By Ed Avis
The struggle between HP and Memjet over patents for large-format, single-pass inkjet printing has been going on since Memjet filed a patent infringement suit in August. The fight has become an international affair, with a German court issuing an injunction and subsequently pulling it. And HP has gone on the offensive with counter-claims of patent infringement against Memjet.
But what does all this mean for the reprographics business? Single-pass large-format inkjet technology could play an important role among large-format providers, and the outcome of this battle could have an impact on which of the two big players dominates the field. Or, more likely, both technologies will emerge from the fray still intact, if somewhat poorer.
Suits and Countersuits
Memjet started the tussle by filing a patent infringement suit in the Southern District of California federal court in San Diego on August 11. The suit alleged that HP violated eight Memjet patents for various elements of the single-pass inkjet heads.
About six weeks later HP struck back in its reply to the original suit. It stated that not only did it not violate any Memjet patents, but in fact Memjet violated seven HP patents.
This tit-for-tat has continued until now – the latest court filing was February 11, when HP responded to Memjet’s response to HP’s counterclaims…you get the picture.
German Surprise
Reprographics shop owners watching this ping-pong game were barely stifling their yawns when a bombshell dropped in mid November. Evidently Memjet had filed suit in Munich, Germany as well, knowing that the German courts move decisively on these types of issues. And decisive they were: The judge issued a temporary injunction that effectively shut down sales and marketing of PageWide in Germany. The judge evidently felt the evidence was strong enough that immediate relief was called for (read the release about the injunction here).
Achim Carius, the executive director of the German reprographics association, motio, immediately took notice of the situation because a number of his members are HP or Memjet dealers, or are otherwise interested in the technology. Carius is an attorney, and he’s well connected, so his articles on the topic were enlightening (click here to read the English translation of his first article on this topic).
Carius made several points about the situation in Germany that American HP and Memjet dealers may be interested in.
First, the injunction hit the HP PageWide dealers hard – suddenly a product they were excited about selling was off limits to them. Theoretically they could have sought suppliers outside Germany, but Carius’ article warned them that ultimately the injunction would probably apply to their sales efforts as well. (One of these HP dealers is also a Xerox dealer, and Xerox makes a Memjet-based printer, so he had a replacement product at hand.)
Second, he noted that the issue also affected his members who were not dealers, but who have PageWide equipment installed in their shops. Even if nothing happened to their hardware, getting new heads or other supplies suddenly became difficult.
The third point that Carius made was that perhaps the lawsuit would eventually prompt HP to acquire Memjet (he drove home this point with an illustration showing a Memjet logo in a shopping cart with HP-logo wheels). However, Carius did not discuss this point much in the article, and when asked about it, neither Memjet nor HP commented. (Neither company chose to comment for any part of this article when given the opportunity.)
However, the German court reversed the injunction about 10 weeks later, deciding that, in fact, HP hadn’t violated Memjet’s patents. HP is back to selling PageWide in Germany at full speed.
Can it Happen in the U.S.?
Why did the German court issue an injunction so quickly, and the American court did not?
“The standards for getting a preliminary injunction in the U.S. are pretty high,” says Joseph Kuo, partner in the Intellectual Property Law Group of law firm Arnstein & Lehr’s Chicago office. “You need to prove irreparable harm and that the injunction would serve the public interest, and that there is a substantial likelihood of success on the merits of the case.”
Steven Mitby, a partner in the Houston, Texas law firm Ahmad, Zavitsanos, Anaipakos, Alavi & Mensing P.C., notes that the German patent enforcement process differs greatly from that in the United States.
“Germany has a very rapid procedure for enforcing patents,” Mitby says. “In Germany there only has to be prima facie evidence to enter an injunction; in the U.S. it has to be broader. Preliminary injunctions in the U.S. are very rare. And if the plaintiff gets an injunction but then loses at trial, they could be liable for damages, and they could be significant.”
