Recycling Times Magazine English Edition-Issue 38 (NEW LOOK) by Recycling Times Media Corporation

EDITORIAL

Tony Lee After the U.S. Supreme Court ruled on the first sale doctrine in a copyright case (Kitsueng v. John Wiley & Sons), a lawyer in China wrote to us commenting that “We can look at it as guidance on how to interpret patent law in the absence of a precedent that is directly on point. Logically, we can’t see any reason why patent rights should stand differently if a copyright can now be exhausted by an initial sale abroad.” The attorney seemed quite positive about the implication the ruling would bring to the industry. However, another bit of news came later when the Supreme Court refused to hear the patent exhaustion case of Ninestar. He wrote back to us stating that his earlier comment seemed “no longer suitable.” When we contacted several industry experts and lawyers we found that most of them were still optimistic about the prospects of a resolution favorable to the reman industry. The decision could possibly bring a desired outcome for some reman companies, namely that: the first Publisher & Managing Director Tony Lee

Directors David Gibbons Sabrina Lo

Senior Consulting Editor Art Diamond

Editorial Team Doris Huang Doris.Huang@iRecyclingTimes.com Jane Yu, Lisa Liang，Violien Wu, Virginia Ruan, Wendy Lee

Graphic Designers Miracle Wei, Kevin Deng

Sales Team Kevin.Zhu Kevin.Zhu@irecyclingtimes.com Abby Wang,Victoria Zhao, Tobee Deng

Marketing Team Jessica Yin Jessica.Yin@iRecyclingTimes.com Tracy Zhang

Operations Team Charles Lee Charles.Lee@iRecyclingTimes.com Betty Lee, Candy Chen, Joy He

Regional Offices 6B Xinhai Commercial Building, 104 Yuanlin Road, Jida, Zhuhai 519000, China Tel: +86 (0)756 3220716 / 3919266 Fax: +86 (0)756 3220717 24 Ardley Ave Kellyville, NSW, Australia 530 West Ojai Ave., Suite 108 Ojai, CA 93023-2471, USA Email: info@iRecyclingTimes.com Website: www.iRecyclingTimes.com

Issue38|www.iRecyclingTimes.com

sale of a patented product, whether it is in a foreign country or within the United States, will extinguish all patent rights. If this is the case, some remanufacturers will be able to escape from the threat of an OEM infringement lawsuit (learn more about the first sale doctrine by turning to p29 and p42). The reman industry has existed for more than 3 decades. However, in recent years it has frequently faced threats from within and without. A favorable decision would spare our industry the effort and the expense of dealing with these outside threats. It would enable reman companies to focus on their R&D, production, marketing and sales programs. But how are we going to tackle the inside threats, especially the new-builds, clones and counterfeit cartridge problems? For many remanufacturers, clones have become the single biggest reason for losing both customers and profit margins. Most clone cartridges, typically with cheap prices, inferior construction and poor print quality, can’t be "remanned". In addition, they present a serious danger of patent infringement. Clones often end up in a landfill after a single use. Selling clones as “remanufactured” is deceptive as it leads customers to believe they are buying a “green” product and protecting the environment. In short, the poor reputation of clones, counterfeits and new builds has cast a shadow over the entire reman industry. Some companies, such as Static Control Components, are uniting with industry trade associations to fight against clone producers. Even OEMs are finding common ground with the reman community, especially in bringing counterfeiters to the attention of legal authorities. Let’s get behind our trade associations and give them the support they need.

CONTENTS

RECYCLING

TIMES No. 38 | 2013

05 | NEWS IN BRIEF U.S. Supreme Court Denies Ninestar Appeal

35 | OEM NEWS Epson Shifting to Upmarket Inkjet Printers

06 | WORLD NEWS Remanufacturers Watch Technical Demonstration

39 | REGIONAL NEWS 41 | DIGITAL PRINT NEWS

09 | LEGAL UPDATES Werit Wins in UK Supreme Court Replacement Part Ruling

46 | TECH ZONE Dell 2130/2135 Toner Cartridge 47 | MONEY FROM HOME Patents: The System Works

11 | JUST A MINUTE Moving Forward in Tough Timess

49 | ACTIONABLE INSIGHTS Industry Continues to Shed Jobs During First Quarter

11 | TRENDS Printer Sales Boom in Vietnam 13 | NEW PRODUCTS

With the closure of the annual World Expo trade show, many remanufacturers traveled to ITEX—which is also held in Las Vegas—to find business solutions and opportunities. (Photo taken by: David Gibbons)

19 | AFTERMARKET NEWS

52 | THE LISTS FEATURES

23 | ENVIRONMENT

14 | FRONT COVER STORY

51 | KEEPING UP A New World Record for HP

Selling Supplies through the Internet

Every year it becomes more apparent that the Internet is disrupting how traditional businesses, especially retailers,, conduct the business of selling products to their customers. ers. 29

45 | PEOPLE Empty Cartridge Collection Lennart Zernitz, Sales Director/COO of Van Klaveren CCC

Supreme Court Rules on First Sale Doctrine

Anyone who is sued for patent infringement, based upon n refurbished products first sold overseas, can and should ask the court for a declaratory judgment that there is no o infringement because of the John Wiley decision. 42

CISS—A Growth Opportunity for Rechargers ers

How can we use continuous ink supply systems to grow our business and profit? You’ll find some practical answerss here. Horst Edelmeier, OCP Ink Photo Credit: David Gibbons Recycling Times informs , educates, and nurtures the global printer consumables industry innovatively through an integrated broadcast, print, digital and social media strategy. As such, we honor and respect the intellectual property of all businesses and individuals. Consequently, we take a zero tolerance position to the manufacture, distribution and sale of patent infringing “cloned” and counterfeit printer cartridges and components. We will review all existing advertising contracts as we continue to strive to avoid promoting such in our advertisements, articles and editorial content. We invite our readers, viewers and browsers to help us take corrective measures to do so. All rights reserved. © May 2013 by Recycling Times Media Corporation. The contents are not be to copied or republished without official written consent. Editorial content may not represent the official positions of Recycling Times Media Corporation.

www.iRecyclingTimes.com|Issue38

NEWS IN BRIEF

Supreme Court Ruling Brings Good News to Remanufacturers

U.S. Supreme Court Denies Ninestar Appeal

Print Related Data Leaks Affect 63% of Businesses

The US Supreme Court has ruled copyrighted products that have been sold, lose all copyright rights after that first sale— no matter where in the world they were sold. This first sale doctrine has been used previously to prohibit the resale of legal products first sold outside of the USA, to be resold again inside the USA. At least one patent attorney is saying that by implication, it is the same issue involving patented products. Ed O’Connor of the Eclipse Group says after the first sale of a patented product, the same rule should apply, meaning that all patents are also exhausted (see more from Ed O’Connor's "U.S. Supreme Court Rules on First Sale Doctrine" on p29).

The U.S. Supreme Court denied Ninestar's appeal that the high court review the decision of a Federal Circuit upholding the $11.1 million fine levied by the International Trade Commission. Ninestar was trying to exhaust every legal option in contesting the fine order by the ITC for violating the commission’s exclusion orders. In its petition for a writ of certiorari, Ninestar urged the Supreme Court to review its case and settle the rules regarding international patent exhaustion to mean that “foreign sales authorized by U.S. patentees exhaust U.S. patent rights.” However, the Federal Circuit’s decision in the lawsuit between Ninestar and ITC will stand.

A white paper published by research and analyst company Quocirca points out printers are increasingly becoming a security hole for leaking sensitive company or client information. Many businesses leave themselves exposed to potential data breaches, both policy and device-related. The report reveals 63% of businesses surveyed experience one or more print-related data breaches, and only 22% of businesses have implemented secure printing plans. Further, 66% of financial services had at least one printrelated security breach, but only 16% had more than one. In contrast, the public sector, where 90% of organizations had at least one breach, 35% experienced more than one incident.

Read more: bit.ly/11aORgw ■

FG Introduces Samsung Toners Future Graphics introduced new toners for Samsung cartridges MLT-D103, MLT-D104, MLT-D109, and MLT-D205. These toners are said to offer excellent image density, minimum background levels and excellent fusing properties. Read more: bit.ly/14WD1dl ■ FG Item No.

