Hp Fights To Toss Ink Cartridge Monopoly Class Action

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Date: Tuesday September 5, 2017 12:41:14 pm
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    Hp Fights To Toss Ink Cartridge Monopoly Class Action
    By Dorothy Atkins.

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    Law360, San Francisco  – HP Inc. urged a California federal judge Friday to toss a consolidated proposed class action alleging it attempted to monopolize the printer ink market by using a firmware update to prevent HP printers from accepting third-party ink cartridges, arguing that it doesn’t have a legal obligation to ensure its printers use other companies' cartridges that infringe HP's intellectual property rights. 

    HP attorney Rod Stone of Gibson Dunn & Crutcher LLP told U.S. District Judge Edward J. Davila that the March 2016 firmware update only targeted ink cartridges that infringe HP’s IP rights and no legitimate third-party cartridges were impacted. HP took the right steps to stop infringing products from being using with its technology and to do so isn’t a crime, Stone argued.

    “This was a routine firmware update that was done with permission,” Stone said. “We don’t think there’s any computer crime here.”

    Stone’s comments came during a hearing on HP’s bid to toss the consolidated putative class action brought by six consumers who allege HP’s update violated the Computer Fraud and Abuse Act, multiple state unfair competition statutes and common law.

    The suit seeks to certify a nationwide class of consumers who own certain models of HP’s OfficeJet, OfficeJet Pro and OfficeJet Pro X series.

    During the hearing, Stone argued that the firmware updates are standard and to criminalize them, by finding that they’re hacks, would be a very broad expansion of the federal computer abuse statutes. The consumers also authorized changes to the printer by accepting firmware updates, he argued.

    Stone also explained that since the suits were filed, HP has received complaints from customers about the firmware update. As a result, HP issued a patch so that those customers can undo the previous update and “proceed at their own peril,” Stone said.

    Stone added that although the patch might impact potential damages that are recoverable in the suit, it’s not really relevant to HP’s motion to dismiss and the patch was purely done as a customer service measure.

    In response, the consumers’ attorney, Jordan S. Elias of Girard Gibbs LLP, argued that the firmware update was HP’s attempt at crushing the competition. But if it wants to stop companies from making rival ink cartridges that infringe its IP, it needs to “go to the source,” issue a cease and desist letter and seek a court-ordered injunction against them, Elias said.

    “It’s much more efficient to go to the source of the infringement and deal with it there,” he argued.

    HP disabled thousands of printers without disclosing that the printers would no longer work with more affordable cartridges. According to the consolidated complaint, ink cartridges are generally priced at $13 to $75 per ounce, and the third-party cartridges at issue typically run on the lower end of the spectrum.

    Elias said that after the firmware update, error messages appeared on customers’ computers, which were “positively baffling.” The messages said the ink cartridge was missing or damaged, and as a result, many customers were confused and were forced to buy more expensive HP cartridges, he said.

    In one case, the customer thought that her ink cartridge was broken, so she purchased another one. When her printer still didn’t work, she called HP for technical support and the customer service representative told her that her printer was likely broken, so she purchased a new one, Elias said.

    Elias added that since the update, HP has apologized to customers, but the company admitted it would do it again if it’s necessary, so a court-ordered injunction is necessary.

    “This is a consumer protection case where there’s a real harm,” he said.

    Judge Davila took the arguments under submission.

    HP was represented by Rod Stone of Gibson Dunn & Crutcher LLP.

    The consumers were represented by Jordan S. Elias and Elizabeth Antonia Kramer of Girard Gibbs LLP.

    The case is In re. HP Printer Firmware Update Litigation, case number 5:16-cv-05820, in the U.S. District Court for the Northern District of California.

    –Editing by Kelly Duncan.

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