Ink Cartridge refill

[Franchise Pundit]

Wall St Journal reports that Hewlett Packard is hiring chemists to analyze inks being used by refillers including franchised companies and the large office supply stores. Of concern to any franchisee thinking about investing in one of those franchises.

[Franchise Pundit]

Wall St Journal reports that Hewlett Packard is hiring chemists to analyze inks being used by refillers including franchised companies and the large office supply stores. Of concern to any franchisee thinking about investing in one of those franchises.

What are they looking for?  I doubt it's illegal to manufacture and distribute compatible inks.

[Franchise Pundit]

Patent infringement. Apparently, the inks are rather technologically complex and the manufacturer can determine if a competitor has used the same (patented) ink formula.

[Franchise Pundit]

Article discussing cartiridge refill franchises, patent lawsuits, quality issues, etc: in The Capital Times[/i] (Madison, WI) Oct 12, 2006 reporter Jeff Richgels jrichgels@madison.com:

http://www.madison.com/tct/business/index.php?ntid=102938&ntpid=0

[Franchise Pundit]

HP said the discovery of the infringing InkTec products is the result of ongoing testing and enforcement efforts within the Supplies unit of HP's Imaging and Printing Group. Over the past year, the same initiative has uncovered ink patent infringements by other companies that offer generic ink supplies through refilling stations or "private label" brands.

http://www.digitmag.co.uk/news/index.cfm?NewsID=6521

[michael webster]

I wonder if this isn't simply a scare tactic by HP.

They used to put chips in their ink cartridges to discourage using anything but HP refills, and they weren't alone in this.

Interesting story to follow, though.  I don't suspect that any of the large refilling franchises have a lot of IP talent with which to contest this lawsuit.

Gee, was this risk disclosed in the UFOC?

[Franchise Pundit]

Link to Canon Computer v. Nu-Kote (ink jet refill cartridge patent infringement; I believe this case was ultimately settled out-of-court)
http://www.ll.georgetown.edu/Federal/judicial/fed/opinions/97opinions/97-1248.html

This is a desperate way to attack the validity of patent:
"Nu-Kote argues that the sheer number of named inventors is evidence of the patent's invalidity."  The Court disagreed...."Canon was under no obligation to substantiate each inventor's contribution."

[Jim Coen]

Being a small business owner is tough enough. In the cartridge recycling business you are entering an industry that is controlled by a couple of huge players (HP, Epson, Lexmark).

The inkjet cartridge industry was built on the "razor and blades" http://en.wikipedia.org/wiki/Razor_and_blades_business_model marketing model where the manufacturers sell the hardware at little to no margin (printers) and make high margins on the consumables (cartridges).

All the cartridge recyclers combined have been nothing more than blip on the radar of HP, Epson and Lexmark. If that blip cuts into their profits, the manufacturers could adjust the way they do business and significantly change the industry.

The draw that attracts people to the business is the perceived high margins in ink. if those margins shrink, interest by prospective franchisees will dry up.

Jim Coen
Visit my blog: www.franchiseperfection.com/blog