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AnonymousInactivehttp://www.action-intell.com/2010/12/28/in-addition-to-oem-suits-remans-now-face-supplier-lawsuits/
CHIP MANUFACTURE SUES 27 WHOLESALERS/REMANUFACTURES
In Addition to OEM Suits, Remans Now Face Supplier Lawsuits
On
December 14, American Imaging Cartridge, LLC; Innovative Cartridge
Technologies, Inc.; and Platinum Manufacturing International, Inc. filed
a patent-infringement lawsuit (case 8:2010cv02789) in Florida Middle
District Court in Tampa against dozens of big and small players in the
third-party supplies industry. It is the latest in a string of suits
alleging that a growing number of firms are using or marketing so-called
universal chipsets that violate various patents.The electronic
chipsets on most OEM cartridges can be a huge stumbling block for firms
attempting to market fully functional non-OEM cartridges. OEM chips are
challenging for non-OEM companies to emulate without violating the
original patents, and successfully reverse-engineering the technology
requires large investments of time and money. Those that can bring to
market non-infringing, compatible chips stand to win big, however. Chips
are essential parts for third-party supplies vendors and are often far
more lucrative to market than other cartridge parts such as OPC drums
and toner.To ensure their profitability, companies with
intellectual property (IP) rights to third-party chipsets have become
increasingly litigious in protecting their IP. Currently, the three
largest suppliers to the U.S. remanufacturing industry—Future Graphics,
Static Control Components, and UniNet Imaging—are involved in lawsuits
related to chip technology. The three firms compete fiercely to supply
remanufacturers with tools and components such as chips, drums, toners,
and more. Over the past few months, the list of firms named in
complaints has widened to include third-party consumables vendors—much
to the remanufacturing industry’s chagrin, no doubt.The December Complaint
The
defendants in the suit filed in December include domestic
remanufacturers and distribution organizations along with the U.S.-based
subsidiaries of certain foreign firms. The companies named in the
complaint included:* ACM Technologies, Inc.;
* Alpha Image Tech;
* Arlington Industries, Inc.;
* Cardinal Cartridge, Inc.;
* Copy Technologies, Inc.;
* Densigraphix, Inc.;
* Diamond Digital Group, Inc.;
* E-Toner Mart, Inc.;
* Imageworks, Inc.;
* Ink Technologies Printer Supplies, LLC;
* K & W International Development, Inc.;
* Kalon Corp;
* Kalon International;
* Kiwi Group Corp.;
* Laser Toner Technology, Inc.;
* LD Products, Inc.;
* LTS Technology, Inc.;
* Matric Kolor, Inc.;
* Mextec Group, Inc., also doing business as Mipo America, Ltd.;
* Monoprice, Inc.;
* Sinotime Technologies, Inc.;
* Nano Pacific Corp.;
* Power Imaging Supply, Inc.;
* Printer Essentials.Com, Inc.;
* R & L Imaging Group, Inc.;
* Target Imaging LTD; and
* TTI Imaging, Inc.Also
named in the suit were some individuals: Ronald Roman, who does
business as RTR Enterprises; John Doe 1, doing business as BB Office
Supply; and John Does 2 through 10, who are described as “seller(s),
manufacturer(s), importer(s) and/or distributor(s) of ink cartridges for
imaging devices and/or chips for same that infringe the
Patents-in-Suit.” The plaintiffs are seeking damages, attorneys’ fees,
and injunctions prohibiting further infringement.The defendants
are alleged to have infringed patents related to universal monochrome
toner cartridges and their components. The technologies are designed to
allow toner cartridges to be used in more than one device or to enhance a
cartridge’s performance. The U.S. patents involved include 7,136,608,
7,286,774, 7,187,874, 7,512,360, 7,551,859, 7,068,954, 7,106,993,
7,136,607, 7,362,988, 7,447,464, and 7,174,123. The patents were issued
to inventor Steven Miller, who, as we will discuss below, is an officer
in various firms marketing the technologies. The patents are mainly
related to technologies found in cartridges for use in Lexmark
monochrome laser printers as well as certain devices from other vendors
such as IBM. The defendants are accused of employing the infringing
technologies in monochrome cartridges for use in Lexmark T420, T630, and
T640 units.Prior to the December compliant, we were unaware of
Tampa, FL-based American Imaging Cartridge, LLC. We were, however,
familiar with the other two plaintiffs, Innovative Cartridge
Technologies (ICT) and Platinum Manufacturing International. According
to the Florida Department of State, Division of Corporations, Mr. Miller
is an officer of both firms, which are each based in Pinnellas Park,
FL. Both companies cross-license technology, including technology for
universal chipsets, with Static Control Components. We became aware of
ICT and Platinum Manufacturing International because of their
involvement with Static Control in earlier patent-infringement lawsuits,
including Static Control’s ongoing legal disputes with its biggest
rival Future Graphics.Escalating Chip Wars
The 2008
Static Control Components v. Future Graphics lawsuit (case
1:2008cv00109), which is still wending its way through the courts,
centers on chipsets and shares some key elements of the American Imaging
Cartridge et al. v. Ronald Roman et al. case. For example, the
ICT-owned intellectual property in the Future Graphics case involves
some of the same patents as the American Imaging Cartridge et al. v.
