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Supplies Under Scrutiny in Europe and Russia Supplies Under Scrutiny in Europe and Russia Legal Disclaimer Solore quibus coreperatiis am rem vent utem ut fugitiisqui dolor ad quo molupta ectibusam, inverov itatist aut acepediam ipsusanda voluptinis ipsae sunt. Arci nonseror rehenienes erentia vento beature doluptat. Acimendae volorum ate et la sum lit alique excearu mquasit quibus nis dolupta tibereictet harchil lautemquam ventia volupta temquiam fugia aut ero quati imintest rehentur? Xerem ut optibea quam re sincimincto consequi abore natus eum aut laut event utaerovit illorio. Nam eturem ad quatem. Nam, simil enimaxi moluptatur, quatqui omnistrum simusandae pro imi, ut eatem ent faceped moluptate nulpa. Id quiaes entotasim volut facesto custia ditae nulliquam, es re ne consequi blabori onsequam volenis sitatet underov iducius aeratis evel eum aut magnis dolut laborrum a cus et, culla pos moluptas aut officiduci ipsaerio explis que nihitam ventis maxim estio eos molupta cullis eos et etur? Qui tota por maio ilignis tiatur mo qui ut doloriae nis nobis iur a verunt mos alit por molore antiam sum rest pos ese rest, cus doluptaque peruptu Actionable Intelligence Whitepaper | SUPPLIES UNDER SCRUTINY IN EUROPE AND RUSSIA Copyright Notice Copyright © Actionable Intelligence, 2014. All Rights Reserved. No part of this report may be reproduced without the express consent of Actionable Intelligence. © 2014 Actionable Intelligence » THE PRINTER AND SUPPLIES INDUSTRY’S LEADER FOR NEWS AND ANALYSIS 1 Actionable Intelligence Whitepaper | SUPPLIES UNDER SCRUTINY IN EUROPE AND RUSSIA Table of Contents Introduction ........................................................................................................... 3 OEMs Fight Back .................................................................................................. 5 The Pelikan Briefs ................................................................................................. 6 Epson: Euro Clone Warrior ................................................................................... 8 Epson v. Medea … and Ninestar .......................................................................... 9 Toner Troubles .................................................................................................... 10 Samsung Goes to Court ...................................................................................... 11 Canon Takes Aim at Infringers ............................................................................ 12 It’s Not Just about Toner ..................................................................................... 14 Epson Battles in the UK, Again ........................................................................... 15 More to Come—Much More ................................................................................ 16 © 2014 Actionable Intelligence » THE PRINTER AND SUPPLIES INDUSTRY’S LEADER FOR NEWS AND ANALYSIS 2 Actionable Intelligence Whitepaper | SUPPLIES UNDER SCRUTINY IN EUROPE AND RUSSIA Introduction Although lawsuits in the United States involving digital imaging consumables get all the attention, Europe has had its share, too. The availability of patent-infringing ink and toner cartridges is on the rise in the region, and these products are disrupting the market in Europe for digital supplies. While European cases may get short shrift in the industry press, don’t be fooled. Hardware manufacturers have settled numerous lawsuits with European firms stopping them from marketing products that violated OEM intellectual property (IP). Often these settlements require violators to pay the OEM an undisclosed amount, and we estimate millions of euros have been exchanged as a result. While the list of offenders is now long, it is still growing as even more OEM lawsuits are filed in European courts. There are essentially five categories of ink and toner cartridges (see table on the following page). From a legal perspective, OEM cartridges are, of course, the safest for the channels to market. Generally remanufacturing is permitted under patent law, so companies can safely sell remanufactured cartridges as long as all the materials used during the refurbishing process do not violate any OEM IP. Likewise, newly constructed compatible cartridges can be free of any legal snares if the manufacturer diligently reviews all of the IP represented in the design of the original OEM product and painstakingly works around each patented technology. The other two categories in the grid are manufactured without regard for IP, and marketing products in either category can land a vendor in legal hot water—very hot water. Counterfeits are sold to unwitting customers who believe they are purchasing genuine OEM cartridges while infringing compatible cartridges