Description

For Printers

SAMUMKI1000

1kg/bottle

ML-2955, ML-1865, SCX-4300, ML-3312

SAMUMKI10KG

10kg/pack

ML-2955, ML-1865, SCX-4300, ML-3312

SAMUMKIBULK

80kg/bucket

ML-2955, ML-186 5, SCX-4300, ML-3312

Ninestar announced the launch of its n cartridges for Brother HL-5450 new S Series printers. These are being introduced as Star Products in 2013. The printers are expected to enjoy a large sales volume and Ninestar has developed patent protected compatible cartridges to meet the great market demand. To help boost sales, Ninestar produces a lot of advantages and advanced gear resetting technology. Ninestar’s patented cartridges are now available on the official website of G&G Imaging. Read more: bit.ly/YH4nCP ■

UniNet Anounces New Components UniNet released its Absolute Color toner and components which can be used in the Samsung CLP-365, CLX-3305 color printer series and the Xerox Phaser 6121 multifunction printer (MFP). Also launched was the firm’s X Generation Black toner and components which can be used in Dell B1160 monochrome printers. UniNet provides a complete remanufacturing solution for cartridges used in these printers. Read more: bit.ly/Y7KnU0 ■

www.iRecyclingTimes.com|Issue38

FRON FR ON NT COVER C VE CO ER ST STORY TO OR RY 14 FRONT 14

Producing A Better Ink OCP Inkâ&#x20AC;&#x2122;s Horst Edelmeier says inks are the Future David Gibbons, Recycling Times Director

Issue38|www.iRecyclingTimes.com Iss sue38| e38|www.iRecyclingTime mes.co .com m

FRONT COVER STORY True leadership is scarce. Many volunteer, but few can really see beyond the horizon and show us the way forward. So if you are seeking someone to lead you through a thicket of issues in the aftermarket print consumables business, look no further than OCP Ink’s Managing Director, Horst-Gerh. Edelmeier. Not only is he tall with the bearing of a born leader, but just a few minutes with him will reveal he is a visionary who can predict where the print consumables industry is headed.

Today Edelmeier, together with his partner, Dr. Siegfried Koch, runs OCP Inks, a highly successful inkjet ink producer they jointly founded almost 20 years ago. Headquartered in Bochum, a large town in Germany’s Ruhr valley, OCP Inks continues to expand, through its many distributors worldwide. “Actually OCP Inks has two Managing Directors (Geschäftsführers),” says Edelmeier, adding “Both roles, business and technical, require leadership, enabling us to see beyond the present, if our company is going to thrive.” Ribbons to Refills Prior to OCP, Dr. Koch headed up the research, development and production department of GEHA, a Hanover-based company that was later acquired by Pelikan who eventually shut down the Hanover R&D and production departments moving them, and Dr. Koch, to Switzerland. This year, Edelmeier celebrates his 20th year as a business leader and entrepreneur. “I had the opportunity to get into typewriter ribbons back in 1993,” Edelmeier remembers. “For 28 years I had worked for a large German chemical company which produced and sold high-quality, high priced chemicals. Fortunately, I was given the chance to start my own business.” Edelmeier says his former typewriter ink business was an important event in his career. “Without it, OCP Inks would not, nor could not, exist, today,” he explained. “One of our primary ink suppliers was Pelikan. That’s how I first met, and had contact with Dr. Siegfried Koch. Then, in 1993, Pelikan decided to relocate its ink division from Switzerland to Scotland. He didn’t want to go and decided to leave Pelikan.” There had been little motivation for Edelmeier

to move into inks until he met Dr. Koch. “Siegfried told me typewriting would soon end and be replaced by inkjet. I believed him and we founded OCP together.” The business started in Hattingen, in the southern Ruhr valley. It was a time when many businesses were still using typewriters and dot matrix printers, although some had started using printers based upon toner technology. But other suppliers had a similar vision to provide aftermarket inkjet inks. “When we started we had many competitors,” he recalls, “but I think our greatest single achievement over the last 20 years is that we survived them all.” The passion for this business also gripped Edelmeier’s family. Even though it is not a family business, Edelmeier’s son and daughter work there, as does his wife, who is responsible for the company’s financial operations. “OCP is not me alone, nor is it Siegfried alone.” Edelmeier brings his marketing knowledge and expertise to the partnership, and the secret OCP ink formulations are all based on Dr. Koch’s knowledge and experience in chemical research.

The common ingredient with all inks is ultrapure water. But beyond that, the science of formulating a quality ink differs from supplier to supplier. Growing Global Edelmeier celebrated his 20th year moving OCP to new premises in Bochum with plans to open new ink fulfillment lines there. “The reason for the move,” he notes, “can be described in a single word: space.” The business had grown to the point it occupied 3 different floors in 4 different buildings. “Now we are all together in one building and on one floor. It’s wonderful! The new Bochum premises are 130% larger, providing more space for administration as well as the new ink lines. In total, 52 staff are now employed in administration, warehousing, and the filling of containers and cartridges.” Inkjet inks are researched, developed and produced at OCP facilities in Lage, Lippe, a country town in mid-western Germany. Here, 18 employees continue to refine and produce inks for both the older, conventional inkjet printers and the newer inkjet models. Despite being based in Europe, where Germany is the largest consumer of printing consumables, Edelmeier says their number one market is North America. “We have distributors www.iRecyclingTimes.com|Issue38

16 FRONT COVER STORY

Issue38|www.iRecyclingTimes.com

FRONT COVER STORY

and support centers on every continent. Sales are conducted either through OCP’s own branches or with 28 distribution partners and their sales networks around the world. “Each of our partners brings expertise to the global OCP network. Our partner in Russia, for example, is an expert in continuous ink supply systems (CISS). According to Edelmeier, the key to OCP’s success is the quality of its ink. Inks of the Finest Quality is the company’s motto, mission statement and creed by which all staff must, and do, operate. Edelmeier says the common ingredient with all inks is ultrapure water. But beyond that, the science of formulating a quality ink differs from supplier to supplier. “The keys to providing good ink are stability, composition and permanence. These three are the foundations for OCP´s success and are ingrained in everything we do. A good salesman can sell a bad ink, but he will only get one sale.” He says OCP inks are not only of the highest quality, but they are consistently of the highest quality. “We get much less than a 1% return rate which is as good as you can get, even by OEM standards,” he adds proudly. When you visit an OCP Ink booth at a trade show you are not overwhelmed by product. Rather OCP staff prefers to build relationships with their clients, which is the way sales are made during the year. “We don’t have to ‘sell’ our ink; we just have to provide good service. We help our customers solve problems, and provide solutions. The sales naturally follow.” It is no surprise 40 of the top 50 global aftermarket cartridge refillers use OCP ink. Edelemeier smiles: “They would not want us to name them, because they are focused on their own brands. But it is encouraging to know that our inks really do work well.”

Edelmeier believed Dr. Siegfried Koch (pictured) who predicted back in 1993 typewriting would be replaced by inkjet.

OCP plans to open additional ink fulfillment lines at its new premises in Bochum, Germany

In 1993, Edelmeier had the opportunity to get into his own business—inking typewriter ribbons

OCP customers come in all shapes and sizes—from small kiosks in shopping malls dealing directly with consumers, to large companies relying on sales channels through stationery stores. Edelmeier says the way orders are fulfilled also varies. “A company that refills 100,000 cartridges of one type per month will buy ink in our 600 Kg containers; but the refill shop around the corner may only need 0.25 Kg of a special ink. We sell our inks in any packing size the customer wants.” “We are also fussy about who buys our ink. “We will only work with those companies who are respectful of the

I believe 100% that at the end of the battle— whenever that will be—inkjet will win out against toner. intellectual property of the original equipment manufacturers.” Patents are only on the plastic part of the cartridge, not the ink, because the main ingredient of the ink is water. So OPC’s focus, according to Edelmeier, is to provide an ink that can be used to refill an empty cartridge. “It must work even though the cartridge and the print head have been used before—often many times before.“

Continuous ink supply systems, or CISS, have become very popular with consumers. Aftermarket companies were the first to go to market with these bulk ink tanks, with some patented, aftermarket products being challenged by the OEMs. Edlemeier says “What is important for us, is that cheaper, poor quality inks are not used. Bad inks damage the reputation of the aftermarket industry.” The Clock is Ticking Some analysts say the clock is ticking for inkjet ink technology which is finding it difficult to gain traction in the lucrative office environment where laser technology remains dominant. Still others point to the demise of inkjet printing in the home. Yet others ask what will be the impact of the newer, fast-emerging inkjet printers, with a lower cost per page? Will they change the balance of ink vs. toner used in the office environment? Horst Edelmeier doesn’t blink an eye. He stares straight through me: “I believe 100% that at the end of the battle— whenever that will be—inkjet will win out against toner. The upcoming discussions about fine dust concentrations in offices, in combination with the newer, faster inkjet printers, will be the reason for that. When it happens, OCP will be there to meet the demand with the highest quality products!” ■ www.iRecyclingTimes.com|Issue38