Ronald Roman et al. lawsuit including U.S. patents 7,187,874 and
7,286,774. Both patents relate to universal printer chips for monochrome
cartridges. One major difference, of course, between the Future
Graphics case and American Imaging Cartridge’s most recent complaint is
that the older case focuses on the supplier of the chips, not on the
users.ICT and Static Control along with Industrial Engineering
and Development, Inc., another firm Mr. Miller officiates, were also
named as co-defendants in a suit brought by Powervip, Inc. and Powervip
SA (case 1:2008cv00382). Powervip SA is a chip manufacturer based in
Montevideo, Uruguay, and its U.S. distributor, Powervip, Inc., sold
Future Graphics its universal chips. After ICT and Static Control filed
suit against Future Graphics, Powervip sued for a declaratory judgment
indicating that certain products it manufactured and sold do not
infringe the defendants’ patents and that those patents are invalid. The
defendants’ were unsuccessful in their motion to dismiss the case or
transfer it to a different jurisdiction (read here). The matter is
moving forward in the U.S. District Court for the Western District of
Michigan.To add to the tangled web of lawsuits we are weaving,
ICT is also a co-plaintiff in Static Control’s lawsuit (case
1:2008cv00601) against UniNet Imaging, Inc.; UI Supplies, Inc.; and
Summit Technologies, LLC. UniNet acquired Summit in 2007 to expand its
chipmaking capabilities. Platinum Manufacturing International filed suit
(case 8:2008cv00310) against UniNet Imaging, Inc., and Summit
Technologies in 2008, and ICT and Platinum Manufacturing International
themselves were named as defendants in a patent-infringement lawsuit
(case 2:10-cv-01938-ODW-RZ) filed by UniNet Imaging this spring.More Trouble for U.S. Remans
The
December complaint will no doubt worry third-party cartridge vendors in
the United States. It suggests that in addition to the ever-present
threat of OEM lawsuits, firms that market non-OEM consumables now face
legal action if they side with the wrong supplier. The plaintiffs appear
to be very serious in pursuing legal remedies against U.S.
remanufacturers. The December action follows a similar move in November
against Schoon Manufacturing Corporation by American Imaging Cartridge
and Platinum Manufacturing International. In that suit (case
8:2010cv02654), Schoon Manufacturing was accused of violating seven of
the eleven patents included in the December complaint.Suppliers
to remanufacturers are increasingly challenged to make money. Many
cartridge components including toner and drums are commoditized,
especially those used in monochrome cartridges. Suppliers are reliant on
the sale of value-added products like chips to make up for lost
margins. Obviously, from the cases detailed above, suppliers have been
willing to beat each other with legal cudgels in order to protect their
businesses. At present, all the cases noted above remain in play.We
found it interesting that Static Control did not join its
cross-licensing partner in the lawsuits filed in November and December.
Static Control is a formidable legal warrior—just ask Lexmark—and the
company does not back down from a fight. With that said, presumably, the
firm did not feel it was wise to sue many of its U.S. customers whether
or not they use infringing chips. It appears, however, that its various
partners did not find much merit in Static Control’s wisdom.What
makes the American Imaging Cartridge et al. v. Ronald Roman et al.
lawsuit so troubling is the sheer number of defendants. American Imaging
Cartridge, LLC; Innovative Cartridge Technologies, Inc.; and Platinum
Manufacturing International apparently have rounded up all the
third-party vendors they could find that are not using ICT (or
presumably Static Control) chip technology in their Lexmark cartridges
and named them in the lawsuit. This litigious group of patent holders is
sending a very clear message to the industry—buy your chips from us or
else.http://www.action-intell.com/2010/12/28/in-addition-to-oem-suits-remans-now-face-supplier-lawsuits/
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AuthorJanuary 10, 2011 at 8:39 AM
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