are copied directly from the original OEM cartridge and manufactured with no consideration of the patented technologies. These infringing compatibles, also known as “clones,” are often marketed either as non- infringing compatibles or increasingly as remanufactured cartridges. While OEM, remanufactured, and non-infringing compatible cartridges are legitimate, counterfeits and clones are illegal, and they are at the center of the growing number of OEM lawsuits. © 2014 Actionable Intelligence » THE PRINTER AND SUPPLIES INDUSTRY’S LEADER FOR NEWS AND ANALYSIS 3 Actionable Intelligence Whitepaper | SUPPLIES UNDER SCRUTINY IN EUROPE AND RUSSIA Hapless firms ignorant of the fact that the products they sell are infringing are liable for damages nonetheless. Ink and toner cartridges contain essential cartridges are simply copied. They printing technologies, and OEMs invest require no empties so the fixed costs of heavily in the research and development acquiring and inventorying cores are of consumables. Because cartridges non-existent. Because the costs are often contain a wealth of IP, those in the artificially cheap, clone manufacturers channels that sell third-party are able to bring products to market at a consumables must be certain the fraction of the cost of legitimate third- sources for the products they market party supplies. Clones are often priced are legitimate. Increasingly, the well below the price of remanufactured channels are at risk of selling cartridges and non-infringing newly built that infringe OEM patents. Europe has a compatibles, and legitimate third-party well-established and legitimate third- supplies vendors find clones impossible party supplies industry that is supported to compete with because they are so by diverse channels including inexpensive. In order to preserve their distributors and wholesalers, retailers sales, a growing number of legitimate and resellers, various equipment European firms find that they must sell dealers, and many others. Without clones or exit the market. Clones have constant vigilance, however, even long- gained market share at the expense of time vendors marketing third-party OEMs and remanufacturers alike. supplies can be unaware that they are Manufactured mainly in Asia, clones selling infringing products, which places have had little trouble slipping through them in jeopardy of lawsuits. Hapless Europe’s many entry points. Because of firms ignorant of the fact that the its long and porous border with Africa products they sell are infringing are and certain Eastern European countries liable for damages nonetheless. where patent-holder rights and other IP There are few R&D costs associated with protections are largely ignored, the counterfeits and clones because the European Union’s markets are highly © 2014 Actionable Intelligence » THE PRINTER AND SUPPLIES INDUSTRY’S LEADER FOR NEWS AND ANALYSIS 4 Actionable Intelligence Whitepaper | SUPPLIES UNDER SCRUTINY IN EUROPE AND RUSSIA susceptible to clones. Estimates business as infringing products continue German Customs published by IDC in 2013 indicate that as to flood the market and print volumes many as one in five toner cartridges have tumbled along with the rate of authorities, currently sold in Western Europe are consumption of toner and ink cartridges. flanked by infringing new-builds. This year, IDC Since 2013, OEMs have been active in representatives released more narrowly focused the courts in Germany, the Netherlands, from HP, Konica research finding that one-third of the Poland, Spain, the United Kingdom, and, consumables (ink and toner) shipped in most recently, France and Russia. Minolta, and Russia, Poland, Hungary, and the Czech This year started with a dramatic Lexmark, Republic are now new-build compatibles. demonstration of just how serious OEMs searched for European vendors say that clones have are about protecting their IP in Europe. penetrated many of the region’s larger infringing Raids were conducted at the 2014 retailers, and as in the U.S., clones are Paperworld event in Frankfurt, Germany, consumables also widely available on the Internet. as German Customs authorities, flanked among the OEMs Fight Back by representatives from HP, Konica exhibits on the Minolta, and Lexmark, searched for The OEMs’ war on clones is not new, but trade-show floor. infringing consumables among the it is intensifying. Before the recession, exhibits on the trade-show floor. several hardware manufacturers Paperworld hosts one of the European including Canon, Epson, and HP filed third-party supplies industry’s most suits in Europe. Over the past couple of important annual events, years, OEMs have felt an even greater Remanexpo@Paperworld, which attracts need to protect their consumables remanufacturers from across Europe as German
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