Ink cartridge firms accused of copying
By Jiang Wei (China Daily)
Updated: 2006-03-16 05:56

China's exports of ink cartridges could be hit hard because Japan-based company Epson has filed a petition against Chinese firms over alleged violation of its patents.

Epson filed a complaint last month with the US International Trade Commission against 24 companies, based in China, the United States and Britain.

These firms manufacture, import, or distribute ink cartridges for printers that are for sale in the United States, according to information from the commission.

Epson wants the commission to ban the companies from importing or selling the cartridges in the US.

The commission is scheduled to officially launch its investigation under section 337 of the US Tariff Act this week.

In parallel with this case, the Japanese company has also filed a lawsuit at the US District Court in Portland against the same companies seeking damages for alleged intellectual property infringements.

The claims have caused great concern among Chinese printer makers, as half of the defendants are major Chinese producers and their subordinate trading firms overseas.

Some insiders have warned that the investigation, which they described as a "weapon of mass destruction," could deal a massive blow to the sector.

Section 337 prohibits the import of articles that infringe valid US patents, registered copyrights, or registered trademarks. Experts believe the impact of section 337 is more severe than any other anti-dumping action.

Cai Xiaomin, a legal expert with Guangdong General Chamber of Commerce, was quoted by China Business News as calling for all enterprises involved to respond to the allegations.

Cai said if Epson's allegations were proved, even products using cartridges as components would not be allowed to be exported to the US.

In previous section 337 investigations, many Chinese firms have given up defending themselves as they were not able to afford the high lawyers' fees, usually millions of US dollars for a single case.

Cai suggested that Chinese firms get together to co-ordinate their response with the help of related industrial associations so as to reduce costs.

Investigations under section 337 usually take about 12 months to be completed.

In the past several years, Chinese firms have undergone more section 337 investigations than ever before.

Last year Chinese enterprises, from floor makers to television makers, were accused of infringing US enterprises' intellectual property rights in eight separate cases.

Most completed investigations have resulted in the allegations being proved.

Chinese DVD player manufacturers have been involved in intellectual property right infringements, and have started to pay patent fees to a number of well-known foreign companies, including Toshiba, Panasonic, JVC and Matsushita.

(China Daily 03/16/2006 page9)