Posts tagged: Patents

Lexmark Finds Buyer for Inkjet Patents

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 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. ( 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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The United States Postal Service Merry-Go-Round

Jim Hamilton
 Nov 19, 2012

I wish I were drawing this instead of writing a blog because it would make a perfect cartoon or infographic. You saw the latest news from the United States Postal Service (USPS), right? They posted a $15.9 billion loss for their 2012 fiscal year. Sound familiar? They posted a $5.1 billion loss in 2011 and a $8.5 billion loss in 2010.

Paragon Carousel, Hull, Massachusetts

The image that it brings to mind is a merry-go-round because the same cycle happens over, and over, and over again. Here’s how it goes:

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Canon Continues Legal Strategy for Drum Patent Protection

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 Feb 2, 2012
On January 23, 2012, Canon Inc. of Japan, Canon U.S.A., Inc. of Lake Success, NY, and Canon Virginia, Inc., of Newport News, VA filed another complaint with the ITC to begin an investigation into two patents. At the same time, Canon filed civil action against the respondents in the U.S. District Court for the Southern District of New York for the same patents. The two photoconductor patents are the same two patents that Canon had previously alleged patent infringement in 2010 for an ITC complaint (337-TA-731). This investigation was terminated in May 2011 due to the issue of a consent order prohibiting all 20 respondents including Ninestar from importing into the U.S. The patents are 5,903,803 and 6,128,454. Read more »

The Numbers behind Kodak’s Chapter 11 Bankruptcy Filing

Ed Lee
 Jan 19, 2012

On January 19, Kodak announced its much-anticipated Chapter 11 bankruptcy protection filing. The filing only affects Kodak’s U.S. Operations and its U.S.-based subsidiaries. Non-U.S. subsidiaries are not included and for them it is business as usual. Under Chapter 11, Kodak will continue to operate while seeking to reorganize its finances and the company is hoping to complete its restructuring in 2013. Many companies emerge successfully from Chapter 11 and we hope that Kodak is one of them.

This report looks at some of the numbers that we found in the court documents that we consider noteworthy.

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Korean Trade Commission Acquits Companies in Canon Supply Patent Cases

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 Nov 15, 2011

Two news services reported that South Korea’s state trade commission acquitted local laser printer parts companies of violating patent rights claimed by Canon Inc. regarding gears for photoconductor drums used in toner cartridges. The decision was reached after a review of claims made by all companies involved, as well as onsite inspections and technical evaluations by independent experts, according to the Korea Trade Commission (KTC). Canon had hoped that the KTC would stop the companies from manufacturing and exporting the drums which Canon considered to infringe for aftermarket use. Read more »

ITC Issues Another General Exclusion Order for Certain Inkjet Cartridges

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 Nov 11, 2011

In October, the International Trade Commission (ITC) issued a notice of final determination finding a violation of Section 337, issuing a general exclusion order (GEO), and terminating the investigation in Certain Inkjet Cartridges with Printheads and Components Thereof (Inv. No. 337-TA-723). With this general exclusion, three major vendors, HP, Epson, and Lexmark, now have general exclusion orders to help curb primarily new build products entering the United States from any source that affect certain claims of their supplies patents. The table below details all of these complaints with patents and products affected. Read more »

OEMs Continue to Take a Stand against Patent Infringements

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 Dec 16, 2010

Yesterday Seiko Epson announced it had agreed to settle patent infringement lawsuits with Taiwanese ink cartridge manufacturers ULIX and U-Color. The agreement, which was finalized on December 8, was made after the Taiwanese companies accepted Epson’s claims of settlement fees relating to ink cartridge intellectual property rights. Read the full press release here. Read more »

Canon Continues Legal Attack to Protect Supplies Around the World

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 Jul 15, 2010

The past few months have been pretty busy for Canon as they seek to protect their supplies in a big way. In May 2010, Canon filed several complaints with the Korean Trade Commission regarding its photosensitive drums used in printing equipment. Separately, at the end of June, Canon filed a complaint with the USITC (United States International Trade Commission) and a concurrent, separate lawsuit in district court regarding two patents covering the printer’s drive motor connection with the OPC drum in the toner cartridge. (See separate blog, Canon Sues Ninestar and Others Over Toner Patents,” from June 30, 2010 ) For some time, many industry watchers were wondering if there was going to be any action regarding the increased activity in new build, compatible toner cartridges especially for HP/Canon laser printers. While there has been significant activity in inkjet, it has been very quiet on the toner side. Read more »

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