*NEWS*EPSON CHALLENGED..INK PATENT BATTLE

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Epson challenged in patent battle
Ink cartridge market set for court ruling as import company refuses to back down.A court battle is set to determine the future of the UK ink cartridge market with the possibility of a landmark legal decision over patent rights.The outcome of the litigation could lead to a change in the shape of the imaging industry if a court rules against Seiko Epson Corporation (SEC) in its patent dispute with Medea International, an import firm based in Dundee, Scotland.Earlier this year, SEC commenced a series of legal proceedings against smaller rivals it claimed were infringing its UK patent rights.But directors at Medea claim their Inkrite PhotoPlus cartridges do not infringe on Epson products and insist “our system, our process and the basic scientific principles used for its operation are fundamentally different”.In August, Epson succeeded in agreeing to settle a separate intellectual property rights action against a UK-based internet retailer, Recharge Inkjet Technologies, which traded online as CartridgeMonkey.As part of the agreement, Recharge agreed not to infringe Epson’s patents and registered designs and to make a substantial settlement payment to Epson.But news of the impending court battle could seriously handicap Epson’s continued efforts to clean up the cartridge market as potential rivals wait for the judge’s decision with interest.

Imaging industry expert Jim Forrest, a senior analyst at Lyra Research, told OPI: “If the court decision does go against Epson I would imagine we would be seeing a lot more Epson compatible products hitting the market.”Before they started issuing lawsuits the floodgates were open and the company has been successful in dramatically reducing this market. However, if they lose the case the clock will be reset and the dozens and dozens of companies that were affected by the threat of legal action will be returning to the market.”Epson has been extremely successful in taking a lot of these compatibles off the market with these lawsuits. However, this is the first time to the best of my knowledge that a company has refused to settle and back down. I’m surprised that they’ve decided to fight the battle.”This is a high-risk strategy for Medea but it certainly could be counter-productive for Epson.”Epson – one of the top four printer manufacturers together with Canon, Hewlett-Packard and Lexmark – announced it means business when it comes to protecting its patents.Epson claims that Medea, a computer consumables distributor in the UK and Europe, has infringed on patents belonging to Epson by importing ink cartridges compatible with Epson printers into the UK. Medea sells these imported cartridges in the UK under a number of brands, including Inkrite PhotoPlus.In a press statement, Epson insists Medea’s imported cartridges have a spongeless valve design which it claims is too similar to Epson’s patented Smart Valve Technology.Seiichi Hirano, CEO of the Imaging Products Operations Division at Seiko Epson, said: “We do not take the decision to litigate against another company lightly. However, to protect our technology against the various claims being made by Medea International and by its continued acts of importation into the UK which infringe Epson’s UK patents and which undermine the benefits provided to our customers, Epson has been forced into taking the decision of starting UK patent infringement proceedings.”Third-party companies currently have 38 percent market share in unit terms and 24 percent in revenue terms – a modest figure because their cartridges are cheaper to buy.Managing Director at Medea International, Yusuf Okhai, told OPI: “Perhaps SEC are all too aware that when customers compare Inkrite to Epson OEM cartridges, they will also make the smart decision and use that product that gives them the highest ‘bang per buck’, and perhaps SEC don’t feel altogether confident that an informed consumer will choose to use their high priced products – so they choose to revert to using corporate bullying tactics, trying to squash the competitors with endless legal documents and claims that most can ill afford.”However, we are going to defend our products and our investment. We can only hope that the consumer will take a look at what we have to offer and get the chance to make up their own minds. If people like us don’t challenge this monopolistic market that the OEMs will always try to protect using these restrictive measures, only the consumer will pay.”The most common question we are asked is how it is possible for a small company to produce what we refer to as superior technology.”Simply put, ‘Necessity is the mother of invention’. If we made millions of dollars from selling 10-year-old technology at extortionate prices by maintaining an artificial monopoly, I don’t think I would spend the time, energy, effort and money to make something better.”But we don’t – we need to innovate to survive. We need to deliver consistently more for a price that is consistently less in order to sell against the giants of this industry. So we are still fighting our corner, and will continue to do so.”

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October 24, 2006 at 4:27 PM