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Countersuit brought against Epson by Green Project Inc.

Issue 0927/2 – In an intriguing retaliation, Green Project Inc., a Californian-based ink and toner cartridge recycler, recently issued a countersuit against Epson America Inc. and Seiko Epson Corp., alleging “trade secret misappropriation and trespass” while denying Epson’s allegation against Green Project of patent infringement.

In June of this year, Epson added Green Project to a lawsuit it had previously filed against a number of third party ink suppliers, where breaches of patents have allegedly occurred, believing Green Project also to be in breach of Epson-owned patents.

In the countersuit, Epson is accused of planting a spy in Green Project, posing as a prospective buyer under an assumed identity and company name, who was able to obtain what is described as ‘competitive business information’ by deceit.

Green Project claims that its business involves only cleaning and refilling used ink cartridges for resale to the public and that there is no patent infringement because the company does not manufacture cartridges.

Thomas Chan, managing partner of Chan Law Group, counsel to Green Project, explains the situation thus, “The law is clear: once the inkjet cartridge is sold to the public by the patent owner, under the well established ‘First Sale Doctrine’, the patent owner’s rights end. Our client takes the discarded cartridge, cleans it and refills it for a subsequent user. In so doing, Green Project preserves the environment, helps the economy by operating a small business and gives consumers an alternate product at a reduced cost.”

This means that an ink cartridge becomes the property of the customer (printer user) and, when exhausted, ownership may be transferred to a recycling company that is essentially free to do with it as it pleases. If this means reverse-engineering and manufacturing a copy of the cartridge that infringes the original manufacturer’s patents, then there is a problem – but only because it involves the manufacture of new, copy cartridges based on intellectual property it does not own. If the company merely cleans the cartridge, fills it with ink and sells it on the open market, the original manufacturer has no claim.

Without knowing the details of the processes used by Green Project in recycling Epson ink cartridges it is impossible to know whether Epson has stepped over the line here in its enthusiasm to protect its patents or whether Green Project does actually have a case to answer. This does, however, again emphasise the seriousness with which printer manufacturers view the issue of patent and intellectual property protection and the potential for third parties to be in breach.

Certainly, if Green Project is only cleaning and refilling the cartridges, as the company claims, and as many other companies do, then Epson’s addition to the original lawsuit was a mistake.

Green project is claiming damages from Epson, together with a court judgement stating that Green Project has not infringed any of Epson’s patents.

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