Hp Sues Co For Misappropriating Master Key Codes For Ink Cartridges

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Hp Sues Co For Misappropriating Master Key Codes For Ink Cartridges

 user admin 2014-06-26 at 12:15:19 pm Views: 637
  • #3225

    Hp Sues Co For Misappropriating Master Key Codes For Ink Cartridges
    HP Sues Datel For $30M Over Printer Trade Secrets Theft

     By Kurt Orzeck

    Law360, Los Angeles (June 24, 2014, 7:12 PM ET) — Hewlett-Packard Co. launched a $30 million trade secrets suit Monday in California federal court, accusing Datel Holdings Ltd. of misappropriating HP's master key codes in its printers and selling ink cartridges compatible with HP printers, which are only supposed to authenticate HP ink cartridges.

    HP claims Datel, whose subsidiaries design and develop microchips for use in printer cartridges — and make “cheat” products that video game players can use to beat games more easily — cracked the security used on its ink cartridge microchips.

    Datel also allegedly shared the chips' design and configuration with other companies that make and sell printer cartridge chips, including chips for inclusion in clones of HP 930 and 950 printer ink cartridges.

    An HP spokesman told Law360 on Tuesday that the company “invests billions of dollars in developing innovative products for our customers and is committed to pursuing legal enforcement to protect our brands and intellectual property, the technological innovations behind them and the value we deliver to our customers and shareholders.”

    HP inkjet printers and ink cartridges are designed and configured to be used with each other, Monday's complaint says. HP claims it uses confidential technology — including master key codes within chips in HP printers, and base key codes within chips in HP 930 and 950 printer cartridges — so that the printers can authenticate communication between the printers and cartridges.

    Printer chips authenticate the base key codes in the cartridge chips, manufactured by STMicroelectronics, and if an ink cartridge doesn't have one, the cartridge won't work in the HP printer, Monday's suit alleges.

    STMicro makes a development kit that allows its customers to develop software and generate firmware for its microchips, the complaint claims. The kit gives its user access to the operation of the ST microchip, such as to commands that enable or disable security features within the chip, HP alleges.

    HP says STMicro only gives customers the development kit under “very strict confidentiality terms, including … prohibitions on reverse-engineering and on providing the development kit to others.”

    HP further claims it hasn't disclosed its key codes outside HP and has ensured that those who have information about or access to the trade secrets are obligated to keep them secret.

    “These trade secrets reduce proliferation of counterfeit printer cartridges, and protect HP from improper warranty claims based on non-HP cartridges,” Monday's suit says. “Further, the trade secrets protect the investment of time and resources that HP has made in developing its printer technology, by ensuring that competitors do not simply 'copy' HP’s technology, and instead invest their own resources to engineer 'work-around' chips compatible with HP printers.”

    HP accuses Datel — which allegedly employs a team of computer programmers, developers, designers, reverse engineers and code hackers — of starting its scheme as early as 2012 and acquiring an STMicro development kit without permission from STMicro after that company refused to provide it one.

    Datel then allegedly used the kit to crack the security on STMicro chips and figure out how HP derived base key codes from a master key code, determined the master key codes contained in HP printers that use HP 930 and 950 series ink cartridges, and derived base key codes from the master key codes.

    In addition to $30 million in damages, the suit seeks preliminary and permanent injunctive relief, blocking Datel and its subsidiaries from further manufacturing or selling chips for printer cartridges that work in HP printers.

    Representatives for Datel could not be immediately reached for comment Tuesday.

    HP is represented by Christopher J. Banks and John V. Gorman of Morgan Lewis & Bockius LLP.

    Counsel information for Datel wasn't immediately available Tuesday.

    The case is Hewlett-Packard Co. v. Datel Holdings Ltd. et al., case number 5:14-cv-02891, in the U.S. District Court for the Northern District of California.

    –Editing by Edrienne Su.