MORE ASIAN REMANUFACTURES FOLD Vs LEXMARK & US I.T.C.

[Anonymous]

MORE ASIAN REMANUFACTURES FOLD Vs LEXMARK & US  I.T.C.
Earlier this month, Lexmark issued a press release announcing that it had settled its toner cartridge patent litigation with 10 of the 24 companies originally named in its complaints before the U.S. International Trade Commission (ITC) and the U.S. District Court for the Southern District of Ohio (see News Briefing, “Lexmark Announces Settlement Agreements in Toner Cartridge Lawsuits”). Now, Judge Carl C. Charneski has found some of the remaining third-party supplies distributors to be in default in the ITC matter, and it seem the ITC is moving closer to finding the so-called Jahwa group of companies in default.

To recap, on February 8, Lexmark announced settlements with the following 10 firms:

   1. Alpha Image Tech;
   2. E-Toner Mart, Inc.;
   3. Nano Pacific Corporation;
   4. Ninestar Image Co. Ltd.;
   5. Ninestar Image International, Ltd.;
   6. Ninestar Technology Company, Ltd.;
   7. Print-Rite Holdings Ltd.;
   8. Seine Image International Co. Ltd.;
   9. Union Technology International (M.C.O.) Co. Ltd.; and
  10. Ziprint Image Corporation.

Although it was not named in the Lexmark press release, Lexmark has also settled with Print-Rite distributor Nectron in the district court case, and Nectron defaulted in the ITC matter, which brings the total settlements up to 11.

Remaining in the complaints were the following eight distributors. All except for Virtual Imaging Products, which imported infringing cartridges from an “unknown source,” were accused of distributing infringing cartridges made by Ninestar.

   1. Acecom, which does business as Inksell.com;
   2. ACM Technologies, Inc.;
   3. Chung Pal Shin (doing business as Ink Master);
   4. Direct Billing International, Inc. (doing business as Office Supply Outfitter);
   5.  IJSS Inc. (doing business as TonerZone.com Inc. and Inkjet Superstore);
   6. Ink Technologies Printer Supplies, LLC (doing business as Ink Technologies LLC);
   7. Quality Cartridges, Inc.; and
   8. Virtual Imaging Products.

Now, Judge Charneski has issued initial determinations in the ITC investigation (number 337-TA-740) finding most of these respondents in default. The first of these orders, signed on February 18,  finds Acecom in default. The second, signed the same day,  finds IJSS Inc. in default. The judge also issued an order on February 22 , finding in default ACM Technologies, Inc.; Chung Pal Shin; Direct Billing International, Inc.; Ink Technologies Printer Supplies, LLC; and Quality Cartridges, Inc.

According to the judge’s orders, “A party shall be found in default if it fails to respond to a complaint and notice of investigation, and fails to show cause why it should not be found in default.” Once a party has been determined to be in default, “t]he facts alleged in the complaint will be presumed to be true.”

From the above list of eight distributors, the only firm with its status unresolved in the ITC case is Virtual Imaging Products and the John Does from which it allegedly imported infringing cartridges.

To bring the grand total of respondents up to 24, there were five remaining companies named in the distinct court complaint and ITC patent-infringement complaint, the Jahwa respondents:

   1. Jahwa Electronics Co., Ltd.;
   2. Huizhou Jahwa Electronics Co., Ltd.;
   3. Copy Technologies, Inc.;
   4. Laser Toner Technology, Inc.; and
   5.  C & R Services, Inc.

Judge Charneski had ordered the Jahwa respondents to show cause by December 30, 2010, as to why they should not be held in default in the ITC complaint. Now, the ITC has come one procedural step closer to finding the Jahwa respondents in default. There was some question as to whether Huizhou Jahwa Electronics Co. had received notice of the investigation. On February 23, the ITC’s investigative staff issued a response supporting Lexmark’s motion for a default judgment against Huizhou Jahwa Electronics. While we cannot say for certain that all the Jahwa respondents will be found in default in the ITC complaint, this is looking increasingly likely.

Week by week, Lexmark is winning its legal battle against more of the defendants/respondent accused of infringing its toner cartridge patents by settlement or default. We cannot help but wonder: Was Lexmark’s patent-infringement case that strong, or was the size of the market for monochrome toner cartridges used in various Lexmark printers and MFPs that small? Was it more cost-effective for third-party supplies companies to settle and default rather than litigate? Whatever the motivation for the recent rash of settlements and default judgments, Lexmark is the clear winner in this lawsuit.

[Author]

March 2, 2011 at 7:57 AM