Current Trends of Recharger Litigation and Risk Mitigation

SPEAKERS

Roland Tong, Esq.:

Brooks Kushman, P.C. – Senior Patent Attorney

Peter Bauman, Esq.:

Tharpe & Howell, LLP – Senior Associate

Brief History Patent Issues Affecting Recharger Industry

1. Technology Involved

2. Manufacturer Designs

3. Toner Technology

Patent Infringement Cases Filed By HP

Hewlett-Packard Company v. Ninestar Technology Co Ltd

Hewlett-Packard Company et al v. Microjet Technology Co, Ltd et al

Patent Infringement Cases Filed By Lexmark Lexmark International, Inc. v. Ink Technologies Printer Supplies, LLC

Patent Infringement Cases Filed By Epson

Seiko Epson Corporation et al v. Abacus 24-7 LLC et al

Seiko Epson Corporation et al v. Inkjetmadness.com, Inc. et al

Seiko Epson Corporation et al v. E-Babylon, Inc. et al

Patent Infringement Cases Filed By Canon Canon Inc. v. GCC International Limited

Canon Inc., v. Densigraphix Kopi Inc.

Canon, Inc. v. Ninestar Image Int'l, Ltd.

Canon Inc. v. Clover Holdings, Inc. et al

U.S. patents asserted:

5,903,803 and 6,128,454

5,903,803

Claims 1. An electrophotographic image forming apparatus for forming an image on a recording material, comprising:

an electrophotographic photosensitive drum; charging means for charging said photosensitive drum; developing means for developing a latent image formed on said photosensitive drum into a toner image; transfer means for transferring the toner image onto the recording material; fixing means for fixing the toner image on the recording material; a motor; a driving rotatable member for receiving a driving force from said motor; a twisted hole substantially coaxial with said driving rotatable member, said hole having a polygonal cross-section; a twisted prism projection provided at a longitudinal end of said photosensitive drum, wherein when said driving rotatable member rotates with said hole and projection engaged with each other, a rotational driving force is transmitted from said driving rotatable member to said photosensitive drum through engagement between said hole and said projection with said projection being pulled into said hole; and

moving means for imparting relative movement between said hole and said projection in a longitudinal direction of said photosensitive drum.

6,128,454

6,128,454

4. A process cartridge which is detachably mountable to a main assembly of an electrophotographic image forming apparatus for forming an image on a recording material, the apparatus including a motor; and a driving rotatable member for transmitting a rotational driving force from said motor and having a twisted hole formed therein at a central portion thereof having a non-circular cross-section with a plurality of corner portions, said process cartridge comprising: an electrophotographic photosensitive drum; process means actable on said electrophotographic photosensitive drum; and a twisted projection provided at a longitudinal end of said electrophotographic photosensitive drum and having a non-circular cross-section with a plurality of corner portions, said twisted projection being engageable with the twisted hole, wherein the rotational driving force is transmitted from said driving rotatable member to said electrophotographic photosensitive drum by engagement between the twisted hole and said twisted projection, and wherein said twisted projection is urged toward the twisted hole when said driving rotatable member is rotated with said twisted projection being in engagement with the twisted hole when said process cartridge is mounted to the main assembly.

ITC PROCEEDINGS INITIATED BY OEMs

What is the US International Trade Commission (ITC)? 1. Independent non-partisan federal agency

2. Administers import injury investigations

3. Oversees IP Based import investigations under Section 337 of the Tariff Act of 1930

4. Patent cases involving imports that are alleged to infringe a US patent

5. Besides patent cases, Section 337 includes registered trademarks, copyrights, gray markets good cases, unfair competition, antitrust, and trade secret cases, products liability, violation of US environmental laws, child labor and other human rights violations

Elements of a Section 337 Case

1. Domestic industry related to the patent at issue

– Significant investment in plant and equipment

– Significant employment of labor or capital, or

– Substantial investment in exploitation, eng’g, R&D

• Manufacturing not required, sales and marketing not sufficient

– Nexus between its litigation expenses and licensing

2. Importation of products by respondent

3. Unfair act e.g. infringement of a valid patent

Remedies:

1. Exclusion Order directing US Customs to exclude goods

from entering the US

2. General exclusion order, limited exclusion order

3. Cease and Desist Orders preventing sale

4. Distribution or infringing use of imported products

5. No monetary remedies

6. Violation of Orders can lead to civil penalties

7. Ninestar $11,110,000

Timeline: 1. File Complaint 2. Day 30- ITC decision to investigate 3. Day 75- set target date 4. Date 75-280: case development 5. Discovery, experts, motions, settlement conferences (3-4),

summary determinations, hearing prep 6. Hearing day 280 7. Initial determination on liability day 395 8. Recommended determination on remedy 395-455 9. Remedy and public comment day 455-515 10. Target date 515 days 11. Presidential review 515-575 days 12. Final decision day 575 13. Appeal to federal circuit

Differences between: District Court and ITC

1. Types of relief

a.Damages, injunctive relief in DC

b.Exclusion and Cease and Desist Orders in ITC

2. Availability of jury trials

a.No jury trials in ITC

3. Time limit of 12-16 months in ITC vs. 3 or more years

in DC

Advantages of Going Though: ITC vs. District Court 1. 12-16 months decision

2. Name all known companies in one proceeding

3. Customs enforcement of the orders

4. Administrative law judges with experience in patent

cases

5. The grant of permanent injunctions may be

uncertain in district courts post eBay

Risk Management

1. Structuring for Asset Protection

- Asset identification

- Asset development

- Asset protection

- Entity Formation & Structuring

- Maintaining Entity Protections

Risk Management

2. Risk Mitigation through Contracts

- Vendor Agreements

- Supplier Agreements

- Customer Agreements

- Real Estate Agreements

Risk Management

3. Available Insurance

- Advertising Injury

- Specialty IP Related

- Breach of Contract Attorney Fee

- Personal Guarantee

**Ongoing Consultation with Broker**

Risk Management

4. Building Value to resolve disputes

- Customer Lists

- Distribution Network

- Recharging Equipment

- Derivative Works

- Pricing Lists

- Component Suppliers

Receiving a Cease & Desist Demand

- What to do first

- When to get counsel involved

- What type of counsel to hire

- Measures to protect evidence

Receiving an ITC Complaint or Lawsuit

- What to do first

- When to get counsel involved

- What type of counsel to hire

- Measures to protect evidence

Resolution of ITC Complaint or Lawsuit

- Cross-Licensing

- Litigating Efficiently

- Inventory Issues

- Continuing Jurisdiction of Court

Thank you - Questions? Roland Tong

Brooks Kushman, PC 601 S. Figueroa Street, Suite 2080

Los Angeles, CA 90017-5726 Main: (213) 622-3003 | Direct: (213) 622-3096 | Fax: (213) 622-3053

rtong@brookskushman.com www.brookskushman.com

Peter Bauman

Tharpe & Howell, LLP

15250 Ventura Blvd., 9th Floor

Sherman Oaks, California 91403

Main: (818) 205-9955 Fax (818) 205-9944

pbauman@tharpe-howell.com

www.tharpe-howell.com; www.commercialcounselor.com