Last month, Mr. Wu’s company
    countersued Seiko Epson, claiming that Mr. Seitz’s actions constituted
    trespassing and theft of trade secrets. The suit seeks to prevent Seiko
    Epson from using the information collected, as well as restitution. It
    also seeks a declaration that certain Seiko Epson patents are
    invalid.Mr. Seitz’s “misrepresentation and subsequent entry into Green
    Project’s warehouse constitutes trespass,” the company’s lawyer wrote
    in a July 27 court filing. Green Project also alleges that Mr. Seitz
    improperly accessed company trade secrets when he requested a price

    Seiko Epson lawyer Harold Barza said that “in connection
    with the enforcement of intellectual property rights, we sometimes have
    to use investigators. It’s a perfectly normal practice.”Mr. Barza said
    that while Mr. Seitz has “done investigations before” for Epson
    , he is
    an independent contractor, not an Epson employee.Whether Green
    Project’s allegations would sway a court is unclear. “There’s a raging
    debate” in the legal community over ethical guidelines for information
    gathering, said Patrick Robbins, a defense lawyer at Shearman &
    Sterling LLP who sometimes uses private detectives.Mr. Robbins said
    courts have offered little clarity on whether it is acceptable to use
    deception to obtain information.