The US International Trade Commission (ITC) has issued civil penalties in the complaint filed by Epson on March 23, 2006, after finding violations of cease and desist orders and a consent order issues in the original investigation. The ITC has now terminated the proceedings.
The Commission has adopted the recommended penalty for Mipo and Apex, and imposed a lesser penalty on Ninestar.
Related Material
Full US ITC Notice
Recycler Trade Magazine’s interview with Scott Zang of Ninestar, published in the July issue of Recycler Trade Magazine. The interview gives Ninestar’s reaction and perspective on the $20.5m USD fine recommended earlier this year.
Related articles regarding the fines that were recommended in May 2009 and Ninestar’s appeal of the fines
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Ninestar issued the following statement:
“Ninestar Technology Co., Ltd., Ninestar Technology Company, Ltd., and Town Sky, Inc. (collectively “Ninestar”) were extremely pleased that the International Trade Commission (“Commission”) rejected the recommendation of the Administrative Law Judge (“ALJ”) to impose a fine on them in the amount of $20,504,974.16. After the ALJ issued its recommended decision, Ninestar submitted a petition for review. The Commission, after having received Ninestar’s petition for review, ordered further briefing as to the recommended amount. As a result of the arguments presented by Ninestar, the Commission reduced the ALJ’s recommendations from $20,504,974.16 to $11,110,000.00, a reduction of $9,394,974.16.
Ninestar still believes that the imposition of any fine is a fundamental error of law. The penalties were based almost entirely on sales of previously sold cartridges. The Commission applied the Jazz Photo doctrine in determining that there was no extinguishment of patent rights. Ninestar believes that that decision is fundamentally at odds with recent Supreme Court decisions and expects that the Jazz Photo decisions will be reversed, thereby essentially eliminating the penalties against Ninestar.
Ninestar intends to appeal the Commission’s decision and has numerous grounds for doing so, in addition to the inappropriateness of the Jazz Photo decision.
Ninestar is optimistic that it will ultimately prevail in this matter as well as in its ongoing litigation battles with Epson.
Ninestar will continue to service its customers, as it has always done, and there is nothing in the Commission’s decision, which will, in any way, impact Ninestar’s ability to provide products and services to its customers throughout the world.”
Epson issued the following statement:
The U.S. International Trade Commission (“ITC”) imposed penalties this week of $11,100,000 against Ninestar, $9,700,000 against Mipo and $700,000 against Cana-Pacific for violating ITC orders that prohibit imports and sales of infringing cartridges for Epson printers. The penalties against Ninestar and Mipo are among the largest penalties ever issued by the ITC. Over Ninestar’s objections, the penalties were ordered “jointly and severally”, so the parent companies are liable even if their U.S. subsidiaries cannot pay the penalties.
Events leading to the Penalties
In 2005, hundreds of exporters and U.S. distributors were infringing Epson’s ink cartridge patents despite many year