AFTERMARKET NEWS Katun Color Toners Cover 25 Billion Pages Katun Corporation say 25 billion color pages have been produced by Katun and Media Sciences brand color toners. This significant milestone was announced by Katun in a prelude to its customer appreciation campaign. It was launched in a full page ad in the Wall Street Journal. In the ad, Katun President and CEO Todd Mavis thanked customers, suppliers and employees for their vital contributions. Katun is expecting two other milestones in 2013. One is $3 billion in customer savings and the other is one trillion pages produced by Katun color and monochrome printers and consumables. Read more: bit.ly/Yj6NpH ■

MSE Expands Operations on U.S. East Coast MSE, who claim to be the largest U.S. based remanufacturer, have purchased a new facility in Pennsylvania to expand its sales and distribution capabilities on the U.S. East Coast. The 25,000-square foot facility is now open and in full operation. It doubles the space of the former building and incorporates a custom picking system and excellent distribution techniques to optimize delivery speed. MSE says this larger facility enables MSE to provide better service for customers, because

it has the capacity of stocking 100,000 cartridges, 70,000 more than that of the older building. In addition, this purchase establishes a firm commitment to grow its East Coast business. Read more: bit.ly/XXTpWX ■

Static Control Supports Fight against Clones Static Control Components, Inc. has announced it will support the Italian association Produttori Associati Cartucce Toner (PACTO) in its fight against cloned cartridge manufacturers. Associates of PACTO met at Static Control headquarters to discuss their goals. The discussion focused mainly on raising government awareness of the industry and its fight against new build/

clone manufacturers. The group also seeks to promote awareness among the general public of the positive and green contributions from the remanufacturing industry. SCC will also work with other industry associations to fight against cloned cartridge manufacturers, such as ETIRA, I-ITC, UCKRA, ABRECI, CAMOCA. Read more: bit.ly/10JvWZy ■

www.iRecyclingTimes.com|Issue38

20 AFTERMARKET NEWS

Issue38|www.iRecyclingTimes.com

ITEX NEWS Eight Times More Traffic Roger Asay told attendees at the ITEX show in Las Vegas, the magazine he started 26 years ago will not be printed in hard copy any more, because 8 times as many people read the digital version instead. Locator Magazine brought together aftermarket buyers and sellers of copiers, printers, supplies and related products. Now, browsers can register for free to access information at OMBE.com which stands for Office Machines and Business Equipment.

Toner People to Meet After All

Watch what Roger Asay says at bit.ly/11e22eK ■

Refilling: Part of the Business Strategy Memjet has used ITEX to show how dealers can be part of the lucrative consumables sales channel, by refilling their customers’ printers ink tanks. Memjet’s Kim Beswick took only a minute on the low cost ink refill system to fill each tank. The chip encoded filling station can refill all four

color tanks at the same time, if required and prevents resellers refilling other customers’ tanks, or using a third party ink. Beswick told Recycling Times, “Memjet decided, from the very beginning, they would be different to other OEMs by allowing refilling to be part of the business model.”

The only toner conference to be held in North America will proceed, after being cancelled. Art Diamond started the annual Toner Conference in 1984. In 2009, the event was licensed to others, but was dropped this year. So the Tiara Group’s Terry Gorka (pictured) and Art Diamond will run the event themselves. Gorka says delegates can register online at www.2013tonerconference. com for the June 2-4 conference, in Santa Barbara. “It attracts toner manufacturers, chemical producers, OEMs and the aftermarket interested in the hard copy supplies market, specialty toners, and environmental bio-toners.” Watch what Terry Gorka says at bit.ly/YF6PEq ■

Watch what Kim Beswick has to say at bit.ly/Zfq4rV ■

www.iRecyclingTimes.com|Issue38

ENVIRONMENT

E-Waste Recycling Program Sets World Record in Australia

Residents disposing of their e-waste free at TechCollect’s website during April expect to set a new world record. The company is driving this free recycling initiative to keep electronic

products out of landfills. An estimated 106,000 tons of e-waste came from about 16.8 million printers, TV sets, computers and related accessories recycled annually in Australia. It’s said 90% of all computers and TVs can be recycled and made into new products. However, there is only 10-17% of Australia’s e-waste recycled.” Read more: bit.ly/ZdKtga ■

E-Waste Disposal Not A Serious Problem in Singapore E-waste disposal problem in Singapore is not as serious as that in other Asian markets. It’s attributed to two main reasons: active recycling and a secondhand market. In addition, IT vendors have their own programs to collect used devices for recycling and these initiatives are coordinated with local waste disposal facilities.

Fuji Xerox Singapore said, “Fuji Xerox collects used printers and cartridges from customers’ offices for recycling. The company also recycles its own printing equipment. Fuji Xerox’s e-waste management efforts are supported by its integrated recycling centers located in Thailand, China and Australia.” Read more: bit.ly/YIK6vl ■

Canon Recycles Ink Jet Cartridges in Europe After a one-year experimental period in the UK and Germany, Canon Europe announced its official launch of an ink jet cartridge recycling program. Canon printer users, living in 15 European countries, can now bring their spent or empty inkjet cartridges into Canon stores for recycling. This program is said to result in the reuse of over 97% of a cartridge while the

remaining 3% is used to generate energy from waste. Started in 1990, the program is said to have recycled more than 287,000 tons of toner cartridges and helped saved 185,000 tons of new raw materials and reduced 430,000 tons of CO2. Read more: bit.ly/W04p6b ■

Correction: InkTec Still Produces LFP Consumables Last month, Recycling Times incorrectedly reported that InkTec stopped production of large format printing (LFP) consumables. According to InkTec’s Rick Kim, "InkTec still has put a lot of effort into the development of new inks and continues to produce and supply

over several hundred inks for desktop printers. For the LFP products, we keep on producing a wide range of inks and consumables for the large format printing industry." We apologize for any confusion we caused to InkTec and its customers.

www.iRecyclingTimes.com|Issue38

PROFILE 24 RESEARCH

Selling Supplies through

Internet Distribution Channels

Issue38|www.iRecyclingTimes.com 8|www.iRecyclingTimes.com

RESEARCH

Every year it becomes more apparent the Internet is disrupting how traditional businesses, especially retailers, conduct the business of selling products to their customers. This is clearly evident for supplies. People are not shopping at big box stores as much as in the past—especially for technology products and consumables. Unlike other items, such as clothes, supplies are considered interchangeable and are available in several places offline and online. Many retailers are facing a challenge to their business model as consumers use the retail store to experience the product and their smartphone to find the lowest price, also known as “showrooming.”

InfoTrends Inc. In

Many retailers, including office superstores, are re-evaluating their current models and looking for ways to cut expenses and improve performance. Specifically, the three major office supply chains (i.e., Office Depot, OfficeMax, and Staples) are looking to improve service offerings and make investments in their e-commerce offerings. Office Depot

recently reported increased traffic and larger average orders for e-commerce. On the other hand, plans are under way for the chains to close underperforming stores and improve the customer buying experience by reformatting the stores. For example, Office Depot has a new concept to encourage shoppers to interact more with products, with Office Depot associates, and with each other.

Internet Categories The Internet has forever changed the landscape of how products are evaluated and purchased. There are two major ways the Internet impacts the supplies market. The first is the Internet as a channel, which is comprised of five major categories. (see Table 1) The second way the Internet impacts supplies is using it as an ordering method,

Internet Category

Site Examples

Product Range

Delivery

Supplies Brands

Other Info.

Broad Internet

eBay, Am azon

Very wide range of products; supplies not the focus

Various options including free, cost per item, expedited (cost); depends on seller

Mix of OEM and aftermarket brands

Very low prices; eBay auction site; Amazon Prime membership available

Supplies Specialists

123Inkjet, Carrot Ink

Supplies

Usually free above a certain level

Brick and Mortar

Best Buy, Walmart, Target, Office Depot, OfficeMax, Staples

Extensive; broad range of office supplies and other products

Usually free above a certain level

OEM.com

HP.com, Epson.com

Most supplies including paper for all products even discontinued hardware

Often free

OEM

Competitive prices; small but growing

Catalogs.com

Reliable.com, quill. com,

Office supply or IT focused

Usually free above a certain level

Focused on OEM with some aftermarket

Competitive prices; major catalogs owned by office supply superstores

Very focused on aftermarket, but carries OEM too OEM, Aftermarket, and Private Label including store brand

Very low prices; high share of IP infringing supplies

Competitive prices

Table 1: Internet Categories

www.iRecyclingTimes.com|Issue38

26 RESEARCH

which could replace a phone call, fax, personal visit, or mail order. Most businesses in operation today have the capability for customers to order over the Internet and many have added mobile apps so customers can order right from their tablet or smartphone. While there are no official definitions to distinguish the Internet in terms of a channel or method, there are some general concepts to consider that center around delivery. Products ordered through an Internet channel are delivered by a postal service, UPS, FedEx, or another common carrier, while products ordered by the Internet as a method can be delivered by the seller’s own trucks or people. Many channels of distribution offer the Internet as a method of ordering, including OEM direct branches or service locations, office equipment dealers, contract stationers, IP specialists, and retailers. While not a hard and fast rule, there are numerous variations that can make Internet channels, compared to other methods,

Western Europe

more complicated. For example, many retailers (e.g., Walmart and Staples) are offering the ability to order items on the Internet that can be picked up at a local store within a specified timeframe.

