RUSSIAN REMANUFACTURER LAUNCHES FIGHT AGAINST EPSON

RUSSIAN REMANUFACTURER LAUNCHES FIGHT AGAINST OEMs

Open letter to the participants of compatible consumables sector
to the participants of compatible consumables sector.

"Seiko Epson Corporation"
Legitimate protection of own rights or the violation of all principles of Samurai warriors?

Seiko Epson vs CHERNIL.NET, patents war in Russia

Dear participants of compatible consumables market,
In light of recent events I think the right to convey to you the information regarding the actions of the company "Seiko Epson Corporation" led by the head of the Moscow representative office of Epson Europe BY Mr. Kazuyoshi Yamamoto in the Russian Federation territory, which, in my opinion, is uniquely related to all participants in this sector who have business in manufacturing, supply of alternative consumables, including printers marks "Epson" as the impact of these individual vender policy – clearly can affect aspects of business of each contractor relevant to compatible consumables for printers of this manufacturer.

You all already know that, starting in September 2010, "Seiko Epson Corporation" sent three actions to the Moscow Arbitration Court.
One of them concerns the illegal use of Epson trade mark for the products of the Defendant (the company "X-Technologies", of your humble servant):

Case ? A40-109143/10-51-962 about the obligation to cease using the trademark and the recovery of 1 000 000 rubles.

Two others – relate to the defendant’s breach (in the opinion of the Complainant) the exclusive rights to patents, numbered 2336175 and 2344043:

The text of the patent 2336175 (russian): Download (668,8 Kb)
The text of the patent 2344043 (russian): Download (368,3 Kb)

Case ? ?40-121902/2010 about the violation of exclusive rights under the patent 2336175

Case ? ?40-5140/2011 about the violation of exclusive rights under the patent 2344043

My friends, you know perfectly well SHERNIL.NET and the strategy of top management in the company.
We, respecting a significant part of market participants, not a priori, but finding a consistent professionalism and paradigm of fair competitive competition, practiced by the majority, rarely (not to say "never") are entering with someone in a coalition or a close partnership.

Therefore, having carefully studied the case materials and case-law for similar cases, we realized that in fact in all three cases, the actions are without a real basis for the claims to us or to anyone of the players on the market of CISS, compatible disposable or refillable reusable cartridges and decided to battle for our interests without assistance.

However, as it turned out for Seiko Epson Corporation to win these cases was much more important than for us, because in essence, "passing" us in Arbitration, you can use the legal force of the decision of Russian courts, as a precedent (which is not existing de jure, de facto greatly determines the decisions of judges in similar cases in Russia) to destroy the business of all players, offering alternative, obviously more advantageous in terms of a combination of "price-quality-assurance", solutions on the consumables market, ink for Epson inkjet printers.

Carefully read the texts of patents registered in the "Rospatent".
If you read the formula of invention for patent 2336175, then you shall find in page 22 the clear definition that cartridge with a storage device on the body is patented.

If you take CISS for printer R200, the product is the subject of the claim, then Revinsky O.V., expert, who made a conclusion Download (3,7 Mb) HAS NOT studied the chip to determine the presence/absence of storage device there. However, there was a conclusion about equivalence of the indication referred to in the patent, and as a consequence – violations of intellectual property rights of Claimant on the basis of false conclusions that (quote): «chips’ data are used to stop the printer when ink ran out in one or more cartridges», conclusion made on the basis of reading the instructions (Attention, Gentleman) for THE OTHER PRINTER MODEL, namely, the instructions for CISS to printer Epson R290.

In fact, the chip in the printer R200 in any case does not block printer’ print and with an actual absence of ink in CISS, as does the original cartridge with a chip – the storage device. This fact has repeatedly been pointed out to the judge and the expert from Seiko.

Request for examination to establish this particular fact was applied to the court many times, but always was rejected by a very far-fetched, but formally legally justified reasons.The Claimant in meetings constantly puts pressure on the judge, representing the Defendant, as unscrupulous contractor, not possessing sufficient technical knowledge, and understanding that the Judge also have no this knowledge, insists that the fact that the chip is found on the cartridge, is sufficient to say that "storage device" was found. Do not laugh, not to the ridiculous – The Claimant asserts in all seriousness that the chip and storage device – are one and the same, and along with it, that "if the cartridge works in the printer, it means that it violates a patent of Epson …».

Audio recording of the meeting at which this fact is alleged you can download and listen here: Audio recording of the meeting dated 23.05.2011.

If we talk about the case on violation of exclusive rights under patent 2344043, then if you read the text of the patent (see page 10) and the conclusion Download (3,1 Mb), then the people close to the technique and familiar with the device of original cartridges and cartridges CISS for R290 are extremely puzzled by the fact, that expert Revinsky O.V. definitely identifies ONE level of contacts on the chips, used in CISS cartridges, refillable and compatible cartridges for Epson printers as TWO LEVELS of contacts.

