"We're not saying we can end piracy, but our system is designed to recover from failure," said Kit Rodgers, CRI's vice president of business development.
Not all ink-cartridge remanufacturing is illegal--much of it is, in fact, legitimate--but pirated ink-cartridge technology cuts substantially into original manufacturers' profits.
There are three main ways the $60 billion-a-year worldwide printing industry loses money:
? Used cartridges get refilled and sold as "new"-- instead of as remanufactured.
? Cartridges get illegally replicated through reverse engineering.
? Printers get hacked or physically altered to use any type of ink.
Although solid figures on counterfeiting are impossible to determine, it's estimated to cost the industry at least $3 billion a year, according to the Image Supplies Coalition, a lobbying group formed to fight piracy and cloning in the ink and toner industry.
CRI Cryptography is a method of encrypting data so that only a specific, private key can unlock, or decrypt, the information. It's used in everything from credit cards to digital media. CRI plans to create a secure chip that will allow only certain ink cartridges to communicate with certain printers.
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"There's absolutely nothing wrong with that; it's an accepted part of a competitive industry," according to Tuan Tran, vice president of marketing and sales for HP's supplies business. "That is a legal competition in our minds."
About 11 percent of the money spent on inkjet cartridges and 25 percent of the money paid for monochrome laserjet cartridges goes to companies that resell cartridges they did not manufacture, according to John Shane, director of marketing at InfoTrends.
"The vast majority of that is perfectly legal. Most people believe (the U.S. market for illegal cartridges is) a lot smaller than the illegal market, say, in China," Shane said.
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