While not a hard and fast rule, there are numerous variations that can make Internet channels, compared to other methods, more complicated. Internet by the Numbers: Distribution Channel Shares by Technology Based on InfoTrends estimates for the U.S., the Internet Specialist is gaining in share for OEM and aftermarket supplies, while retail looks flat. This is supported by reports coming out of the office superstores

■ Office Superstore

■ Warehouses/Clubs

■ Internet Specialist

■ IP Specialist

■ Other Consumer Retailer

■ Direct Mail Catalogs

■ Contract Stationer

■ Computer Superstore

■ Hardware Vendor

■ Small BPIA

U.S.

Figure 1: Inkjet Cartridge Distribution (2012)

Issue38|www.iRecyclingTimes.com

that indicate that the three major chains (as noted above) are looking to make changes in their strategy by opening smaller stores, closing unprofitable stores, and investing more in the Internet and web businesses. Business-to-business (B2B) companies are optimistic about business inkjet and are waiting for the market to develop. In Western Europe, the Internet and other retail channels are gaining share while others are losing share. For some channels without a strong Internet presence, it is tough to beat the price and breadth of products that can be found on the Internet. As page wide inkjet gains share (assuming it will), we expect to see inkjet cartridge sales shifting to the channels frequented by small and medium businesses (SMBs).(see Figure 1) In the U.S., black and white and color laser supplies have similar channel trends. The main differences tend to result from color being mainly in the office while black is in homes and office. As for inkjet, Internet is growing as a channel

RESEARCH for laser supplies. MPS could shift more to OEM direct, but other channels are also adopting MPS which can impact shares for channels. (see Figure 2) In Western Europe, there is slow change for channels, but the Internet is a primary growth channel. For the U.S. copier supplies market, channels that can combine supplies with services dominate the market, which can be very challenging via the Internet. In addition, much of the copier market is managed by service contracts, which are not easily implemented over the Internet. Nevertheless, remote servicing is possible for some situations. Research shows that OEMs control a larger share of the color installed base than the monochrome installed base. The market has seen shifts between Business Technology Association (BTA) and OEM direct channels, which are largely dependent on channel ownership—especially where the OEMs have been buying the channel in some cases. (see Figure 3) It is interesting to note that independent dealers tend to control more of the installed copier base in Europe than in the United States. Nevertheless, the OEMs are taking share due to a greater shift to color and OEMs acquiring more dealers.

OEM and Aftermarket Supplies by Channel Table 2 (below) looks at broad sections of the market and how it is structured, based on OEM and aftermarket supplies. Any type of supplies is available on the Internet, including clones, remanufactured, and counterfeit cartridges (in addition to OEM supplies). It is evident that the Internet has a bigger play for aftermarket supplies, which is logical given that it is easy to research and find the best price. Consequently, it appears that consumers order products using the best price as many that shop via the Internet are motivated by price and convenience. Nevertheless, it is not always evident to the shopper what product they are actually purchasing— OEM or aftermarket. Correct identification is not always easy, but it is getting better.

Retail OEM Direct B2B Internet

Figure 2: U.S. Office Laser Cartridge Distribution (2012)

Figure 3: U.S. Copier Toner Distribution (2012) Fig

The Internet is disrupting the traditional retail establishment due to its purchase convenience, pricing, and easy shipping options.

and build satisfaction. By its very nature, e-commerce is moving fast and can be a challenge for some retailers to keep up. If unable to do this, chances are they will lose out to companies that can perform better in the market. This report will further explore the effect of the Internet on the ordering and purchasing of office supplies.

Online or Offline: Selling Supplies on the Internet Study

For more information about this report, contact Scott Phinney at Scott_Phinney@ infotrends.com.

The Internet is disrupting the traditional retail establishment due to its purchase convenience, pricing, and easy shipping options. Disruption is always part of the ecommerce environment, but innovations in this area will hold customers’ attention

Inkjet Cartridges OEM Aftermarket 91% 9% 100% --87% 13% 76% 24%

B&W Laser Cartridges OEM Aftermarket 81% 19% 100% 0% 63% 37% 58% 42%

Color Laser Cartridges OEM Aftermarket 99% 1% 100% --92% 8% 87% 13%

Table 2: U.S. Distribution of OEM and Aftermarket Cartridges (2011)

www.iRecyclingTimes.com|Issue38

LIFTOUT DIRECTORY

CARRIER POWDER PRODUCERS ASIA DOWA ELECTRONIC MATERIALS CO., LTD. Dowa Electronics Materials Co., Ltd. supplies semiconductors, electronic materials, and magnetic materials to meet the needs of many diverse markets from its manufacturing bases in Japan and Singapore. Its powdered iron materials have many applications, including carrier powder for copiers, printers and other devices and powder metallurgy. Dowa boasts a commanding share of the world market for metal powders used in videotape for TV

broadcasting and data storage tape for computer use. The company has the largest share of the world market for the ferrite powder used in magnets for magnetic rollers in printers and copiers. 4-14-1 Sotokanda Chiyoda-ku, Tokyo, Japan Tel: +813 6847.1250 Email: electronics@dowa.co.jp Website: www.dowa-electronics.co.jp

KANTO DENKA KOGYO (KDK) CO., LTD. Kanto Denka Kogyo (KDK) ferrochemicals contribute significantly to progress in the rapidly evolving IT industry. In the reprographics segment, the quality of the magnetite and carriers, which supply toner to the photoconductor drums, is critical as copier and printer manufacturers seek to increase functionality and image quality year after year. With our surface-coating expertise and a proprietary Kanto Denka resin-coating technology, we can supply carriers of all the major types--iron, magnetite and ferrite--custom tailored

to each manufacturer's specific needs. In addition to iron and magnetite carriers, our lineup also satisfies environmental concerns with clean and environmentally friendly ferrite (EF Ferrite) free of heavy metals. Oriental International Building No. 85 Lou Shan Guan Road Changning District Shanghai, China Tel: +86 21.6278.7004 Email: info@kantodenka.co.jp Website: www.kantodenka.co.jp/english/

Developer Material: Carrier Powder Charles E. Bobich, President, Vertex Image Products, Inc.

Electrophotographic (EP) developer materials (also known as carrier powders) are typically used in two-component developer systems to transport toner from a developer brush to a photoreceptor (PR) drum belt or plate. Also, by mixing and frictional interaction with the toner particles, carrier powders generate a triboelectric charge on the toner that enables development of the latent electrostatic image on the PR surface. Finally, these materials also sweep across the photoreceptor surface to remove residual toner particles and bring them back to the developer mix stored in a bin or hopper. Carrier particles must exhibit specific properties to work well. They should be sufficiently magnetic to hold in place magnetically, but not so magnetic as to make the magnetic brush stiff and scratchy. The carrier should charge the toner for optimum image development and system cleanliness. Small amounts of current must flow through the developer to supply control voltages, but not so much as to kill the static charges of the latent image. (To be continued on p3)

GUANGZHOU AUKING DIGITAL TECHNOLOGY CO., LTD. Guangzhou Auking Digital Technology Co., Ltd. is engaged in the R&D, production, sales and service of carrier and toner powders for digital copiers, printers and fax machines. It purchases basic iron and ferrite powders from Japanese sources for sorting and coating prior to resale. Auking has a 17,000 sqm plant in Guangzhou that houses its toner production and carrier treating lines.

