*NEWS*HP & INKCYCLE SETTLE INKJET LAWSUIT

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Date: Monday June 13, 2005 11:21:00 am
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    HP, InkCycle settle inkjet refilling suit

    Hewlett-Packard settled its
    patent lawsuit with a Kansas City company that refills used inkjet cartridges
    and resells them to business retail outlets.

    InkCycle said it has paid HP an undisclosed sum as part of the settlement.
    The patents cover the ink found in refurbished cartridges that are compatible
    with HP cartridges numbered 49, 57 and 78. HP initially
    filed the lawsuit in March after it discovered that
    refilled inkjet cartridges sold under the Staples brand contained
    patent-infringing ink.

    The agreement comes on the heels of a U.S. Supreme Court decision against
    Lexmark. The printer maker failed in its attempt to have the high court review
    its copyright suit against a small company that offered a way to let customers
    use refilled toner cartridges.

    InkCycle Chief Technology Officer Tom Ashley told CNET’s News.com that his
    company was not aware that HP’s more than 200 patents included specifics on ink
    until he got the call from HP’s legal department. The CTO said his company has
    since replaced the inks for his HP-related products.

    “These were inks that we purchased from some of the larger aftermarket ink
    vendors,” Ashley said. “I think since we haven’t seen many of these types of
    lawsuits, it shows that there is not a keen awareness in the industry in general
    when it comes to ink patents. We were caught unawares.”

    A representative with HP said that the company would investigate any product
    that infringed on HP’s patents but refused to say if the company is looking into
    patent infringement claims against other inkjet refurbishing companies or their
    aftermarket ink vendors. HP holds 9,000 patents related to imaging and printing,
    4,000 of them for consumable supplies such as ink and cartridges, the company
    said.

    In its suit, HP claimed InkCycle violated patents 5,165,968; 5,428,383 and
    5,488,402. The first concerns fast-drying ink that works well on plain paper,
    and the second two concern methods for preventing color from bleeding.

    HP also sued Rhinotek in March for false
    advertising, arguing that the company falsely advertises its recycled HP inkjet
    cartridges as new.

    InkCycle also refurbishes inkjet and laser toner cartridges for Cannon, Dell
    and Lexmark. Ashley declined to discuss InkCycle’s relationship with those
    companies or the names of his ink suppliers.

    A representative for Staples said the company has more than 100 in-house
    brands of ink toner or fax-compatible cartridges but was not sure how many of
    those products came from InkCycle. Last month, Staples announced a deal to offer
    remanufactured ink cartridges compatible with Dell products under Staples’
    “simply” brand.

    ________________________________________________________

    HP, InkCycle Reach Ink Formulation Settlement

    InkCycle has reached an agreement with HP, settling a patent infringement
    lawsuit over the ink formulation InkCycle uses to refill certain HP cartridges.

    HP filed suit in March 2005 against InkCycle after  it “discovered that
    refilled inkjet cartridges sold under the Staples brand contained
    patent-infringing ink.”
    InkCycle, according to the terms of the confidential
    agreement, has “agreed to acquire reformulated, non-infringing ink sets for
    three InkCycle products and has agreed to pay HP an undisclosed sum.”
    “As an
    ethical company, we respect all IP rights. Our experience with HP has led to a
    further strengthening of our IP knowledge base, a critical factor for InkCycle’s
    continuing aftermarket leadership,” said Brad Roderick, InkCycle’s vice
    president. “We worked quickly and in collaboration with HP to procure
    reformulated inks when we learned of the problem and believe that helped bring
    this matter to a speedy resolution.”
    Pradeep Jotwani, senior vice president,
    Imaging and Printing Supplies Business for HP, said, “HP will continue to invest
    in technology that benefits consumers and to aggressively protect this
    investment. HP is pleased to be able to resolve this matter quickly and without
    extensive litigation and will constantly monitor InkCycle and others for
    possible patent infringement.”

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