Seiko Epson Corporation

U.S. ITC Judge Recommends US$ 20.5 Million Penalty Against Ninestar, Which Sells Ink Cartridges under the "G&G" and "OA-100" Brands, for Violations of Orders to Cease and Desist from Continued Infringement of Epson Patents

– TOKYO, Japan, May 1, 2009 –

The Honorable Paul J. Luckern issued an Enforcement Initial Determination on April 17 that finds Ninestar, which sells ink cartridges under the "G&G" and "OA-100" brands, repeatedly imported into the United States and sold after importation cartridges that infringe certain patents owned by Epson in violation of the General Exclusion Order and certain Limited Exclusion Orders and Cease and Desist Orders issued on October 19, 2007 by the U.S. International Trade Commission ("ITC").

The decision recommended that the ITC impose a penalty of US$ 20,504,974.16 jointly and severally against Ninestar Technology Co. Ltd. of Zhuhai, China and its two affiliated US companies, Ninestar US and Town Sky. The judge also found four other companies violated the ITC's Orders and recommended penalties in the amount of US$ 9,700,000 against Mipo International Ltd. and Mipo America Ltd., as well as US$ 700,000 against Ribbon Tree USA Inc. doing business as Cana-Pacific Ribbons Inc. and Apex Distributing Inc. The penalty against Ninestar is the largest penalty that has ever been recommended by an ITC judge. Penalties have been assessed only infrequently in the reported history of the ITC. They are collected by and for the United States government.

Judge Luckern's ruling arises from enforcement proceedings that were instituted in 2008 by the ITC to determine whether the seven Chinese and U.S. companies continued to import into the United States and sell after importation infringing ink cartridges in violation of the ITC's General Exclusion Order, Limited Exclusion Orders and Cease and Desist Orders that were entered on October 19, 2007. These Orders were entered after the ITC completed an investigation in 2006-2007 and determined that patents belonging to Epson were valid, enforceable, and infringed by over one thousand accused products.

Judge Luckern conducted an enforcement trial in January 2009 that was defended by the Ninestar companies. The other four respondents defaulted. Based on the extensive evidence presented at the enforcement trial, the judge found that all of the enforcement respondents imported into the United States and/or sold after importation infringing cartridges repeatedly in violation of the ITC's General Exclusion Order, Limited Exclusion Orders and Cease and Desist Orders. The judge also rejected all of Ninestar's defenses.