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A jury in San Jose Thursday found Hewlett-Packard Co liable for $6.4m in damages to Colossal Graphics Inc, a Palo Alto-based company which manufactures ink and bulk ink systems for large format printers. The jury in the two-year old case ruled against HP for breach of contract, breach of good faith and fair dealing, and concealment. The dispute stems from a 1996 cross-licensing and sales agreement between the two companies that supported the sale of Colossal’s bulk ink system, which uses refillable bottles in connection with HP’s original equipment cartridges. Colossal says it signed a deal which allowed it to sell HP ink with its system but, within months of the agreement, HP announced its own wide format color inkjets with a built-in ink replenishment system, which it then sold in competition with Colossal. Ron Jones, Colossal’s chief executive and a former HP employee, is the only person left at the company, which had 20 staff at its peak. He has essentially been fighting a one-man crusade against the computer giant since the original agreement went sour. He expressed relief that this nightmare is ending and said he had a great deal together, if only HP would have given it a chance. The complaint against HP alleged that its agreement with Colossal was actually intended to serve only as a bridge until it could design and manufacture a product of its own which had a larger ink capacity and would require only HP ink, thus preventing Colossal from competing in the market. It remains to be seen whether HP will appeal the decision.

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CBR Staff Writer

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