Fighting phony toner cartridges

Sales of counterfeit goods make up between 5 and 7 percent of the world economy, according to the International AntiCounterfeiting Coalition (IACC). Piracy and counterfeiting cost the U.S. economy billions of dollars annually, have led to the loss of hundreds of thousands of jobs and needlessly expose consumers to dangerous and defective products, adds the Coalition Against Counterfeiting and Piracy (CACP).

When it comes to counterfeit inkjet and toner cartridges, the Imaging Supplies Coalition (ISC) is fighting back. The nonprofit organization has been formed to attack counterfeiting in the imaging supplies industry and is dedicated to educating, empowering and protecting stakeholders in the battle to eliminate counterfeit and fraud. The coalition is comprised of original equipment manufacturers (OEMs) of consumable imaging supplies and equipment.

Coalition members include Brother International Corp., Canon U.S.A. Inc, Epson America Inc., HP, Lexmark International Inc., Oki Data Corp., Samsung Electronics America Inc., Toshiba America Business Solutions Inc. and Xerox Corp. Founded in 1994, the ISC seeks to protect customers from misrepresented products and services and to protect the intellectual property (IP) and related assets of the ISC member companies worldwide.

The ISC estimates that the imaging supplies industry’s worldwide loss to counterfeiting is approximately 4 to 5 percent of total revenue, or between $3.5 and $4.0 billion. In the United States, it has been estimated that 3.5 percent of all inkjet cartridges sold are counterfeit. In some areas of the world, the estimate is up to 50 percent.

HP, one of the ISC member companies, reports on its website that between 2005 and 2008 it conducted 4,620 investigations in 55 countries, resulting in 3,528 enforcement actions by law enforcement officials in which more than $795 million of counterfeit supplies products have been seized. A second ISC member company states that legal actions are currently pending in at least six states.

According to the ISC, counterfeit goods introduce a level of price competition that is unfair and unsustainable. If a legitimate reseller inadvertently sells counterfeit goods that have been introduced into the supply chain through the parallel or gray market, there is also greater risk of customer dissatisfaction and loss. There can be significant financial and legal risks, too.

A counterfeit cartridge is a third-party product misrepresented as an original OEM cartridge. Cartridge counterfeiting is not the same as refilling or remanufacturing. Counterfeit print cartridges are meant to mislead the consumer into believing that they are genuine OEM products. In contrast, legitimate refilled or remanufactured products include packaging to state that they are “refilled,” “remanufactured” or “compatible” products to avoid confusion.

Another area of concern is the explosive growth of clone/compatible cartridges. When these products are packaged as a compatible under a non-OEM brand, they are not counterfeit, and any possible IP violations deal with patents and/or trade dress issues. Several OEMs have filed legal actions against companies they allege are violating their patents.

ISC asks customers to help eliminate counterfeiting and fraud in the imaging supplies industry by having a zero tolerance for counterfeit supplies. The organization recommends the following steps:

• Know suppliers and understand their business practices and policies.
• Avoid price deals that are “too good to be true,” which may indicate counterfeits.
• “When in doubt, check it out” (WIDCIO) by returning a suspicious product carrying a brand of an ISC member company to ISC for authentication.

View details of the WIDCIO program on the ISC website at isc-inc.org.