Epson has become one of the major players in the inkjet printer industry in recent years. The surge in their popularity during the last 4 – 5 years was in part fueled by the availability of less expensive compatible inkjet cartridges. Compatible cartridges were once considered just an annoying hindrance to Epson corporate profits, but grew into a legitimate threat to their supplies monopoly. After over a year and a half of legal wrangling in and out of court, it looks like Epson has dealt a hefty blow to the compatible cartridge industry in the United States.
Compatible cartridges are generally defined as new cartridges that are made by a manufacturer other than the OEM (Original Equipment Manufacturer), in this case Epson. There are dozens of companies throughout the world who manufacture their own compatible brand of inkjet cartridges that work in Epson printers, some better than others. The success of the compatible cartridge was due to the high price of Epson OEM inkjet cartridges. Epson inkjet cartridges were expensive, so a consumer could save substantially with the use of non-Epson cartridges.
As the retail price of Epson printers dropped over time to compete with other brands, the volume of ink in their cartridges shrunk, which increased the frequency that consumers needed to purchase supplies. Epson became more reliant upon heavy margins on the printer supplies side of the business, to subsidize the lower selling price of their printers. Once a printer was purchased, the use of OEM supplies quickly paid for the discounted printer retail price while filling the company coffers with cash. This new “razor and razor blade” business model (not exclusive Epson) was only polarizing the advantages of using compatible inkjet cartridges.
Years ago, the compatible cartridge was sneered at as an inferior product by some consumers. Over time, many Epson printer owners gained confidence and even devout loyalty to particular brands of compatible cartridges. Compatible cartridge quality reviled Epson’s own brand but at a fraction of the cost. Fast-forward to 2007 and roughly 20% of all Epson printer owners now use compatible inkjet printer supplies in their machines.
This growing loss of revenue would motivate Seiko-Epson Corp. to file a complaint with the ITC in February 2006 against the 24 U.S., South Korean, German, Hong Kong and Chinese companies alleging infringement against 11 Epson patents.
Generally speaking, the infringement allegations centered on compatible cartridge design. In most cases, the cartridge looked noticeably different from the OEM, however, some basic cartridge components like the utilization of a vent or use of a certain type of sponge in the cartridge were accused of being too similar to the Epson brand cartridges.
Many companies named in the lawsuit settled with Epson before going to court and agreed to stop importing the cartridges in fear of the financial liability assumed when fighting a legal battle with such a large company.
In January 2007 a hearing was held where a few of the remaining 24 compatible manufactures presented arguments to judge Luckern. According to Epson “The judge found that more than 750 models of cartridges imported by the defending and defaulting respondents infringed on at least 1 of the 11 patents in question.”
At the same time, Epson filed a civil lawsuit against the same companies to stop the sale of compatible ink cartridges that infringe upon its patents.
The ITC (International Trade Commission) then studied the initial determination from judge Luckern and set a final determination date of July 30, 2007. The decision was postponed until Sept 20th, and then it was delayed again.
On October 19, 2007 the U.S. International Trade Commission (“ITC”) issued a Final Determination that banned most of the Epson compatible cartridges available on the market today from being imported into the United States.
Now we are in a 60-day “Presidential review period” in which compatible cartridges may still be imported but only with a $13.60 bond payment per cartridge that will be forfeited if the ITC ruling is not reversed, which does not seem likely.
There are still a few compatible cartridge models that can still be legally imported and sold according to the ITC ruling. Some older Epson compatible cartridge models will change slightly in design and other wide format compatible cartridges will not change at all. Consumers who buy these styles of compatible cartridges will be affected the least by the decision.
However, most models of compatible cartridges look like they will disappear for good once the current supplies dwindle from retailers. Epson printers that have been purchased recently will be affected the most, as reflected by the spike in purchases from people hoping to buy up the remainder of low cost compatible cartridges on the market.
“When one door shuts, another one opens.”
The supplies aftermarket is not giving up. There are now two types non-Epson printer supply products that had been developed while the legal battle took place over the last 18 months. Some of the remaining companies, who fought Epson, are now producing re-manufactured Epson cartridges.
The basic definition of re-manufactured inkjet cartridge, is a cartridge that has been collected through various recycling programs and reworked. The cartridge is drained of any remaining ink, flushed with cleaning solution, ultrasonically cleaned, and new parts installed where needed. Once prepared, they are refilled with new high quality ink, print tested to ensure proper performance, and then repackaged again for reuse.
Fortunately, due to the relatively simple non-printhead design, a re-manufactured Epson cartridge will perform as well as the previous compatible cartridges. The only drawback is that it may cost a little more due to the additional labor used to produce the product.
Chances are however; that the money saved will still be substantial, versus buying a new Epson brand inkjet cartridge. Look for these new products to be available in the coming months.