Lexmark Files Patent Infringement Suit for Toner Cartridges

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Aug 26, 2010

On August 23, 2010, Lexmark International, Inc. announced that it had filed a patent infringement complaint with the United States International Trade Commission against 24 companies that manufacture, import, and sell replacement cartridges for various Lexmark laser printers and multifunction devices. The following printers are associated with the complaint: T520, T610, T620, T630, T640, E120, E220, E230, E232, E234, E238, E240, E250, E320, E322, E321, E323, E330, E332, E340, E342, E350, E352, and/or E450 laser printer series.

The companies are listed in the table below.  According to court documents, many of the companies named below are related or affiliated in some way to each other and are importers, subsidiaries, distribution centers, or retailers. Several of the defendants in this complaint have also been named in other recent cases from other OEMs including HP, Canon, and Epson.

Table: Companies Named in the Patent Infringement Complaint

Ink Technologies Printer Supplies, LLC d/b/a Ink Technologies LLC Ninestar Image Co. Ltd. (a/k/a Ninestar Technology Co., Ltd.) Ninestar Image Int’l, Ltd. Seine Image International Co. Ltd.
Ninestar Technology Company, Ltd. Ziprint Image Corporation Nano Pacific Corporation IJSS Inc., d/b/a TonerZone.com Inc. and d/b/a Inkjet Superstore
Chung Pal Shin d/b/a Ink Master Nectron International, Inc. Quality Cartridges Inc. Direct Billing International Incorporated d/b/a Office Supply Outfitters and d/b/a The Ribbon Connection
E-Toner Mart, Inc. and Alpha Image Tech ACM technologies, Inc. Virtual Imaging Products Inc. Acecom Inc.-San Antonio d/b/a Inksell.com
Jahwa Electronics Co., Ltd. Huizhou Jahwa Electronics Co., Ltd Copy Technologies Inc. Laser Toner Technology, Inc.
C&R Services, Incorporated d/b/a C&R Distributors and C&R Distributing Print-Rite Holdings Ltd. Union Technology Int’l (M.C.O.) Co. Ltd. John Does 1-20

Lexmark’s complaint alleges that Lexmark replacement cartridges available from these companies infringe at least 15 patents owned by Lexmark. Lexmark is requesting that the ITC issue a general exclusion order banning the importation and sale of patent infringing laser cartridges by any entity.  In addition to the ITC complaint, Lexmark has also filed a related patent infringement complaint in the U.S. District Court for the Southern District of Ohio against the same defendants. The District Court

Complaint contains allegations similar to those in the ITC complaint and seeks injunctive relief, monetary damages, and attorneys’ fees.

This is the latest in a string of patent infringement-related announcements by major OEMs. Canon announced their toner patent infringement case in late June and HP has two recent inkjet-related complaints also filed with the ITC. In previous blogs, we stated that the OEMs are exhibiting their legal clout and it is one of the weapons they have in their arsenal to protect their intellectual property. With a constricting economy, users of print are trying various strategies to cut their printing costs which may include duplexing documents, using aftermarket supplies, and cutting back on color printing, etc. As a result, the market has seen a subtle shift to aftermarket supplies which in turn has had an impact on the OEMs.

As is their legal right since they own the patents, OEMs are trying to fend off what they perceive as unfair competition. This is not the first case of this type and we do not expect it to be the last one. While it is difficult to predict what the impact these cases will have on the market, one expected outcome is that it will level the playing field for the aftermarket so everyone will know what they can and cannot do. Some aftermarket companies claim that they offer “IP- free” supplies and the perception is that some product may not actually be “IP-free.” There are companies that do make an effort to respect intellectual property but can be at a disadvantage since they are making a significant investment in offering product that does not infringe. Some in the aftermarket would welcome knowing what product is acceptable and what is not so everyone can compete fairly in the market.

Another outcome might be a significant change for aftermarket product producers which may have to return to remanufacturing which has different laws versus new build products. Alternatively, some aftermarket companies may opt to get their own patents for products that will allow them to produce intellectual-free new build products. Whatever the outcome, there will be those that say the OEMs are filing complaints because they want to ensure a monopoly and prevent competition while the OEMs are trying to protect the intellectual property they own and have invested in at the same time making sure the aftermarket is competing fairly from their point of view. For the time being, the supplies aftermarket will remain extremely competitive forcing OEMs to continue to protect their intellectual property while the aftermarket considers its next step strategy as it tries to secure more supplies market share.

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