QTR-Quadtone RIP

(Cross post from B&W forum)

(Legal thoughts - slightly OT)

The law in this matter states, in relevant part:

"Section 19 U.S.C. 1337. Unfair practices in import trade

.

(d) Exclusion of articles from entry 

(1) If the Commission determines. that there is a violation of this section,
it shall direct that the articles concerned, imported by any person
violating the provision of this section, be excluded from entry into the
United States, 

* unless, * [emphasis added]

after considering the effect of such exclusion upon the public health and
welfare, competitive conditions in the United States economy, the production
of like or directly competitive articles in the United States, and United
States consumers, it finds that such articles should not be excluded from
entry. ."

Writing letters that alert the politicians to a large constituency that
thinks this action will harm competition might be effective. The letters
should key into this section and the fact that competition in ink resale
market will be adversely affected by an exclusion order.

The letters should vary their wording so that they are not identified as a
mass mailing.

Letters to agencies get more attention if they are via a congressional
(House or Senate) representative. I'm not sure if anything can get the
attention of this White House.

The issues are very complex. Don't challenge the law or the patents. Use
them to your effect.

The *NET* competitive effect is the issue. "Competition," not the survival
of a competitor is the issue. Epson's competition with HP and Canon is
included.

Prohibitions against "tying" agreements, in that past (IBM punch card case),
would have knocked this down, but "modern" (heavily influenced by Chicago
School economics) antitrust does not trust "per se" theories and looks at a
"bigger" ("rule of reason") picture of competition. In theory this is
great, but in practice, the issues become so complex that the side with the
most money to hire the best lawyers (and lobbyists, etc.) often has a huge
advantage. 

Healthy horizontal competition among HP, Canon and Epson is probably a major
part of the big picture the policy makers are hearing about, and it's very
intense. Did you notice Kodak is explicitly competing on ink price?

"Below cost" sales prohibitions might have in the past stopped the
loss-leader character of competition that has developed. But that approach
is also discredited. 

We can't really expect to be able to free ride on below cost sales of Epson
printers. 

One pro-competitive argument that is being increasingly getting attention is
that innovation is a factor to be considered.

Even if Epson succeeds in keeping out most carts, I think the CIS/CFS
business will survive, and large format cartridge refilling will probably
remain viable. Third party ink sales will continue, but maybe not as well
in some markets as today. 

I wonder if software can even totally circumvent the chips and carts.

It's not over for users and innovative businesses.

Paul

www.PaulRoark.com

(& Former FTC antitrust enforcer)