Lindy Lau, Manager Room G, F, H, 8th Floor, North Tower, Ruihua Building, NO. 267, Wushan Road, Tianhe District, Guangzhou, China Tel: +86 153.6066.6591 Email: lindy_auking@auking.com.cn Website: www.auking.com.cn

NEXT ISSUE: Weâ&#x20AC;&#x2122;ll publish the directory of Dye and Pigment Dispersions Manufacturers in next monthâ&#x20AC;&#x2122;s edition of Recycling Times magazine. If you want to be in the list, please send your company profile details to Ms. Violien Wu at violien.wu@irecyclingtimes.com.

www.iRecyclingTimes.com|Issue38

LIFTOUT DIRECTORY

EUROPE HÖGANÄS AB Höganäs AB is a world leader in the production of atomized steel and iron powders. For many years, Hoeganaes’ irregular, sponge iron powders served applications in EP imaging, especially for the Electrofax process which used a zinc oxide coated paper as the photoreceptor upon which the image was formed, developed and fused. Eventually xerography, a plain paper imaging

process, dominated office copier and printer technologies and the Hoeganaes carriers were largely displaced by spherical ferrite particles. Ms. Rose-Marie Yttergren Development Manager S-26383 Höganas Sweden Tel: +46 42.338.620 Email: rosemarie.yttergren@hoganas.com Website: www.hoganas.com

NORTH AMERICA GKN HOEGANAES GKN Hoeganaes, with its main office located in Höganas, Sweden, is a world leader in the production of atomized steel and iron powders. Its core competence is in metal powder technology. (See HÖGANÄS AB, above in Europe)

Mr. Trevor Towns, Market Manager 111 Hoganas Way Hollsopple, PA 15935 Tel: +1 814.479.3560 Email: trevor.towns@nah.com Website: www.gkn.com/hoeganaes

POWDERTECH INTERNATIONAL CORP. Established in 1959 in the United States, Powdertech expanded into international operations in 1989. Today this innovative leader in powder technology is a world leader in manufactured specialty powders. Powdertech’s ability to respond to the dynamic demands of the marketplace has yielded a history of breakthroughs in powders for various industries. From products for preserving food freshness, to electrophotographic

powders for digital printing and powder coating, Powdertech’s core expertise delivers new technologies to meet today’s evolving needs. Mr. David A. Beckwith, Vice President 2501 Chicago Street, Suite B Valparaiso, IN 46383-6087 Tel: +1 219.548.1482 Email:dbeckwith@powdertech.com Website: www.powdertech.com

QUEBEC METAL POWDERS (QMP) Over several decades, QMP has become a global leader in the manufacture of iron and steel powders. The company was established in 1968 to manufacture iron powder from the high-purity iron produced by sister company, QITFer et Titane Inc. Rio Tinto, one of the largest minerals and metals companies in the world, owns QMP and QIT. QMP's status as a global player in the powder metallurgy industry is further enhanced by access toQIT and Rio

Tinto resources, which have contributed to the development of new products that comply with customer needs worldwide. Rio Tinto operations in 40 countries employ some 34,000 people around the world.

Finally, the mixture should flow as required with relatively little energy.Over the years, carrier particle technology has evolved from non-magnetic glass beads, to raw iron particles, to blued iron and steel powders, to irregular shaped, coated iron powders, to highly sophisticated, coated, spherical ferrite powders. These latter carriers are in current use, especially as manganese and magnesium ferrites, for color EP printers, copiers and multifunctional devices. As part of the evolutionary process, carrier materials have grown increasingly smaller, from over 200 microns in the 1970s to some as small as 20 to 35 microns at the present time. In the meantime, the use of nonmagnetic, single-component development systems has increased in a trend toward the elimination of carrier powders. Driving this shift is the greater simplicity of a single component developer (toner only). Especially of concern is the reduction in intervention events to replace the carrier powder as its coating is gradually abraded resulting in a continuing loss in triboelectric properties. Thus, the limited life of the carrier in a developer mix necessitates an intervention to replace it. Commonly this can be done when toner is replaced, either all-at-once or gradually. Does carrier/developer have a future? Everything eventually ends, and the trend lines for carrier were expected to hit bottom a dozen years ago. Nevertheless, the technology persists for a range of reasons, and will likely exist in some form as long as images are being applied to paper electrostatically.

Mr. Mark Kesterholt, Sales Manager 155 S Eastway Drive Troutman, NC 28166-9609 Tel: +1 814.594.6628 Email: mark.kesterholt@riotinto.com www.iRecyclingTimes.com|Issue38

LIFTOUT DIRECTORY

VERTEX IMAGE PRODUCTS, INC. Vertex Image Products, Inc. supplies commercial and custom carrier powders used in copiers, printers and multifunction devices in the reprographics industry. Vertex carriers have found use in electrophotographic systems including copiers, printers, microfilm systems, "blueprint" duplicators, and MICR conversion systems. The Vertex family of coating materials includes oxide layers, styrene/acrylics, vinyls, silicones, and fluoropolymers. Also available is a line of materials testing

instrumentation for toner that measures: triboelectric charge, dielectric properties, and conductivity. Mr. Charles E. Bobich, President 173 Spring Street, Yukon, PA 15698-9702 Tel: +1 724.722.3400 Email: cbobich@yukonwaltz.com /cbobich@westol.com Website: www.verteximage.com

Directory Publishing Plan June 2013

Manufacturers of Dye & Pigment Dispersions

July 2013

Trade Associations

August 2013 September 2013 October 2013

Print Testing Labs Manufacturers of Monochrome Toners Manufacturers of Photoreceptors

November 2013

Manufacturers of Color Toners

December 2013

Manufacturers of Blades

January 2014

Manufacturers of Smart Chips

Febuary 2014

Manufacturers of Inkjet Inks

March 2014

Empty Cartridges Collectors and Brokers

April 2014

Manufacturers of Primary Charge Rollers

We’ll publish the directory of Dye and Pigment Dispersions Manufacturers in next month’s h’s ’’ss edition of Recycling Times magazine. If you want to be in the list, please send your company ny profile details to Ms. Violien Wu at violien.wu@irecyclingtimes.com.

This Directory, compiled by the staff of Recycling Times magazine, represents the best information currently available to us regarding those Carrier Powder (carrier bead) producers serving cartridge remanufacturers worldwide. Although a few of the listings in this Directory are companies that are either no longer in business, or no longer offer carrier powders, they are shown in this compilation for information purposes only. We plan to review and update this Directory on an annual basis. Your comments, additions, deletions and suggestions are most welcome as they will enable us to expand and certify the information presented. Please email changes to Ms. Violien Wu at violien.wu@irecyclingtimes.com.

Issue38|www.iRecyclingTimes.com

LEGAL UPDATES

www.iRecyclingTimes.com|Issue38

LEGAL UPDATES On March 19, 2013 the United States Supreme Court in the case of Kirtsaeng v John Wiley & Sons, Inc. (“John Wiley”) ruled that the first sale extinguishment of copyright rights is not limited to first sales in the United States. The question this decision raises is whether or not it effectively overrules the CAFC (U.S. Court of Appeals for the Federal Circuit) decision in Jazz Photo. （see below） The John Wiley Decision In Jazz Photo, the Court held that first sale extinguishment of patent rights only occurs if the product is sold in the United States. That decision has caused many problems for the recharging industry. Many of the used or spent cartridges purchased in this industry are first sold overseas, and therefore under the Jazz Photo ruling, the refurbishing and subsequent resale of those products in the United States constitutes patent infringement. Because John Wiley involved copyrights, only, the question of whether or not the Jazz Photo ruling is effectively overturned has not been finally decided. A few days after the John Wiley decision, the Supreme Court refused to accept Ninestar’s request for the Court

to accept its appeal from the CAFC regarding the Jazz Photo question. In other words, the Supreme Court could have resolved the issue of first sale extinguishment by overseas sales as it relates to patents, and chose not to, at this time. Accordingly, the question of whether or not the John Wiley decision effectively overturned Jazz Photo, will have to be made by the lower courts. At present there are cases pending in Federal District Courts, wherein Jazz Photo is being challenged. It remains to

The Supreme Court could have resolved the issue of first sale extinguishment by overseas sales as it relates to patents, and chose not to, at this time.

be seen whether the courts will conclude that John Wiley effectively overturned Jazz Photo. Eventually one or more of those decisions will have to be decided by the CAFC. That may take a number of years. In the meantime, individual members of the recharging and remanufacturing community will have to make their own decision as to whether or not they want to take a chance on the issue of whether or not the courts will conclude that Jazz Photo is a no longer valid law. In my opinion, John Wiley did effectively overturn Jazz Photo. My reading of the John Wiley decision is

that the United States Supreme Court reaffirmed the general principle of first sale extinguishment, and further that the first sale extinguishment of all property rights occurs whether or not first sale is in the United States or some other country. The general doctrine applies to the U.S. copyright laws because there is nothing in the statute which would prevent the general rule from applying to copyright cases. 17th Century English Law and the First Sale Doctrine The United States Supreme Court grounded its decision on writings by Lord Coke in early 17th century England, long before there were any patent or copyright laws in the United States. It then went on to discuss the Bobbs-Merrill Co. v. Straus, 210 U.S. 339 case which was decided in 1908. The Court, in its opinion, stated: “Rather, as the solicitor general acknowledges, a straightforward application of would not preclude the first sale defense from applying to authorized copies made overseas.” Specifically the United States Supreme Court stated: A relevant canon of statutory interpretation favors a non-geographic reading. “[W]hen a statute covers an issue previously governed by the common law,” we must presume that “Congress intended to retain the substance of the common law.” The “first sale” doctrine is a common-law doctrine with an impeccable historic pedigree. In the early 17th century Lord Coke explained the common law’s refusal to

