Canon Continues Legal Attack to Protect Supplies Around the World

The past few months have been pretty busy for Canon as they seek to protect their supplies in a big way. In May 2010, Canon filed several complaints with the Korean Trade Commission regarding its photosensitive drums used in printing equipment. Separately, at the end of June, Canon filed a complaint with the USITC (United States International Trade Commission) and a concurrent, separate lawsuit in district court regarding two patents covering the printer’s drive motor connection with the OPC drum in the toner cartridge. (See separate blog, “Canon Sues Ninestar and Others Over Toner Patents,” from June 30, 2010 ) For some time, many industry watchers were wondering if there was going to be any action regarding the increased activity in new build, compatible toner cartridges especially for HP/Canon laser printers. While there has been significant activity in inkjet, it has been very quiet on the toner side.

Then, the flurry of ITC complaints and legal proceedings significantly increased as did rumors about international cases especially in Korea. According to public court documents, Canon believes that several Korean companies have infringed certain parts of their patents in that country. Canon believes that these companies allegedly produce drums that infringe Canon’s patents and are sold to aftermarket companies who use the drums to produce compatible supplies that are sold worldwide for use in HP and Canon laser printers. This is not the first time this particular patent has been part of legal or intellectual property complaints. There were several cases from the early 2000s regarding specific claims of this patent. Currently, Canon has filed five complaints with the Korean Trade Commission for different claims of this patent and sought one preliminary injunction in the Suwon District Court. The complaints are as follows:

*On June 11, 2010, the Suwon District Court found that AlphaChem had infringed claim 25 of the ‘609 patent.

While these companies mentioned in the table above are considered important in the aftermarket world for drums and/or parts in Korea, there are other companies such as Fuji Electric, Mitsubishi, and and parts supplier GPI that have not been mentioned or included in cases that we know of at this time. Mitsubishi Chemical is considered to be one of the largest aftermarket drum producers and would be responsible for significant repercussions if named in a suit or complaint. The rulings in these current complaints will dictate the impact on the industry. It is hard to predict what will come next but many are wondering if the recent Canon actions are aimed at new build compatibles toner cartridges or the aftermarket in general.

In any case, we suspect that there are several other patents in question for new build products and that is not the end of the story. If there are any injunctions or other penalties, this will force aftermarket companies that purchase drums to seek product elsewhere. The Korean drum community may face an immediate significant impact, probably negative, before or after rulings are handed down as aftermarket companies seek other countries and/or companies to purchase drums to use in their aftermarket products that they believe do not infringe patents. Again a lot depends on the outcome of these cases and how this will impact the aftermarket in the future.

Over the past year, there have been several new complaints or legal proceedings involving an OEM company filing against an aftermarket or compatible supplies company. In some cases, the companies involved overlap or are the same companies.  Consider Canon’s recent complaint in June against Ninestar and associated companies for aftermarket toner products mentioned above as well as many other cases involving other OEMs. The trouble with these cases for the aftermarket is that they often take a long time to be decided while legal fees mount as well as other intangible cost, such as the loss of goodwill, grow. The OEMs are known for having deeper resources in terms of money and staff to mount these legal efforts while it can be more challenging for the aftermarket companies. We suspect that this activity is not going to settle down anytime soon and that it could be the beginning of a systematic country by country approach or a consideration of other patents to protect the intellectual property for OEM supplies. In line with our comment in the previous blog, we expect that most aftermarket players are looking forward to having the broad issue of patents sorted out. Some aftermarket companies appear to carefully avoid all possible violation, at a large expense to themselves, while others probably do not. We expect that most would like to know what is and what is not allowed so that all may compete under the same rules.

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