HP Uses Education to Rid the Markets of Infringing Consumables

The American author and poet Maya Angelou once said, “When you know better, you do better.” Hewlett Packard appears to have taken Dr. Angelou’s words to heart in its ongoing effort to eradicate from the market cartridges that violate its intellectual property. Rather than file a bunch of lawsuits to protect its IP, over the past few months, the OEM has launched an educational initiative so the industry will know better than to market infringing consumables for LaserJet machines.

The educational campaign began last year when HP set up to explain how chips used on certain third-party toner cartridges are violating its trademarks and branding and misleading the end user. The firm published a technical white paper in the autumn detailing the problem as well as how it can be avoided. It also dispatched representatives to educate remanufacturers as to how the microchips they use to produce non-OEM cartridges can be designed to prevent their products from generating erroneous messages. In December, the company updated the white paper and it appears it will continue to dispatch HP representatives to spread the word in 2014.

Hip to the Chip

The OEM’s chip program seeks to ensure the messaging functionality built into certain cartridges and printers can properly identify the consumables being employed by the device and communicate that information to the device’s front panel user interface. The white paper explains that chips are programmed to distinguish between a “genuine HP” cartridge and a “non-HP supply.” It contends that “Manufacturers of aftermarket chips deliberately identify themselves as ‘genuine HP’ in order to more favorably position their products with their customers.” HP then warns, “Cartridges that misidentify themselves as HP when they are really alternatives are counterfeit or otherwise engaging in deceptive brand identification.”

HP’s white paper explains that printer firmware looks for messaging code in a single data field on each cartridge’s chip. The firmware then differentiates between OEM and non-OEM cartridges by reading a string of ASCII characters entered into this so-called trademark field in the chip’s data structure. According to HP, third-party chipmakers need only “locate the trademark field within the applicable data structure and change the string of ASCII characters from ‘HP’ followed by 6 spaces to some other value.” While HP says any other value is acceptable, it recommends that chipmakers insert their own respective trademarks or those of the remanufacturer that is using the chip.

HP’s concerns are focused on the messages generated by a specific list of SKUs (see table). In its original white paper, which was released in October, the list of cartridges included 22 SKUs that are employed in some 17 LaserJet/Color LaserJet product lines. When the company then revised the white paper at the end of the year, it added 13 SKUs used in 7 additional product families. HP maintains that for these SKUs, “identifying a cartridge as non-HP will not result in a loss of features or degraded performance.” Going forward, HP indicates that third-party chip manufacturers must ensure that the functionality in any new cartridges released in 2014 and thereafter generate the appropriate messages.

Heeding the Call

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HP has been active in getting the word out about the problems it has with certain third-party chips. It is clear that the OEM is serious about dissuading non-OEM chipmakers from the practice of using code that does not identify cartridges properly when they are installed into a printer. The use of terms in the white paper like counterfeit and deceptive brand identification signal that the OEM is not fooling around. Let’s face it, words matter, and the word counterfeit matters a lot.

As I noted, representatives from HP have been dispatched to explain the chip problem to the remanufacturing industry. Back in October, they traveled to Zhuhai, China to talk about the messaging issues and how they can be avoided. Located in the southern province of Guangdong, Zhuhai is home to many third-party ink and toner cartridge manufacturers along with various companies that make components including chips that support the industry.

The HP reps attended a gathering of some 200 remanufacturers from more than 40 countries hosted by the Chinese media firm Recycling Times Media Corp. HP’s speakers made it clear that the misleading messages generated by many third party chips infringe HP’s trademarks and mislead end users. Since then, HP has sent speakers to similar events including the Paperworld show held in Frankfurt, Germany at the end of January.

Many third-party chipmakers and their customers have heeded HP’s warning. At the time of the Zhuhai event, HP’s reps identified Static Control Components as the lone firm marketing chips that properly differentiated OEM from reman cartridges. Since that time, various firms including the German remanufacturer supplier Delacamp along with third-party supplies vendors like Ninestar and Print-Rite have issued statements saying their chips or remanufactured cartridges generate the appropriate messages.