Jazz Photo Commercially acceptable, 35 mmbased, disposable cameras were first brought to market in 1986 and 1988 by Fuji Photo Film and Eastman Kodak, respectively. Sold with a single roll of film inside, the cameras were designed to be discarded after the exposed film was removed and developed by a photo lab Soon after their introduction, however, some 37 companies, including Jazz Photo, began purchasing the spent cameras from photo labs outside the U.S.,

where they were disassembled, a fresh roll of film installed, and the original batteries replaced with new ones. These “refurbished” disposable cameras were then resold in the U.S. Jazz Photo argued that it had the right to refurbish and resell the cameras. Fuji claimed that because the cameras were not first sold in the U.S. its patent rights remained intact. The Court of Appeal for the Federal Circuit, which hears all patent appeals, agreed with Fuji. The Supreme

Court hat held that for thee patent owner’s rights to be exhausted, the first sale must occur in the United States. Many believe the latest Supreme Court ruling, (while it deals with copyright law) set forth principles that make it likely that Jazz Photo will be overturned, if and when it is tested in court. www.iRecyclingTimes.com|Issue38

LEGAL UPDATES

permit restraints on the alienation of chattels. Lord Coke wrote (1 E. Coke, Institutes of the Laws of England §360, p. 223 1628) that a law that permits a copyright holder to control the resale or other disposition of a chattel once sold is “against Trade and Traffi[c], and bargaining and contracting.” Ibid. With these last few words, Coke emphasizes the importance of leaving buyers of goods free to compete with each other when reselling or otherwise disposing of those goods. Thus, it is not surprising that for at least a century the “first sale” doctrine has played an important role in American copyright law. See Bobbs-Merrill Co. v. Straus, 210 U. S. 339 (1908). The common-law doctrine makes no geographical distinctions; nor can we find any in Bobbs-Merrill (where this Court first applied the “first sale” doctrine) or in §109(a)'s predecessor provision, which Congress enacted a year later. See supra, at 12. Rather, as the Solicitor General acknowledges,

I can think of no reason why the Court’s fundamental reasoning should not apply equally to patents as it does copyrights.

“a straightforward application of Bobbs-Merrill” would not preclude the “first sale” defense from applying to authorized copies made overseas. Essentially, the Court was saying that first sale extinguishment applies, regardless of whether or not the first sale occurs overseas, unless there is a specific provision in the statutory scheme which would limit the sales to U.S. sales. John Wiley argued that there was in fact language in the copyright statute with

limited first sale extinguishment to USA sales. The Court rejected that argument and then applied the fundamental first sale extinguishment document which makes no distinction between U.S. and overseas sales.

as it applies to patents. That is of no legal impact. Most likely the Supreme Court felt the lower courts can apply the general principal of John Wiley on their own. ■

Jazz Photo Effectively Overturned I can think of no reason why the Court’s fundamental reasoning should not apply equally to patents as it does copyrights. I know of nothing in the patent laws which limits first sale extinguishment to U.S. sales. More to the point, there was nothing in the CAFC decision in Jazz Photo which made any reference to any specific provision in U.S. patent laws which would exclude or exempt them from overseas first sale extinguishment of patent rights. Accordingly, I believe that the courts will conclude that John Wiley effectively overturned the Jazz Photo doctrine. Until a court actually makes that ruling, Jazz Photo is on extremely thin ice. Therefore, anyone who is sued for patent infringement, based upon refurbished products first sold overseas, can and should ask the court for a declaratory judgment that there is no infringement because of the John Wiley decision.

Ed O’Connor serves as chair of The Eclipse Group’s litigation department. His expansive career includes serving as a public defender in Palm Beach County, Florida; serving with Air Force J.A.G., where he wrote patent applications in computer technology, space exploration and advanced weapons systems; as well as in the capacity of senior intellectual property and litigation attorney with Intel where he was responsible for managing the organization’s worldwide litigation.

Email: efo@eclipsegrp.com

Ninestar Appeal The U.S. Supreme Court rejected Ninestar’s request to take up first sale www.iRecyclingTimes.com|Issue38

OEM NEWS

One Million A3 Inkjets Sold in Europe Brother has unveiled its sales record showing 1 million A3 inkjet printers have been sold in Europe in the past 5 years. Introduced in 2008, the “world’s first” A3 inkjet all-in-one (AIO) printer, has achieved that goal. In 2012 alone, over 316,000 units were sold. This, as Brother puts it, is “more than 5 times our nearest competitor”. Brother adds that 7 of the top 10 selling A3 inkjets were Brother models, which helped it achieve a 79% share of the overall A3 inkjet market. It believes its success in this sector has stemmed from its wide product range of 9 models. Read more: bit.ly/Zdz6oE ■

Epson Shifting to Upmarket Inkjet Printers In its updated business plan, Epson indicates it wants to move its inkjet business upmarket because the low-end is unprofitable. However, stiff price competition has made it tough for Epson to completely avoid the low end where it still offers several sub-$99 printers.

Epson expects the inkjet printer market to remain flat in the next three years, as shrinkage in developed markets offset growing sales in emerging economies. Epson also states that it invested in volume production of a new piezo print head in fiscal 2012, and plans to introduce printers using the new head in fiscal 2013. Read more: bit.ly/YpY00E ■

OKI’s Business Plan Includes 800 Layoffs OKI Data told an investor group it had a strategy for improving its declining printer business. The plan includes the layoff of 800 workers. OKI stated that while profitability has improved in its other businesses, the printer business has reported increased operating losses as sales have steadily fallen from ¥185.8 billion in 2007 to ¥110.0 billion in 2012. OKI indicates dramatic structural reform is needed to recover profitability. To do this, OKI announced plans to reduce fixed

costs, reform its design and procurement functions, and strengthen management. Read more: bit.ly/10oewAl ■

www.iRecyclingTimes.com|Issue38

OEM NEWS Fuji Xerox Continues its Investment in China Fuji Xerox has announced the establishment of Fuji Xerox Service (China) Inc., a company that provides document outsourcing services. Fuji Xerox plans to offer customers in China a full range of efficient document outsourcing to help create value and enhance business growth. The new subsidiary demonstrates Fuji Xerox’s commitment to increasing its investment in China. China is now the major production base of Fuji Xerox as well as the significant potential market for its products. The

founding of Fuji Xerox Service (China) Inc. will undoubtedly enhance Fuji Xerox’s overall business landscape in China. Read more: bit.ly/YS8hpV ■

OKI’s White Toner Technology Wins Awards OKI's white toner technology, utilized in the C711WT LED printer, has won the “Best in New Technology” prize at the Euro Trophex awards in Birmingham, UK. Harry Takahashi, Managing Director of OKI Europe, said “With our new LED printer, we are set to mainly expand. Up until

now, it has been a highly specialized, niche ‘white printer’ market. Over many years, OKI has built much of its success on technology innovation. Our products are making the most of their ability to print a broader range of high quality materials inhouse.” Read more: bit.ly/YrJn2Z ■

Samsung Lists Products in All Three EPEAT Categories Samsung claims it is the first manufacturer to have products listed in all three categories of the EPEAT registry. EPEAT is the definitive global index for electronics used by governments, institutions, and consumers to identify environmentally preferable products such as printers, laptops, and televisions. To enter the EPEAT registry, products must meet several environmental performance criteria formulated by representatives from the environmental, manufacturing, research, recycling, and government sectors. EPEAT’s rating system is used as an environmental requirement by 8 national governments, including the United States and by thousands of purchasers worldwide. Read more: bit.ly/XX4gx8 ■

www.iRecyclingTimes.com|Issue38

REGIONAL NEWS

Europe With José Bustamante < redaccion@consumiblesEmagazine.com> • 2013 is looking like a good year for Spanish and Portuguese cartridge remanufacturers and dealers, according to a Consumibles e-Magazine survey. Almost 40% of the 300 respondents said the first three months had been "very good", just over 20% said "good", 32% answered "average" with only 8% saying they have had a "very bad" start to the year. The survey gives some hope to the industry for the first time since the economic crisis started 5 years ago. It is estimated 230

consumables remanufacturers and dealers have gone out of bussines since 2008. • OEMs are asking remanufacturers to help them point out companies importing and selling cloned cartridges into the Spanish market. Due to the severe economic crisis, the need to cut costs, and the lack of action from law enforcement bodies, the Spanish market has been flooded with cloned cartridges. OEMs have been hit by unfair competition from clones and have seen their market share reduced. Clones have also led to the closure of half the remanufacturing operations in the country and left over 1,000 people jobless. The OEMs are making the right moves and the authorities are starting to take action.

