A Federal Court judge has found that Calidad, a Sydney-based supplier of remanufactured ink cartridges, infringed on patents held by Epson. Calidad, however, is free to continue trading in remanufactured cartridges.
Epson alleged that Calidad had removed or obscured Epson trademarks from its products in a breach of statutory duty, engaged in misleading or deceptive conduct with one of its online advertisements, and breached a 2013 settlement deed from an earlier trademark lawsuit. Calidad sells aftermarket ink cartridges in Australia supplied by Malaysian company Ninestar, which refills used cartridges with fresh ink for resale.
In a judgement handed down late last year, Federal Court Justice Burley found that several Calidad products not sold since 2016 did infringe on Epson's patents, but current products did not. The judge also ruled that Calidad had breached its settlement with Epson, but inadvertently: a number of cartridges Calidad had previously agreed not to resell were returned from a Harvey Norman store in an Epson box, which were then sold to an Epson 'trap purchaser', explained James Kenyon, sales manager at Calidad.
In the ruling, Justice Burley wrote: "I am satisfied by the explanation provided by Mr Kenyon that the sale of the generic cartridges arose as a result of a series of unfortunate events, and that the system now in place ensures that there will be no repetition. I would not make injunctive orders in respect of potential future conduct in circumstances where Calidad has no intention to repeat it, and has put in place systems to ensure that it does not occur again."
Epson's claim of misleading or deceptive conduct was dismissed, with the judge finding that the use of the word 'new' in the online ad did not imply the product was not remanufactured. "I find that a reasonable consumer, having regard to the webpage and seeking to purchase a Calidad cartridge, would understand the word 'new' to be an assertion that it is a recently available Calidad product," Justice Burley wrote.
Robert Cooper of MinterEllison, attorneys for Calidad, said the case had important implications for companies dealing in repaired or remanufactured products, and possibly second-hand goods as well. "This case unveils the complexities involved for these companies. The outcome in each case is likely to be highly dependent on their own facts. Relevant factors that will likely affect the outcome of any such case include, for example, the types of products, the repair/remanufacturing processes that are undertaken, the location that the processes are performed in and the patents involved," said Cooper.
Epson representatives were unavailable for comment; however, the company has long been opposed to the use of third-party inks in its printers, saying in 2007 that tests demonstrated a poor lifespan for prints with Calidad products.