Posts tagged: Copyright

Lexmark Finds Buyer for Inkjet Patents

Other Posts
 Apr 16, 2013

Last August, Lexmark announced that it would be exiting the inkjet business and was looking for a buyer. The printer maker planned to close its Philippines factory and cut 1,700 jobs worldwide, or 13% of its staff, to focus on high-end business printers, document software and services.  At the time, many wondered who would want to buy their inkjet segment given market conditions and forecast predictions. As the chart shows below, inkjet is declining and Lexmark’s portion has grown considerably smaller. It turns out the company, Funai that has been manufacturing inkjet printers for Lexmark since 1997 was interested and will acquire the patents and the Philippine ink manufacturing facility. The deal announced on April 2, 2013 includes Funai Electric Company Ltd. (www.funaiworld.com) acquiring more than 1,500 of the OEM’s inkjet patents for $100 million and is expected to close during the first half of 2013. With US$26 billion/2,461 (JPY 100M) in annual sales, Funai has operations all over the world including North America, Europe, Japan, and Asia as well as other markets. The U.S. is their principal market with over half of the company’s sales.

Chart: 2012 U.S and Western Europe Serial Inkjet Populations by OEM
 

Three major business segments are the main focus for Funai: Audio Visual, Information Equipment (printers), and Other. The company’s Information Equipment segment represents about 12% of their sales. Funai has relationships with mass merchandisers and OEMs including Lexmark. OEM business accounts for about a third of Funai’s business. Funai depends on Chinese production for its products because it makes them more cost competitive which is important for their mass merchandiser customers. Over 80% of their products are made through consignment production in China. Funai had plans to commercialize printers developed in-house and last year announced that it had launched a laser beam printer business. This acquisition of inkjet technology speeds this process along for Funai which now has the capabilities to develop, manufacture, and sell inkjet hardware as well as inkjet supplies. In addition, Funai will become the manufacturer of Lexmark’s aftermarket inkjet supplies.

Funai Electric is a company that is known for a unique business model in that it MILKS markets to the end. The company has a history of investing in technology when it’s already proven and then building economies of scale in the production process. Beginning with sewing machines, the company moved on to transistor radios, then VHS. Only recently did they pick up LCD and this year they took over the entertainment section of Philips for their branded audio and accessories. Some wonder what this says about the inkjet market today? It’s certainly past its heyday but will we see Funai entering as a new inkjet brand — if we look at their previous pattern, then yes.

Market Impact
Our initial thought about this transaction is that it is good for Lexmark to have found a buyer for their inkjet business given what we know about inkjet. It will be interesting to see what Funai does with it. Since the serial inkjet market for consumers is in decline but business inkjet is growing, Funai may face challenges with that since what they know is centered around low-cost consumer electronics and relationships with consumer retailers. Funai has made it clear that they wanted to do more in this area and now they have more control over this process since they own the patents and facility. In the past few fiscal cycles, Funai did state in financial documents that orders for printers had been dropping so this deal may help them breathe new life into this area but may also present some risks for them in this very competitive and established market. Funai is not a known brand in the market and the question is whether they will be able to sell its inkjet printers to a wide range of customers under their own brand or even uncover new niches for inkjet? Our guess is that products developed based on this newly acquired intellectual property which may include new printers with new engines will be well suited for emerging markets versus established markets such as the U.S. and Europe even though the U.S. is a dominant market for Funai.

No Change on First Sale for Patented Cartridges

John Shane
 Apr 4, 2013

Last month, the U.S. Supreme Court, in Kirtsaeng vs. Wiley, ruled that under US law there is international exhaustion regarding copyright under the first sale doctrine. In terms of copyright, products legally sold outside the US exhaust the copyright in the US. However, the large majority of issues related to the cartridge remanufacturing industry are patent related and not copyright. This decision did not impact patents. However, it is the first step that would need to happen in terms of changes in case law that would impact the cartridge remanufacturing industry based on cases known to be coming down the line. From the point of view of patent exhaustion for cartridges, and whether remanufacturers can legally sell remanufactured cartridges in the US when they are made from cartridges that were  first sold outside the US, or whether they need to track the first sale location at all, Wiley was the first case that remanufacturers needed to answer that question.

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Dandelion Distribution and Other Observations from O’Reilly Tools of Change

Jim Hamilton
 Mar 11, 2013

The idea behind dandelion distribution is simple. Imagine thousands of dandelion seeds being spread by the wind. Of these, only a few may ever grow into dandelions, but that’s enough. As it relates to e-books, dandelion distribution happens when reproduction and distribution are so cheap as to be virtually free. This idea is encapsulated in the book Spreadable Media by Henry Jenkins, Sam Ford, and Joshua Green, and it was also discussed at length during one of the keynote sessions at the O’Reilly Tools of Change conference (February 12-14 in New York City).

Panelist Cory Doctorow (more on him at Craphound.com) suggested that book publishers consider replacing their traditional “mammalian intuition” (i.e., the idea that each book is precious and must be protected by any means) with “dandelion intuition” (where it is acknowledged that any individual book has a small chance of success and therefore the strategy should be designed around spreading as many ‘seeds’ as possible). This concept goes against traditional publishing logic, but so did a lot of other ideas at the conference.

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Moving HP’s Print 2.0 Vision Forward

Other Posts
 Oct 26, 2009

We’ve discussed HP’s Print 2.0 vision on the InfoBlog in the past, and two recent announcements signify that the company continues to forge new partnerships that enable print in interesting ways. These announcements include a partnership between HP’s MagCloud service and online wiki community site Wikia, as well as HP’s partnership with University of Michigan on BookPrep, a platform for printing rare, out-of-print books.

MagCloud/Wikia Partnership

MagCloud is one of HP’s services we’ve talked about in the past that continues to evolve and gain wider exposure. The service provides a platform for virtually anyone to publish their own magazines to the Web, and gives users the option to have one or many copies printed and shipped to them. These magazines are printed on HP Indigo devices, although it’s not quite clear (at least to me) if HP is printing items in-house or funneling them to print service provider partners.

In any case, HP recently announced a partnership between MagCloud and Wikia, an online service available for people to create wikis on any topic, similar to how Ning can be used to create social networks on any topic. Wikia was founded by Jimmy Wales, creator of online encyclopedia Wikipedia, and currently has wiki databases on a wide variety of topics. Some of the largest Wikia communities include a wiki on music lyrics, a recipe wiki with over 40,000 entries, and a genealogy wiki called Familypedia. The MagCloud/Wikia partnership is largely in the form of technology, with the two groups collaborating on building a Magazine Creator tool within Wikia. The Magazine Creator allows users to collect articles within a Wikia community that they want to publish, design a cover based on templates or with uploaded images, and publish the magazine through MagCloud. MagCloud handles the formatting of wiki pages into print-appropriate layouts, and published works can be ordered through the MagCloud site. An appropriate and funny example used to demonstrate this technology comes from MuppetWiki, which created a 32-page magazine filled about Muppets character Grover and the different types of jobs he’s had. Read more »

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