HP has reached substantial resolution on the investigation by the United States International Trade Commission (ITC) into the importation and sale of patent infringing HP 02 inkjet ink cartridges.
The investigation, based on a complaint filed by HP on Sept. 23, 2009, alleged violations of section 337 of the Tariff Act of 1930 in the importation into the United States and sale of HP 02 compatible inkjet ink supplies that infringed patents asserted by HP.
The ITC investigation identified 11 respondents: Zhuhai Gree Magneto-Electric Co. Ltd. of China; InkPlusToner.com of Canoga Park, Calif.; SmartOne Services LLC d/b/a InkForSale.net of Hayward, Calif.; Comptree Inc. d/b/a Meritline, ABCInk, EZ Label, and CDR DVDR Media of City of Industry, Calif.; Mipo International Ltd. of Hong Kong; Mextec Group Inc. d/b/a Mipo America Ltd. of Miami, Fla.; Shanghai Angel Printer Supplies Co. Ltd. of China; Shenzhen Print Media Co. Ltd. of China; Zhuhai National Resources & Jingjie Imaging Products Co. Ltd. of China; Tatrix International of China; and Ourway Image Co. Ltd. of China.
To date, HP’s ITC complaint has been resolved in the following manner:
InkPlusToner.com and Comptree Ink have all entered into settlement agreements with HP regarding the investigation. These companies have agreed that HP’s patents are valid and infringed and, further, that each company will cease and desist from selling the cartridges in question. These parties also have paid HP an undisclosed sum of money. HP anticipates completion of a settlement with SmartOne Services consistent with the terms above.
The Administrative Law Judge has approved Zhuhai Gree Magneto-Electric Co. Ltd.’s motion to terminate the investigation as to Zhuhai Gree based on entry of a consent order in which it agrees not to engage in the future importation of the relevant products.
The Administrative Law Judge has entered default judgment against the remaining seven respondents. Upon review by the Commission, HP anticipates a satisfactory remedy from the ITC in the form of an Exclusion Order against the products at issue from the accused companies.
Charlie Brewer, President of Actionable Intelligence, a market research firm based in the U.S, commented “Compared to the Epson 337 investigation, HP US ITC complaint has come to a quick resolution, which is not surprising. HP typically resolves most of its cases quickly. This matter will not have the impact that the Epson case had on the US market. Unlike the Epson case, which involved virtually all of Epson’s desktop cartridges, this one covers only the HP 02 cartridge and it was deployed in only a handful of machines. The Epson exclusion order restricts the US market for non-Epson supplies dramatically. That will not be the case this time”.
“Regardless, the settlement is important.” He told Recycler. “First, any case that involves HP is a big deal because HP is the 800-pound gorilla in the market. It’s also a big deal if you’re a small firm and you have to write HP a big cheque to settle the matter. Second, the case illustrates that HP will not tolerate companies that clone its ink tanks. HP no longer relies exclusively on integrated cartridges and over the past couple of years has introduced a variety of tanks, which are fairly easy to copy. The OEM is making it clear that it will not tolerate competitors that copy these tanks.
“The impact that the settlement has on the channel will be the most significant facet of the settlement. Once again, an OEM has shown that various third-party supplies vendors are infringing patents. This makes the companies in the channel leery of marketing third-party supplies because distributors are often sued along with the manufacturer. It’s too bad. There are some signs that larger companies are interested in marketing non-OEM supplies. Dell, for example, just launched a comprehensive line of refilled ink jet cartridges, which makes me think the channel for non-OEM consumables is growing. A lawsuit proving that a number of companies are ignoring the market leader’s intellectual property is bad for the entire industry”.
Stephen Nigro, Senior Vice President, Inkjet and Web Services Business, Imaging and Printing Group, HP said “HP is pleased with the outcome on these matters, and remains committed to vigorously pursuing legal enforcement against practices that do not respect HP’s IP rights”.