Not an Empty Warning

Companies that market third-party consumables for LaserJet machines should realize that HP can—and most likely will—initiate legal actions against those who do not heed its warnings. HP is a successful litigator with a long track record of lawsuit wins dating back to the 1990s. While most of HP’s past lawsuits were centered on inkjet cartridges, things appear to be changing. HP’s legal group is showing a new willingness to protect the market for LaserJet-branded supplies. In 2013, HP sued the giant online retailer LD Products for violating the Lanham Act and various other laws by falsely marketing and selling new-built compatible LaserJet cartridges as remanufactured. I suspect that was only the first suit involving toner cartridges and with the chip issue more will follow.

With that said, I find HP’s decision to educate rather than automatically initiate lawsuits refreshing. On our website, http://www.Action-Intell.com, we follow intellectual-property issues closely. Unfortunately, it seems that certain OEMs use their IP more as a weapon than as a shield to protect their products and business. For the past couple of years, for example, Lexmark has leveraged a quirk in U.S. patent law to the detriment of its channel, in my opinion. The firm has accused scores of companies of marketing remanufactured cartridges that violate its patents simply because the empty cartridge being refurbished was first sold outside of the country. A technicality in U.S. patent law requires a product to be sold in the U.S. in order for a patent holder to lose its rights. Because it retains its patent protections, Lexmark has warned companies to sell its consumables exclusively or else risk a lawsuit. So much for a free market!

Don’t get me wrong, gentle reader. HP is not to be trifled with when it comes to IP. The OEM has hauled plenty of companies into court and that will continue. I fully expect that after some period of time, HP will shift from its role as an “educator” to that of an “enforcer.” When that day comes, any claims that a firm may make that it didn’t know any better than to use IP infringing chips will sound hollow.

Not an Empty Warning

Companies that market third-party consumables for LaserJet machines should realize that HP can—and most likely will—initiate legal actions against those who do not heed its warnings. HP is a successful litigator with a long track record of lawsuit wins dating back to the 1990s. While most of HP’s past lawsuits were centered on inkjet cartridges, things appear to be changing. HP’s legal group is showing a new willingness to protect the market for LaserJet-branded supplies. In 2013, HP sued the giant online retailer LD Products for violating the Lanham Act and various other laws by falsely marketing and selling new-built compatible LaserJet cartridges as remanufactured. I suspect that was only the first suit involving toner cartridges and with the chip issue more will follow.

With that said, I find HP’s decision to educate rather than automatically initiate lawsuits refreshing. On our website, http://www.Action-Intell.com, we follow intellectual-property issues closely. Unfortunately, it seems that certain OEMs use their IP more as a weapon than as a shield to protect their products and business. For the past couple of years, for example, Lexmark has leveraged a quirk in U.S. patent law to the detriment of its channel, in my opinion. The firm has accused scores of companies of marketing remanufactured cartridges that violate its patents simply because the empty cartridge being refurbished was first sold outside of the country. A technicality in U.S. patent law requires a product to be sold in the U.S. in order for a patent holder to lose its rights. Because it retains its patent protections, Lexmark has warned companies to sell its consumables exclusively or else risk a lawsuit. So much for a free market!

Don’t get me wrong, gentle reader. HP is not to be trifled with when it comes to IP. The OEM has hauled plenty of companies into court and that will continue. I fully expect that after some period of time, HP will shift from its role as an “educator” to that of an “enforcer.” When that day comes, any claims that a firm may make that it didn’t know any better than to use IP infringing chips will sound hollow.

Charles Brewer
About the Author
CHARLES BREWER is the president of Actionable Intelligence, the digital imaging industry’s leading market research firm. A veteran of the U.S. Navy and the Massachusetts National Guard, he holds a BA and MA from the University of Massachusetts-Boston and was an editor for Inc. magazine and ComputerWorld during the 1990s. He was the managing editor of The Hard Copy Supplies Journal, which was published by Lyra Research. In 2009, Brewer launched Actionable Intelligence and its website (www.Action-Intell.com), which is visited by thousands of industry decision-makers each week. In addition to the website, Actionable Intelligence provides custom research to hardware and consumables manufacturers as well as to various industry stakeholders such as Wall Street analysts and law firms.