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 user 2011-01-10 at 8:39:01 am Views: 133
  • #24020

    In Addition to OEM Suits, Remans Now Face Supplier Lawsuits
    December 14, American Imaging Cartridge, LLC; Innovative Cartridge
    Technologies, Inc.; and Platinum Manufacturing International, Inc. filed
    a patent-infringement lawsuit (case 8:2010cv02789) in Florida Middle
    District Court in Tampa against dozens of big and small players in the
    third-party supplies industry. It is the latest in a string of suits
    alleging that a growing number of firms are using or marketing so-called
    universal chipsets that violate various patents.

    The electronic
    chipsets on most OEM cartridges can be a huge stumbling block for firms
    attempting to market fully functional non-OEM cartridges. OEM chips are
    challenging for non-OEM companies to emulate without violating the
    original patents, and successfully reverse-engineering the technology
    requires large investments of time and money. Those that can bring to
    market non-infringing, compatible chips stand to win big, however. Chips
    are essential parts for third-party supplies vendors and are often far
    more lucrative to market than other cartridge parts such as OPC drums
    and toner.

    To ensure their profitability, companies with
    intellectual property (IP) rights to third-party chipsets have become
    increasingly litigious in protecting their IP. Currently, the three
    largest suppliers to the U.S. remanufacturing industry—Future Graphics,
    Static Control Components, and UniNet Imaging—are involved in lawsuits
    related to chip technology. The three firms compete fiercely to supply
    remanufacturers with tools and components such as chips, drums, toners,
    and more. Over the past few months, the list of firms named in
    complaints has widened to include third-party consumables vendors—much
    to the remanufacturing industry’s chagrin, no doubt.

    The December Complaint

    defendants in the suit filed in December include domestic
    remanufacturers and distribution organizations along with the U.S.-based
    subsidiaries of certain foreign firms. The companies named in the
    complaint included:

        * ACM Technologies, Inc.;
        * Alpha Image Tech;
        * Arlington Industries, Inc.;
        * Cardinal Cartridge, Inc.;
        * Copy Technologies, Inc.;
        * Densigraphix, Inc.;
        * Diamond Digital Group, Inc.;
        * E-Toner Mart, Inc.;
        * Imageworks, Inc.;
        * Ink Technologies Printer Supplies, LLC;
        * K & W International Development, Inc.;
        * Kalon Corp;
        * Kalon International;
        * Kiwi Group Corp.;
        * Laser Toner Technology, Inc.;
        * LD Products, Inc.;
        * LTS Technology, Inc.;
        * Matric Kolor, Inc.;
        * Mextec Group, Inc., also doing business as Mipo America, Ltd.;
        * Monoprice, Inc.;
        * Sinotime Technologies, Inc.;
        * Nano Pacific Corp.;
        * Power Imaging Supply, Inc.;
        * Printer Essentials.Com, Inc.;
        * R & L Imaging Group, Inc.;
        * Target Imaging LTD; and
        * TTI Imaging, Inc.

    named in the suit were some individuals: Ronald Roman, who does
    business as RTR Enterprises; John Doe 1, doing business as BB Office
    Supply; and John Does 2 through 10, who are described as “seller(s),
    manufacturer(s), importer(s) and/or distributor(s) of ink cartridges for
    imaging devices and/or chips for same that infringe the
    Patents-in-Suit.” The plaintiffs are seeking damages, attorneys’ fees,
    and injunctions prohibiting further infringement.

    The defendants
    are alleged to have infringed patents related to universal monochrome
    toner cartridges and their components. The technologies are designed to
    allow toner cartridges to be used in more than one device or to enhance a
    cartridge’s performance. The U.S. patents involved include 7,136,608,
    7,286,774, 7,187,874, 7,512,360, 7,551,859, 7,068,954, 7,106,993,
    7,136,607, 7,362,988, 7,447,464, and 7,174,123. The patents were issued
    to inventor Steven Miller, who, as we will discuss below, is an officer
    in various firms marketing the technologies. The patents are mainly
    related to technologies found in cartridges for use in Lexmark
    monochrome laser printers as well as certain devices from other vendors
    such as IBM. The defendants are accused of employing the infringing
    technologies in monochrome cartridges for use in Lexmark T420, T630, and
    T640 units.

