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HP drops case against Datel Holdings

February 12, 2015

HP’s 45 cartridge, which uses the chips affected in the case.

HP’s 45 cartridge, which uses the chips affected in the case.

OEM files voluntary dismissal of case against the company, which had accused it of cracking the OEM’s inkjet cartridge chip security and sharing it with clone manufacturers.

HP has dropped its lawsuit against Datel Holdings, whose subsidiaries design and develop microchips for use in printer cartridges; with a ‘Notice of Voluntary Dismissal Without Prejudice’ filed to the US District Court, California Northern District on 6 February 2015.

The OEM had begun the trade secrets case to sue Datel for $30 million (€26.5 million) in June for allegedly “misappropriating” its master key codes for printer cartridge chip security before sharing the codes with clone manufacturers; with the companies debating the case in court in September. Datel had sought to dismiss the claims against it, stating that HP’s lack of facts, standing, or evidence that it acquired the means to copy the chips were “improper” as reverse engineering is not considered an “improper means” of acquiring information.

In addition, Datel had argued that HP only alleged that it “cracked” the security features on the chips, which it added “constitutes classic reverse engineering, which is entirely permissible under California’s trade secrets statute”. In terms of the case lacking standing, Datel added that HP would have to “own the trade secrets”, and in this situation, ST Micro, a company HP had worked with that produces development kits for customers to develop software and generate firmware for chips, does; meaning HP did not have a position to “assert misappropriation of trade secrets”.

A further argument made by Datel had been that there were no factual allegations to support the use of a development kit to access the codes, and so any ST Micro customer would have been at risk of hacking if Datel had been able to do what HP was accusing it of.

A voluntary dismissal without prejudice is defined as termination of a lawsuit by voluntary request of the plaintiff, with the plaintiff not being barred from further litigating the same subject matter.

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