Here is an interesting story spotted on Cnet.com (edited version below)

Hewlett-Packard has sued two companies that sell refilled ink cartridges,
but stopped short of trying to block the ink refill business altogether.

HP sued InkCycle alleging that the InkCycle ink violates three HP patents. And three days later, HP sued RhinoTek in U.S. District Court for the northern district of California, accusing RhinoTek of using packaging that implies its refilled HP printer cartridges are new.

These law suits are not a change in HP's policy, they still believe that customers have a right to refill legally purchased cartridges or buy refilled cartridges. "We still believe it's the customer's choice," said spokeswoman Monica Sarkar, adding that HP believes its own products are superior.

The Palo Alto, Calif., printer powerhouse requests that InkCycle stop (in HP's opinion) infringing the patents and pay damages and HP legal fees. Monday that a settlement in that suit is expected soon.

Brad Roderick, vice president of marketing for InkCycle, said "We've been in direct communication with HP and expect a very near-term full resolution," . He declined to comment on terms or whether InkCycle will continue to sell its products, but he said, "We're a company that has always been respectful of intellectual-property rights."

The ramifications of the InkCycle case could spread beyond the company if it's using ink that other refillers use as well.

In the Rhinotek case, HP asserts that the company's "packaging and promotional materials are calculated to give consumers the impression that defendants' cartridges are new." HP wants a requirement that Rhinotek use the words "used" and "refilled" prominently on its packaging of refilled HP ink cartridges. HP also wants all Rhinotek profits from the time of the alleged deceptive advertisements.

HP has been less aggressive in legal attacks against printer supply companies than one rival, Lexmark. HP lashed out against Lexmark's attempt to use the Digital Millennium Copyright Act, or DMCA, to stop ink refillers.

"We think it is stretching it," HP printing unit exec Pradeep Jotwani said in a 2003 interview. "The DMCA was put in place (to protect) things like movies, music and software applications."

"We consciously make sure that our cartridges are reusable and refillable," Jotwani said at the time. The company does put some limits on the practice, such as adding software that makes some of its cartridges unusable after a certain expiration date--either four-and-a-half years after its manufacture or two-and-a-half years after its installation.

In the case against InkCycle, HP claimed the company has violated three patents: Nos. 5,165,968; 5,428,383 and 5,488,402. The first concerns fast-drying ink that works well on plain paper, and the second two concern methods for preventing color from bleeding.

HP said in its suit against Rhinotek that it holds 9,000 patents related to imaging and printing, 4,000 of them for consumable supplies such as ink and cartridges.

Refilling ink cartridges is a big problem for all the manufacturers, cartridges account for 10 to 15 percent of all consumables. Now I know many readers complain about the high cost of inks and media, but this has to be put into perspective. HP, Epson, Canon and Lexmark offer printers at a competitive price, they make up their money on the consumables.