    Prior to the December compliant, we were unaware of
    Tampa, FL-based American Imaging Cartridge, LLC. We were, however,
    familiar with the other two plaintiffs, Innovative Cartridge
    Technologies (ICT) and Platinum Manufacturing International. According
    to the Florida Department of State, Division of Corporations, Mr. Miller
    is an officer of both firms, which are each based in Pinnellas Park,
    FL. Both companies cross-license technology, including technology for
    universal chipsets, with Static Control Components. We became aware of
    ICT and Platinum Manufacturing International because of their
    involvement with Static Control in earlier patent-infringement lawsuits,
    including Static Control’s ongoing legal disputes with its biggest
    rival Future Graphics.

    Escalating Chip Wars

    The 2008
    Static Control Components v. Future Graphics lawsuit (case
    1:2008cv00109), which is still wending its way through the courts,
    centers on chipsets and shares some key elements of the American Imaging
    Cartridge et al. v. Ronald Roman et al. case. For example, the
    ICT-owned intellectual property in the Future Graphics case involves
    some of the same patents as the American Imaging Cartridge et al. v.
    Ronald Roman et al. lawsuit including U.S. patents 7,187,874 and
    7,286,774. Both patents relate to universal printer chips for monochrome
    cartridges. One major difference, of course, between the Future
    Graphics case and American Imaging Cartridge’s most recent complaint is
    that the older case focuses on the supplier of the chips, not on the

    ICT and Static Control along with Industrial Engineering
    and Development, Inc., another firm Mr. Miller officiates, were also
    named as co-defendants in a suit brought by Powervip, Inc. and Powervip
    SA (case 1:2008cv00382). Powervip SA is a chip manufacturer based in
    Montevideo, Uruguay, and its U.S. distributor, Powervip, Inc., sold
    Future Graphics its universal chips. After ICT and Static Control filed
    suit against Future Graphics, Powervip sued for a declaratory judgment
    indicating that certain products it manufactured and sold do not
    infringe the defendants’ patents and that those patents are invalid. The
    defendants’ were unsuccessful in their motion to dismiss the case or
    transfer it to a different jurisdiction (read here). The matter is
    moving forward in the U.S. District Court for the Western District of

    To add to the tangled web of lawsuits we are weaving,
    ICT is also a co-plaintiff in Static Control’s lawsuit (case
    1:2008cv00601) against UniNet Imaging, Inc.; UI Supplies, Inc.; and
    Summit Technologies, LLC. UniNet acquired Summit in 2007 to expand its
    chipmaking capabilities. Platinum Manufacturing International filed suit
    (case 8:2008cv00310) against UniNet Imaging, Inc., and Summit
    Technologies in 2008, and ICT and Platinum Manufacturing International
    themselves were named as defendants in a patent-infringement lawsuit
    (case 2:10-cv-01938-ODW-RZ) filed by UniNet Imaging this spring.

    More Trouble for U.S. Remans
    December complaint will no doubt worry third-party cartridge vendors in
    the United States. It suggests that in addition to the ever-present
    threat of OEM lawsuits, firms that market non-OEM consumables now face
    legal action if they side with the wrong supplier. The plaintiffs appear
    to be very serious in pursuing legal remedies against U.S.
    remanufacturers. The December action follows a similar move in November
    against Schoon Manufacturing Corporation by American Imaging Cartridge
    and Platinum Manufacturing International. In that suit (case
    8:2010cv02654), Schoon Manufacturing was accused of violating seven of
    the eleven patents included in the December complaint.

    to remanufacturers are increasingly challenged to make money. Many
    cartridge components including toner and drums are commoditized,
    especially those used in monochrome cartridges. Suppliers are reliant on
    the sale of value-added products like chips to make up for lost
    margins. Obviously, from the cases detailed above, suppliers have been
    willing to beat each other with legal cudgels in order to protect their
    businesses. At present, all the cases noted above remain in play.

    found it interesting that Static Control did not join its
    cross-licensing partner in the lawsuits filed in November and December.
    Static Control is a formidable legal warrior—just ask Lexmark—and the
    company does not back down from a fight. With that said, presumably, the
    firm did not feel it was wise to sue many of its U.S. customers whether
    or not they use infringing chips. It appears, however, that its various
    partners did not find much merit in Static Control’s wisdom.

    makes the American Imaging Cartridge et al. v. Ronald Roman et al.
    lawsuit so troubling is the sheer number of defendants. American Imaging
    Cartridge, LLC; Innovative Cartridge Technologies, Inc.; and Platinum
    Manufacturing International apparently have rounded up all the
    third-party vendors they could find that are not using ICT (or
    presumably Static Control) chip technology in their Lexmark cartridges
    and named them in the lawsuit. This litigious group of patent holders is
    sending a very clear message to the industry—buy your chips from us or