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HP Notifies Cartridge World of Infringing Ink, Settles With Rhinotek

October 21, 2005

HP today notified Cartridge World North America that it has discovered infringements of an HP ink patent in inks sold by multiple Cartridge World franchisees.

The infringements were discovered as part of ongoing worldwide testing and enforcement efforts within HP's Imaging and Printing Group in order to protect its intellectual property rights.

"We have received a letter (from HP) and are investigating it," said Burt Yarkin, CEO of Cartridge World North America. "We have several ink suppliers from around the world and are awaiting more details at this time."

In March 2005, the same initiative also uncovered ink patent infringements in certain InkCycle cartridges sold under the Staples brand. HP and InkCycle quickly resolved the matter after InkCycle changed its ink formulations.

"HP spends millions of dollars annually in R&D to create innovations that benefit our customers, and we are rigorous in our protection of this investment," said Pradeep Jotwani, senior vice president of supplies, Imaging and Printing Group, HP. "HP hopes that Cartridge World North America will assist its franchisees in quickly complying with the law."

In a separate matter, HP and Rhinotek Computer Products have reached a settlement in a lawsuit HP filed in March 2005 for false advertising and unfair competition. Rhinotek acquires used HP ink cartridges and refills them with generic ink prior to resale. HP's suit alleged that Rhinotek's packaging failed to adequately inform consumers that these "compatible" products are used, not new.

Research conducted on HP's behalf confirmed that more than half of consumers surveyed mistook Rhinotek refilled products for new. Rhinotek has denied any wrongdoing, but has agreed, among other things, to modify its packaging to prominently disclose to consumers that these cartridges are used, refilled or recycled. HP believes the disclosure and other agreed changes will benefit consumers who have a right to know when they are buying used products.

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