CEBIT - Ink-jet cartridge makers criticize Epson lawsuits

Makers of third-party ink-jet printer cartridges and refills don't believe a recent string of lawsuits by Epson will stop the industry, they said at Cebit.

Makers and resellers of third-party ink-jet printer cartridges and refills polled at the Cebit show in Germany on Saturday are critical of the way Seiko Epson has been hitting their kind with lawsuits to protect its lucrative cartridge business.

[See below for Epson's response -Ed.]

Japan's Seiko Epson, the world's number two printer maker, filed complaints against 25 companies in the U.S. and U.K. in February seeking to bar the manufacture, import, or distribution of aftermarket ink cartridges in those countries.

Aftermarket cartridges typically cost much less than official cartridges and threaten the printer maker's business model, which relies on selling a low cost printer and making profits from future sales of ink.

"They're stealing money from customers. They give them a free printer and then steal their money," said Brian Suh, marketing director of South Korea's EC World, which makes ink-cartridge refill kits that allow consumers to replenish used cartridges.

Suh said he thinks printer makers have gotten steadily greedier in the last few years and consumers are being treated unfairly. However that view wasn't shared by all at Cebit.

"We are okay with what Epson is doing," said Richard Keller, manager of technical engineering at 3T Supplies AG of Schindellegi, Switzerland. The company, which trades under the Peach name, develops compatible cartridges in Switzerland and manufactures them in the Czech Republic.

"Low-quality copies ... are not good because the whole price system collapses and it hurts the industry," he said. "But the way they [Epson] are doing it is very aggressive."

Epson fought similar battles successfully in 2005. It reached settlements with Multi-Union Trading Co., of Hong Kong and the U.K.'s Environmental Business Products and CybaHouse that saw all three companies stop importing and selling Epson-compatible cartridges in the U.S. and U.K. markets.

The cases publicized by Seiko Epson to-date have ended with out-of-court settlements so the industry remains unsure just exactly where the line between patent infringement and innovation lies.

"The whole situation with Epson, the patent issue, we have to be careful," said 3T Supplies' Keller. "We believe our products don't infringe their patents. We have developed around them. We have our own patents."

The lack of a clear legal ruling is what's enabling Epson to go after small companies, said Udo Rossner, head of sales at JR Inkjet Deutschland.

"As long as there is not a court case they can go around shouting because they know tiny little companies can't go to court," he said. "If all the manufacturers got together and defended it as one it would be a big problem [for Seiko Epson]."

He believes Epson will never be able to completely control the market, especially due to its international nature, but that it might be easier to control through legal means in the U.S. than in Europe.

In the U.S. its easy because corporations have more rights than consumers," he said. "But in continental Europe the consumer has damn hard rights. If they lose one case, they lose it all."

Epson Responds

Epson has developed intellectual property [IP] that drives its inkjet printers and cartridges at great cost, and has protected that IP by the internationally accepted practice of registered patents. Those patents are being violated and the IP is being illegally or improperly used by third parties to make money.

Epson is doing neither more nor less than seeking to prevent unauthorised use of its intellectual property under accepted law.

Epson completely rejects the assertion that by asserting its rights under those patents it is in any way bullying smaller competitors, or "stealing money from customers". In fact it is the pirates infringing Epson's patents who are stealing money from both Epson and its customers.

Epson wants to protect its customers from mistakenly buying poor quality cartridges and ink in the belief that they will get the same high standards of materials and production values that Epson uses.

We have already observed in Australia instances of a third party ink/cartridge combination dissolving the ink feed nozzles on our printers. Many of the inkjet printer faults reported to our service centre result from the use of third party cartridges and inks.

When this happens customers often blame the printer for malfunctioning - thus blame Epson - without considering that it may be the quality of the cheap third party materials and workmanship that is at fault.

Regards,

Mike Pleasants
Director or Marketing Communications
Epson Australia

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