• German-based ink manufacturer OCP reports over 2,500 kilograms of ink has been stolen from its warehouse over the last 3 to 4 months. They are offering a €5,000 ($6,500) reward for information which leads to the arrest of the criminals. A criminal investigation is underway and as it is believed the stolen inks have already found their way to market.

Asia Pacific

Africa

With Maurice Aiken <MauriceA@keytek.com.au> • HP, Kyocera, Xerox and Epson have all pushed up the wholesale prices on their toner and ink consumables in Australia and New Zealand. Hikes in prices between 5% and 15% are much higher than the Consumer Price Index (CPI) which currently stands at 2.2%. And the prices also rose in spite of the high currency rates against the US dollar. • Compatible cartridges, coming mainly from China continue to flood the Australian market with extremely low prices

due to the strong currency and increasing competition from suppliers. The street price on some websites are AUD$19 (US$20) for a HPQ2612A and the wholesale price is just AU$9 (US$9.40) against AU$75 (US$78) for the original HP toner product. The prices on some inkjet cartridges are less than $1. Margins have never been been so attractive for the compatibles which have almost destroyed the remanufacturing industry there.

North America • With coverage spanning the United States and Canada, Parts Now has expanded its logistics reach with a new distribution center in Houston, Texas, bringing the total number of Parts Now distribution centers to seven. The addition of the Houston-based distribution center allows Parts Now to better reach to customers in the South Central region,

including faster order turnaround times plus same day, next day and drop ship delivery services.

• According to a Canon study, 97% of Middle Eastern and African organizations still consider professionally-printed documents important in their business. 54% of the organizations surveyed consider print to be more effective than any other type of media. 90% state that they would include print in their multi-channel communications tools, the highest percentage amongst all the different types of media. The result is in contrast with the popularly accepted belief that the digital would gradually replace print in terms of its importance to a company's marketing and communications strategy.

www.iRecyclingTimes.com|Issue38

DIGITAL PRINT NEWS

Xerox Rolls Out Next Generation Printer Trade Arabia reports Xerox has rolled out its iGen4 Diamond Edition. This next generation of Xerox’s iGen4 platform offers print solution providers a competitive advantage in producing brochures, catalogues, magazines and direct mail pieces. Many of the enhancements of the

iGen4 Diamond Edition are time saving, automated features found on the Xerox iGen 150 Press, including the 26" stacker and color maintenance which takes the complexity and manual labor out of analyzing color images. Read more: bit.ly/Yo3pdc ■

Canon Middle East Signs Million Dollar Deals Canon Middle East has signed 7 deals with a combined worth of $1.9 million. The transactions took place on the first day of the biennial Gulf Print and Pack show at the Dubai World Trade Centre. They involve sales of Canon’s line of imagePRESS and imageRUNNER digital

and color printers. These printers are known for their efficiency and versatility. Mr. Hendrik Verbrugghe, Marketing Director, Canon Middle East, says the deals emphasize the stability of the digital press industry throughout the region. Read more: bit.ly/14dKtlc ■

HP Intros New Scitex Inks, Latex Media Options HP has launched its new Scitex inks and Latex media options for large format digital printing service providers (PSPs). HP will offer its Scitex FB7600/FB7500 Enhanced Color Pack worldwide starting on May 1, 2013. This color set can be used in the HP Scitex FB7600 Industrial Press. With the newest Orange and

Light Black Scitex Inks, the color pack can provide six, seven, or eight color configurations. The Orange Scitex Ink is useful in providing true-to-life skin tones and easier color matching. The Light Black Scitex ink enables users to print better gray solids and improve neutrality. Read more: bit.ly/17ooMgM ■ www.iRecyclingTimes.com|Issue38

OPPORTUNITIES

MY VIEW

FIRST SALE DOCTRINE

Continuous Ink Sup A Growth Opportu

Skip London General Counsel at Static Control Components Inc.

The implications of the Supreme Court’s ruling in Kirtsaeng v. John Wiley & Sons regarding patent law, and the impact on reimportation of cartridges into the United States won’t be clear for some time. A bill is being introduced in Congress that would prohibit the importation of copyrighted products first sold overseas. If the bill passes, then the current patent law is unlikely to change. If the bill does not pass, then the Supreme Court will have to decide whether to overturn the existing law for patents or distinguish patents from copyrights based on the statutory language. Until the Supreme Court rules, the Federal Circuit Court of Appeals, which hears all appeals of patent cases, is likely to interpret patent law the same way as before the Kirtsaeng decision.

Christian Pepper Executive Vice President, PrintersDirect LLC

Whilst I agree the copyright ruling presents an opportunity to challenge the first sale doctrine in the USA, the ruling clearly states copyright and not patent law. Over the past 5 years a handful of the most successful domestic US Remanufacturers have invested in empty cartridge collection programs or bought companies that return them the US sourced cores they need. This has been one of the most important reasons for their success. Therefore, it may not be in their interest to try and overturn the First Sale doctrine as opening up the US market to foreign sourced cores would bring about fresh domestic competition. If this is the case, perhaps the real question is which company or trade organizations have the motivation and finances to bring Comments on about the legal the US Supreme challenge? Court's ruling on copyright Read more about this topic on p29 Issue38|www.iRecyclingTimes.com

Much has been written and said recently about continuous ink supply systems (CISS). Varieties of aliases have been assigned to these ink storage and feeding devices including: Bulk Systems, Bulk Feed, Big Ink, High Capacity Cartridges, etc. But many still ask, “How can we use these to grow our business and profit from them?” Here are some clear and practical answers to that question. Looking Back First, at the risk of repeating what has already been said, let’s define what CISSs are and how they are used. Inkjet printers initially were only desktop machines. The heads had to “scan” across the substrate to deposit the image, line by line. After initial issues about transporting ink to the heads with tubes and other methods, many OEMs began to put a cartridge on top of the heads and use it as the ink supply. In order to keep weight and mass down, there could only be a limited amount of ink in these cartridges. This limited the amount that could be printed before the operator had to intervene by replacing the spent head with a fresh one. OEMs quickly learned that they could make a huge profit by packaging their inks into this integrated printhead. As applications expanded they created a heavier demand for ink to complete a job without draining the reservoir completely. Some manufacturers—especially for the newly emerging wide format printers— began to modify the cartridges by adding ink feed lines which ran to a larger holding tank filled with ink. These systems allowed the users to run bigger jobs on these ink hungry wide format printers without frequent intervention. Enter the Smart Chip Because the OEMs feared losing their high profit margin ink business, they began to use security chips (smart chips) to ensure that end users would continue to use only OEM inks. The problem was that OEM inks were not always as good as aftermarket inks that were

being developed specifically for many of these unique, wide format applications. Indeed, independent ink companies were capable of formulating specialty inks that would work better in a particular application, or with a specialty media. In addition, they were able to price their inks below the OEM level as the margins were typically very high to begin with. Because the early, encrypted smart chips proved easy to defeat, the inkjet ink aftermarket, especially for wide format printers, began to grow. For desktop printers, rechargers began remanufacturing the OEM cartridges and thereby captured a growing share of the replacement sales. Of course, this drew more attention to trends in the courts and less to trends in the marketplace. The evolution continued with many desktop inkjets starting to use larger cartridges that delivered ink to the multiple nozzle printheads via internal tubing systems. Now that the printers had a bigger ink supply, many applications were developed that needed more ink. Today, most wide format printers have CISS or bulk systems (more on the exceptions later) that keep the ink supplied to the heads for virtually continuous printing capability. So what is happening with the desktop printers and CISS systems? Most of the rechargers were initially content to offer the remanufactured cartridges that echo what the OEM supplied. Most use inks that are okay for documents and simple business graphics or for lower quality images. What has been ignored is the fast growing production uses of smaller format printers which almost universally have become outfitted with a bulk ink or CISS system and specialty inks for all of these new niche markets. Exploring Niche Markets The opportunity that is being missed is that many of these desktop, A4 printers are being modified and used for actual business production applications that use substantial quantities of ink. Many of these inks are not

OPPORTUNITIES

pply Systems: nity for Rechargers Charles Sharp, CEO, Digital Image Technology

generic, requiring different formulations. Among the many inks are those using either aqueous solvents or eco-solvents. UV-curing inks are also in great demand, especially for outdoor weathering images, packaging, etc. Most of these specialty inks are not low-priced, but deliver a high margin and often have very little competition. Think about it: Conventional ink cartridge rechargers are currently competing for all of the same customers and having to fight for each point of market share with ever decreasing margins. What if they entered the CISS segment? Then they could grow their business by offering solutions to niche markets that often use very large amounts of ink? Here, again, at much higher margins and with far fewer competitors. In addition to these printers, there are even some wide format printers for which the OEM still offers only a cartridge solution. The reasons vary, but it is often due to contracts with the printhead manufacturers. So, there are even opportunities in wide format for specialty inks using aftermarket CISS systems. Many of the print-for-pay shops have a fleet of different printers working simultaneously. Some of the applications include digital art, textile printing, garment printing, promotional products printing, tile printing, advertising printing, T-shirt printing, dye sublimation printing, edible ink printing and ceramic tile printing. For the most part, very few of the OEM inks are even made for these niche markets. These are your opportunities!

