Media Sciences International, an independent manufacturer of office color printer supplies, reported that Xerox Corporation filed a patent infringement lawsuit in the Southern District of New York, alleging that Media Sciences' solid inks designed for use in the Xerox Phaser 8500 and 8550 printers infringe four Xerox-held patents. The four patents referenced in the suit are related to the shape of the ink sticks.
Media Sciences believes its inks do not infringe any valid U.S. patents. The Company has a strict policy of respecting the intellectual property of others. The Company intends to vigorously defend these allegations of infringement. All Media Sciences' products reflect this dedication to intellectual property sensitivity as part of the company's Science of Color commitment to deliver affordable, high quality, non-infringing, warranty-protected products to its customers.
Further, Media Sciences considers Xerox's conduct a violation of a 2001 Settlement Agreement between the two companies. The agreement settled litigation between the parties, which Media Sciences initiated in 1999. The company is evaluating all of its legal options, including possible counterclaims.
The company has previously stated that, as a result of new color toner products and current sales trends of existing products, it expects the growth of color toner cartridge sales to continue to outpace that of solid ink sales in fiscal 2006, and advises the same for fiscal 2007. Eight of the ten new product lines released by the company in fiscal year 2006 were in the color toner category. The Media Sciences products related to the suit were introduced in December 2005 and represent less than 10 percent of the company's fiscal 2006 revenue.
"Media Sciences has competed with Xerox in this market for nearly a decade, and we are disappointed that Xerox has moved this competition from the marketplace into the courtroom," said Michael W. Levin, President and CEO of Media Sciences. "We are also surprised that Xerox has not honored its commitments embodied in the 2001 Settlement Agreement."
Levin continued, "Media Sciences is prepared to respond while also continuing our aggressive plans for continued growth. Our longstanding commitment to delivering quality, value, and a choice to color printer users remains firm. Our customers and end users can continue to expect from Media Sciences a complete portfolio of newly manufactured, warranty-protected, color printer supplies, including our products for use in the Xerox Phaser 8500 and 8550 printers, all of which deliver a high-quality, lower cost alternative to the printer manufacturer's brand."
The suit seeks unspecified damages, injunctive relief, and fees. The outcome of this litigation may have a material adverse effect on the company.