????? ????????? ???? ? ?????? ??????? ?????, ?????? ???????????? ???????? Epson.
In the photo on the left – CISS cartridges with a single plank of chips (a product of the Defendant) on the right – Epson original cartridge.
Note the presence/absence of two levels of contacts described in the patent.

We are very respectful of the Revinsky Oleg Vital’evich, a person with significant experience in the field of protection of intellectual property rights, candidate of legal sciences, the author of several indicative articles on the subject of the patent, but the recognition of the square – round, white – black and plural identical to a single raises our perplexity, but honestly this leads to a number of "bad thoughts", because the judge of such level can not allow such gross errors during the examination. Leading Lawyer of the Claimant, Zalesov Aleksey Vladimirovich in his articles with regret remarks:

Unfortunately, the patent and technical expertise continues to be the most "disputable" moment in the case of patent infringement. This is due to the following provisions defining feature of the appointment and conduct of patent and technical expertise:

the possibility of using the theory of equivalents in determining the fact of patent use that gives to the expert considerable or excessive "freedom of discretion ". In his practice the author had the cases when the expert called the round and square bearing plates as the equivalent or wrote about the equivalence of "totality" of indicators, since the considered substance did not contain one of the components – indicators of independent point offormula etc.)».

In this particular case, when EMPTY is recognized as FULL, ONE LEVEL of contacts is recognized as TWO, actually ROUND is recognized as SQUARE, Aleksey Vladimirovich, in our opinion, actively makes use of this "excessive freedom of discretion".

The matter is now in legal proceedings. We will make every effort to convey to the Court the absurdity, in our view, of summary made in the conclusion.

If we talk about the case on the use of trademark, then Seiko Epson insists that the use of phrases EPSON is impossible, also for indication of compatibility with the products – Epson printers, and strongly suggests to the judges, without conducting any examinations and investigations, that CISS and compatible ink with the inscription "for Epson", that Seiko does not produce or deliver to the Russian market, as openly stated from their website and their brochures, are perceived by end users (hold on to chairs, Gentlemen), as a product of company Epson.

Everything would have been very funny if it were not so sad, so tragicomic.

X-Technologies, being an active member of the Association of Consumables Producers expressing gratitude to the group of companies, involved in solving this determinative problem, after the exhibition RechargEast, calls upon the major market participants to connect the intellectual, legal and financial leverage to create a reasonably balanced active opposition to the progressive and readable, in our opinion, movement of Seiko Epson Corporation in the path of "squeezing out" from the market of companies – suppliers/manufacturers of efficient, sustainable solutions in the consumables sector – to eliminate competition in the market.

Call to join the action against vendor, leading also the irresponsible, in our view, and clearly contrary to current law of the Russian Federation "On advertising", marketing policies within the already announced and read by representatives of Epson the pre-trial claims, to which Seiko predictably responded defiantly by threatening letters to prosecute the case if we make progress in this case.

Everyone has long known, and we do not hide it, that the business on products for Epson company recently become less and less interesting for us as a company focused on minimizing the cost of end-users for print, because an appearance in the market of such devices as HP PhotoSmart bOlOb, bllOb, which have, in our view, the combination "price – quality" inaccessible for the other players in this market segment, and consistent policy of Seiko to maximum obstructing the possibility of end users to use alternative consumables in manufacturer’s printers, as issuing printer L 100 with chip ink for its refueling (read announcement), high price of cartridges, often exceeding the price of printers themselves, in our view, unambiguously and irrevocably will change the Russian market of printers not in favor of Epson (According to a recent survey of users in Russia authority portal iXBT, Epson printers / MFP occupy the third place after leading Canon and HP, if you take into account the preferences of end users).

Nevertheless, the honor, business reputation and ability to resist by uniting, to "a game without rules" that may try to impose any of the players, regardless of its size – things are important in any business and for any company building business for years, decades.

We are not paying attention to the conciliatory attacks from Seiko, which deliberately does not increase the amount of compensation for allegedly disturbed by industry players, and in particular by us, the patent, expecting that we agree with the decision of the court, convenient for vendor, close our eyes to the loss for the long-obsolete product (EPSON R200), thus open the way for him and create a dangerous precedent, definitely is aimed to filing of an appeal with a list of instructions on definite deliberate non- study by court of a number of significant expertise questions for pronouncement of the verdict.

We will be glad of your support and unanimity in the protection of the interests of alternative press sector.

And as to Mr. Kazuyoshi Yamamoto, Head of the Moscow representative office "Epson Europe B.V.", I urge him not to bring himself and the whole company Seiko to a situation in which it will be difficult to find a way out in the future, to save face.

We undertake to publish all actions in the case of Seiko Epson Corporation versus LLC "X- Technologies", and promise to make every effort not to let the situation "to be quietly" decided in the shadow of judicial corridors..

Thanks to all who read the letter.

Waiting for your invaluable support given,

Top management CHERNIL.NET &
Director of project development in Russia and CIS,
Kharchenko N.V