Another way is to private label their bulk systems as your own and market your ink and CISS system to the channels and end users. This way, you are offering a complete solution without having to engineer new bulk cartridges for each printer. The bulk systems do have their own idiosyncrasies, so unless you are already a cartridge manufacturer, it is probably not a good financial decision to try to make your own CISS systems. These systems, in quantity, are very reasonably priced and are often even given to new customers with an initial ink purchase or a minimum contracted ink purchase. In Conclusion In conclusion, there are a number of profitable opportunities in the inkjet niche markets. Many of these are accessible via the use of CISS systems that work around the OEM cartridge limitations. Many of these CISS systems also have smart chip workarounds that keep the printer thinking it has OEM ink on board and is not running out. There are several reputable manufacturers of bulk ink systems around the world. Many even may advertise in this magazine. If you need help locating one, send me an email with what you need and I may be able to help. Now get out there and make some serious money! ■ Chuck Sharp can be contacted at clsharp100@aol.com

Your Approach There are a couple of different ways to approach these markets. You can partner with a CISS manufacturer and market your inks to the distribution channels or end users by referring them to the CISS manufacturer. This way, you do not own the responsibility for the bulk system itself and can leverage your sales via them. www.iRecyclingTimes.com|Issue38

Helen Duan Lawyer, INNOPAT Intellectual Property Co., Ltd.

As to whether the international exhaustion will be applied on patent, the US courts may have some political considerations, such as how to balance the interest of the public and the private patent owner. According to China patent law, it clearly accepts the international patent exhaustion. But in US, I think the “first sold in US” doctrine is somewhat good for trade protection. It may not be changed even if a new case happens in the future.

Ed O'Connor Chair of the Eclipse Group’s Litigation Department

The court based its decision on a general legal principle that first sale of any product carries with it all of the rights included in that product, including intellectual property rights. The court also stated that there is no reason that the first sale extinguishment of rights should be limited to sales in the United States. It noted that there was nothing in the copyright laws which would limit first sale extinguishment to sales in the United States. That general principle should apply equally as well to first sale extinguishment of patent rights.The fact that the United States Supreme Court did not accept the petition from Ninestar has no legal significance, whatsoever, in the United States. In my opinion the Supreme Court decided that the general principle's application should be determined by the lower courts and the Court of Appeals for the Federal Circuit.

John Shane Director of InfoTrends

The ability to adhere to the existing requirements on the use of collected cartridges under the first sale doctrine is a distinguishing difference between remanufacturers that are able to adhere to those rules and others not so able. We would not be surprised to learn that some cartridge remanufacturers who currently are able to adhere to the rules currently in place are not so unhappy to see that their competitive advantage Comments on has not been the US Supreme dismantled. Court's ruling on copyright Read more about this topic on p29

PEOPLE

5 QUESTIONS

on the move, obituaries,

Empty Cartridge Collections What is the difference between an empties broker and an empties collector? Empty collectors sell empty cartridges (or cores) to brokers. They gather cartridges from a variety of end users including charities, clubs and schools who receive cash from the collectors for their respective causes. Then the collectors pre-sort and classify the cores by type, number of times used, and state of disrepair. The collector is also responsible for the rightful disposal of non-usable cores. Empty cartridge core collectors and brokers, like component suppliers, are at the beginning of the cartridge remanufacturing value chain. They are the first to monitor the status, numbers and availability of new cartridges used in the market. Collecting and brokering has become a multi-million dollar global industry, as empty cartridge cores are gathered from end users and brought back into the raw material supply stream for the aftermarket. emanufacturers recognize How can remanufacturers the quality of a good broker or core collector? plit this into two separate I would split uality of goods, and the parts: the quality rvice. It's difficult to quality of service. recognize thee quality of goods before ness with a collector/ you do business broker. So you should keep a dossier, or track record, ty of what you on the quality other option receive. Another is to make inquiries (we are being called or a lot lately for references). Collectors have ge of being able the advantage anufacturers' to meet remanufacturers' ds, demonstrating various needs, their quality control systems ent. to some extent. acturers usually Remanufacturers he empties want to get the ured and ready for remanufactured transport as soon as possible. A collector'ss quality of service is

special achievements

tested by how quickly they can deliver the cores needed by the remanufacturer. A good broker or collector will also provide extra support including necessary documentation, extra sorting, transportation assistance, and package labeling. Do brokers or collectors have influence on the price of empties? Prices are mostly influenced by the demand and availability of empties in the market. Yes, brokers charge higher prices than collectors and this will often influence prices. Collectors, however, depend on their collection programs, whereas brokers buy their empties from different companies. So brokers often have larger volumes of empties available, but at a higher price. Brokers also have higher volumes of the more scarce products. Is a clone cartridge a threat to the empty cartridge market? Remanufacturers want to reuse empty cartridges rather than see them end up in landfill. Theyy treat the patents of Original Manufact Equipment Manufacturers (OEMs) with respect. However, clone producers do sam philosophy. Cloned not share the same cartridges are a m menace because re they cannot be reused and hurt the th these illegal clones environment. I think will not last long, as they disrespect the inte rightful intellectual property of OE the OEMs. im Is it important for a brok or collector to broker have ISO standards qua qualifications? Y it's very important Yes, h ISO certifications. to have gua It guarantees you have systems and demonstrates p you can provide quality It' also important goods. It's en to have environmental and transport transportation certifications to sup better support your business. Lennart Zernitz, Sales Director/COO of Van Klaveren CCC, the largest empty cartridge collector in the Netherlands.

Chairman Steps Down Following Criticism Raymond J. Lane stepped down from the post of HP’s Executive Chairman of the Board on April 4. The resignation comes after investors criticized HP management for botching the $11-billion acquisition of British software company Autonomy.

First European to Lead Canon announced the appointment of Rokus van Iperen as the new President and CEO of Canon Europe, Middle East and Africa (EMEA). He becomes the first non-Japanese executive to lead Canon’s business in Europe. He previously served as the Chairman and CEO of Océ N.V. before it’s integrated with Canon.

30 Year Imaging Veteran Gets Hired Nubeprint Inc. announces the hiring of Matthew Ruhalter as Vice President of Dealer/Distributor Sales in the United States. Ruhalter has been working in the imaging industry for more than 30 years. He held various sales management positions at Konica Minolta, Neopost and Canon before joining Nubeprint.

Many Happy Returns Mr. Ron Gilboa rejoins InfoTrends after serving for nearly a decade in executive marketing roles for Eastman Kodak’s Commercial Imaging Group. He will assume the role as Director of the Functional and Industrial Printing Initiative at InfoTrends.

Twin Roles at Xerox Xerox announced it has appointed Kathryn Mikells as executive vice president and chief financial officer. She brings to Xerox extensive experience in financial management coupled with broad global business acumen in both services and technology.

www.iRecyclingTimes.com|Issue38

46 TECH ZONE

Mike Josiah

Dell 2130/2135 Toner Cartridge The Dell 2130CN cartridges are rated for 1000 or 2,500 pages, depending on the fill. The OEM numbers are 3301416 LY Black, 330-1436 HY Black; 330-1417 LY Cyan, 330-1437 HY Cyan; 330-1419 LY Magenta, 330-1433 HY Magenta; and 330-1418 LY Yellow, 330-1438 HY Yellow. The Dell 2135CN cartridges are also rated for 1000 or 2,500 pages, depending on the fill. The OEM numbers are 330-

1385 LY Black, 330-1389 HY Black; 310-1386 LY Cyan, 330-1390 HY Cyan; 330-1388 LY Magenta, 310-1392 HY Magenta; and 330-1387 LY Yellow, 330-1391 HY Yellow. Both cartridges have chips that must be replaced each cycle. NOTE: The 2130 and 2135 printers use similar cartridges but use different part numbers.