LYRA CORP PUSHING HP TO SUE MORE ASIAN REMANUFACTURES

[Anonymous]

http://www.opi.net/articles/features/lyra_199
LYRA CORP PUSHING HP TO SUE MORE ASIAN REMANUFACTURES
Recent legal activity by HP finds the firm winding down one
case against a group of aftermarketers while filing a new complaint with
the International Trade Commission (ITC) against yet another list of
third-party supplies companiesWhen HP filed its complaint in September,
Lyra Research predicted that: “If HP was a bit lackadaisical in getting
the current lawsuit out the door, the production of future cartridge
lawsuits will be greatly accelerated.”With its most recent lawsuit, HP
is taking action on ink jet technology that the firm has leveraged
across multiple cartridges, leaving no doubt that the OEM is ratcheting
up its efforts to stem the flow of revenue being diverted by unlawful
means to aftermarket coffers.

On 23 September, 2009, HP filed
complaints with the ITC and the US District Court for the Central
District of California against 11 manufacturers and sellers of
HP-compatible aftermarket cartridges. This case involved compatible ink
cartridges that, according to HP, violated multiple claims within four
US patents used in the firm’s HP 02 ink cartridges.

During the
ensuing months, a number of these firms defaulted – Mextec Groupd/b/a
Mipo America of Miami Beach, Florida; Shanghai Angel Printer Supplies of
Shanghai, China; Shenzhen Print Media of Shenzhen, China; Zhuhai
National Resources & Jingjie Imaging Products of Guangdong, China;
Mipo International of Kowloon, Hong Kong; Tatrix International of
Guangdong, China; and Ourway Image of Guangdong, China – leaving four
aftermarketers involved in ongoing litigation with HP.

On 1
February, the ITC released its response to respondent Zhuhai Gree’s
motion for termination of investigation based on an entry of consent
order. Under the terms of the consent order, Zhuhai Gree stipulates that
“it will not directly or indirectly import into the United States, sell
for importation into the United States, or sell within the United
States after importation of any ink jet ink supplies or components
thereof that infringe any of the asserted claims,” while the company
further states that the signing of the consent order does not constitute
an admission by Zhuhai Gree that an unfair act has been committed.

In
addition, HP also indicated that it has “settled or is close to
reaching a settlement agreement with” the other three respondents. In
fact, Lyra Research has learned that HP has now settled patent
infringement claims brought against ink cartridge reseller Comptree Inc,
putting an end to disputes between the companies in Federal court and
the US ITC.

New aftermarket Lawsuit
On 5 March, HP took
action again, simultaneously filing a complaint with the ITC and the US
District Court for the Northern District of California, alleging six of
its product patents were infringed: US patent numbers 6,234,598;
6,309,053; 6,398,347; 6,412,917; 6,481,817; and 6,402,279.

The
claim stated: “The infringing ink cartridges at issue in this action
include cartridges that are marketed as compatible with at least the HP
27/28 and HP 56/57 ink cartridges. In addition to those products, HP
manufactures and sells additional models that share the same or similar
structure but differ in other attributes, such as ink volume, ink
colour, and compatibility with certain printing platforms. These models
include the HP 21/22, HP 54, and HP 58/59 cartridges.”

In the
complaint, HP alleges that MicroJet Technology of Taiwan; Mipo
Technology Limited of Hong Kong; Mipo Science & Technology of China;
Mextec d/b/a Mipo America of Miami, Florida; SinoTime Technologies; All
Colors of Miami, Florida; and PTC Holdings Limited of Hong Kong
unlawfully import into the United States, sell for importation, and/or
sell within the United States after importation certain ink jet ink
cartridges with infringing print heads and components.

The OEM
claims that MicroJet manufactured and sold the allegedly infringing ink
cartridges under its own brand name and as generic and/or made-to-order
products and print heads to other companies, including Mipo and PTC.
Mipo and PTC then resold the accused products in markets, including the
US. Sinotime is accused of selling the allegedly infringing products
under the name ‘All Colors’ on Amazon and advertising the products as
“remanufactured” cartridges.”Defendants and/or other unidentified
parties were either directly or indirectly involved in the events
surrounding the converted print heads based on, inter alia, the
manufacturing, packaging, distribution, marketing, and sale of the
products containing HP converted print heads,” states HP in its filing.