So presumably a preliminary injunction is not going to happen in the United States, especially at this relatively late point in the process. But what can happen? Assuming that HP does not really want to buy Memjet, the remaining options are a settlement or a trial.
Will They Settle?
Patent infringement lawsuits frequently conclude when the two parties settle, so it’s not inconceivable that this case ends that way. Carius noted in his November article that Memjet’s action in Germany caught HP off guard because, according to unnamed “insiders,” the two companies had already worked out a settlement.
The court documents related to the case hint at settlement discussions that did not bear fruit. They show that an “early neutral evaluation conference” was held November 24 and the “case did not settle.” This type of conference is a form of alternative dispute resolution at which a knowledgeable, experienced outsider evaluates the merits of each party’s case, with the possibility that after the evaluation, one side will decide it is in its best interest to settle. Since the two sides did not settle, presumably both feel their cases are strong enough to proceed to trial.
Moving Towards Trial
The first scheduled court appearance for the parties in this case is an event called a “Markman hearing” or a “claim construction hearing,” scheduled for June 9. At this hearing, the two sides will discuss the meanings of the narrative in the numbered paragraphs at the end of the patents in question.
“The paragraphs describe the scope of the invention, kind of like the property description in a deed,” Kuo explains. “Because you’re dealing with words in English, there are always disputes about what they mean….So both sides argue about what certain terms in those claims should mean, and the court issues its ruling on what it believes the meaning of those terms are.”
The Markman hearing can have a great bearing on the outcome of the case, because the court’s determination of the meaning of the narrative portion of the patent obviously plays a big role in its ultimate decision about whether the patent was infringed upon.
“Markman hearings in many cases are case determinative,” Kuo says. “The cases just end after that. The plaintiff might say the claims mean X, and under that meaning you infringe. And the defendant says no they mean Y, and that means we didn’t infringe. And if the court says they mean X, the other side says, ‘Now I’m screwed,’ so they settle. Or vice versa. But the courts don’t have to decide either way – they can split the baby or determine their own meaning.”
So the Markman hearing could end the case, or at least substantially affect the claims being made. But the judge is not under a deadline to make a ruling – it usually takes about a month, Mitby says, but it could go much longer, especially if the judge has to really work to understand the patents in question.
If that ruling is delivered and does not compel Memjet and HP to settle, the case will be one big step closer to trial. At that point “discovery” occurs, which means each side gathers evidence from the other side via depositions, documents, etc. Motions for a summary judgment might be filed at that point, which may also abruptly end the case.
Assuming all that happens and the case is still alive, it will eventually come to trial. But there may be long wait before that can happen, depending on how busy the court is. Mitby says the federal court in San Diego is considered one of the faster federal dockets, but the trial still could be months or a year after the Markman ruling.
At trial, the jury will be asked to decide whether infringement occurred. Because HP’s counterclaims against Memjet deal with the same basic issue as Memjet’s original claims against HP, it’s probable that they all will be considered at the same trial.
Once the Jury Rules
If the jury finds that no patent infringement occurred, the trial is over. If it finds infringement did occur, the first thing the jury will consider is financial damages. This could take the form of royalties; or if “willful infringement” is found, more money could be at stake, including attorney’s fees.
However, of particular interest to HP and Memjet dealers, injunctive relief – meaning the judge tells one of the companies to stop using the technology – is not automatic. Both Kuo and Mitby say that in the past, injunctive relief was almost always granted when a party successfully won a patent case. But today the rules have changed, and irreparable harm needs to be found (that means something that can’t be compensated with money). That somewhat reduces the likelihood of a permanent injunction.
Bottom Line: Technology Probably Survives
So the bottom line for those interested in one-pass, large-format inkjet printing is that both PageWide and Memjet are likely to be around for a long time. The case will take many months or years to be completed – if it doesn’t settle beforehand – and even if one side or the other successfully proves patent infringement, it’s not automatic that the judge will rule that the other company needs to stop using the technology.