After
describing the process by which it purchased the infringing products
for testing. HP subsequently claims: “Results from internal analysis of
‘Mipo’ products indicated they were composed of a genuine HP print head
and a non-HP cartridge body that was made to resemble [or in some cases,
closely resemble] a genuine HP cartridge body.”

According to
HP’s internal tracking system, the HP print heads are from truck
shipments that were hijacked in March and September 2007, after the firm
implemented increased security measures to stop the unlawful removal of
print heads from a contract manufacturer assembly plant located in
Malaysia.

HP decries the defendants’ patent infringement from a
technical and marketing perspective.
According to the OEM:
“Defendants acted with an unlawful purpose and deliberate intent as
demonstrated, for example, by the fact that the cloned ink cartridge
body was designed to look exactly like a genuine HP ink cartridge body
in order to pass off the ‘Mipo’ labelled product as a genuine,
remanufactured HP ink cartridge.”

Moreover, “As a result of
Defendants behaviour, Defendants have reverse passed off (or reverse
palmed off) HP’s print heads as its own, thereby misleading the public
and deceiving the public as to the true source of their products.”

The
result of this behaviour, “entitles HP to an award of its damages,
Defendants ill-gotten profits, treble damages, costs, and reasonable
attorneys’ fees,” claims HP. “In addition, HP seeks a return of genuine
HP print heads that were unlawfully taken by Defendants.”

While
this lawsuit is still in its infancy, the defendants have already come
out in defence of their business practices. In prepared remarks,
MicroJet maintained: “All products manufactured by us are created with
our own research and development efforts,” while Mipo claimed, “HP’s
accusation is groundless. Mipo is a professional remanufacturer of
printer cartridges. We never converted any cartridges.”

Predicting
the outcome
While Lyra is loath to predict how the courts will rule
in any lawsuit, given the swift and favourable outcome of HP’s previous
complaints filed with the ITC and US District Court, we would be
surprised if this lawsuit did not follow a similar course.

According
to Lyra’s Cartridge Demand Advisory Service, the HP 21, 22, 56, 57, and
02 are among the top 20 ink cartridge products in the world, and the HP
56 holds the all-time record for number of units sold among printer
cartridges of any make or technology.”At its height in 2005, I’d
estimate that about 120 million original HP 56 cartridges were sold
around the world,” asserts Andy Lippman, Senior Analyst with Lyra’s Hard
Copy Supplies Advisory Service.

HP’s lawsuits also have broader
implications, as Lippman explains that the firm is attacking a
widespread problem in the aftermarket – the tendency of some Chinese
companies to reverse engineer and clone integrated ink cartridges
without regard for patents.

The problem, he says, is that these
infringing cartridges cause extreme pricing pressure because the new
Chinese compatibles can be produced and sold for less than it costs to
source an original cartridge core.

Lippman tells Lyra Research
that the new compatibles are often shown at aftermarket trade shows,
particularly those in China, and that he spotted a few in Shanghai at
ReChina Asia Expo 2009. Moreover, the presence of these illegal
cartridges pollute the empties supply stream, as they are mixed in with
valuable OEM empties, and it is difficult and expensive for
remanufacturers to avoid them.As a result, maintains Lippman: “The
remanufacturing industry often speaks out against this practice and is
likely on the side of HP.”He notes that the HP-Pelikan lawsuit from 2007
involved new integrated cartridges that Pelikan was advertising as
remanufactured, and says, “It’s plausible that Pelikan had no knowledge
that they were selling new integrated cartridges.”At the time of the HP
lawsuit, Lyra Research speculated that Pelikan may have unknowingly
obtained illegitimate HP empties and cautioned that aftermarket
companies should be “carefully scrutinising all empties” as the risk was
high that the current supply of empties had already been tainted by
infringing products.

TONERNEWS OPINION
Lyra know nothing about
empties , they are kissing the oem’s asses ,because the oem’s are the
only ones that buy there overpriced expensive reports .(the asian
remanufactures don’t waste there money on such useless reports ).

[Author]

May 10, 2010 at 9:51 AM