Brother has been reasonably quiet about defending its intellectual property rights. But in August, it filed a complaint with the U.S. International Trade Commission (USITC) against 32 companies and individuals that allegedly infringed its patents. By doing so, Brother joins Canon and Epson as companies fiercely fighting with Asian-based cartridge producers in 2019.
OEM patent infringement is a serious concern for those selling imaging supplies. And now OEMs want their business back.
More than ever, selling imaging supplies is a complicated business. Scams, inferior (even toxic) cartridges, shifting Asian supply sources, patent-infringing products and blatant anti-competitive OEM behavior make this a difficult time to sell printer cartridges. One bad move can herald the end of one’s business—or even one’s freedom.
So here are some rabbit holes and land mines to watch out for. But don’t despair just yet—there are safe options that can provide lucrative profits.
Intellectual Property Infringement
In the early 2000s, new-built cartridges from China started showing up and taking market share. North American cartridge remanufacturers, and their trade association the International Imaging Technology Council (int’l ITC), waited impatiently for Canon to protect its huge portfolio of intellectual property.
It took a number of years, but Canon finally sued over an internal gear, securing a general exclusion order from the USITC. But the party wasn’t over yet.
The Chinese companies and their U.S. subsidiaries responded by developing workarounds to the gear. Canon sued again, claiming these workarounds were also illegal. But a preliminary finding sided with the new-build manufacturers.
On May 31 of this year, Canon announced that it had appealed the ITC decision to the U.S. Federal Circuit Court of Appeals, which is one step below the U.S. Supreme Court. The Chinese companies are game for the fight, but Canon has money and plenty of procedural avenues available.
Another interesting suit that is still pending is Canon v. LD Products and V4Ink for infringement involving Canon’s new-build color cartridges. Canon sued LD based on LD’s sales of new-build compatible versions of HP CF210/211/212/213 color cartridges on March 20 in a U.S. District Court in California.
Will Canon continue its roll over the new-build invasion? Probably. However, it certainly has been picky about which patents it intends to enforce, given the tens of thousands of patents it has in its arsenal. Still, it’s easy to be an “innocent infringer” in today’s marketplace, so it’s never been more important to know your suppliers intimately.
Chips: Firmware Causing Printer Interruptions
Another OEM, HP, is using chip technology to control imaging-supplies use. Modern chip technology allows consumers to enjoy a host of features from their machines, while manufacturers use it to monitor their products’ performance and make improvements in subsequent generations.
However, chip technology can also be abused. When chips are used to monitor supply usage in printers, for example, they can become an impediment to product performance. In 1999, the first “killer” chip was introduced—chips in Lexmark printers shut off the printer when they detected that a remanufactured printer cartridge was in use.
The bundling of beneficial security technology in chips with printing functions appears initially to be a plus for consumers, but it sometimes has a sinister, convoluted impact. The chips have long been the target of aftermarket ire, and the dark side of similar technology bundling was at the core of legal battles between Microsoft and U.S. antitrust officials decades ago.
It’s easy to be an “innocent infringer” in today’s marketplace, so it’s never been more important to know your suppliers intimately.
Tricia Judge, International Imaging Technology Council
HP also employed chips, but its earlier models didn’t lock out competition. The company provided a variety of information to consumers that they appreciated, including gauges for toner levels, information on page count, etc. Aftermarket replacement chips didn’t provide this information, and the cartridges to which they were affixed were seen as less valuable because of the diminution in function. This gave HP a competitive edge but did not keep other brand cartridges from functioning.
These early chips were overcome when smart aftermarket companies such as Static Control developed replacement chips that disabled the “kill” feature and allowed for reuse. The market for aftermarket chips became robust.
The OEMs then added a new tool to their competitive arsenal: firmware. By downloading what is supposed to be an “upgrade,” consumers became complicit in changing legitimate chips into killer chips.
However, consumers and the aftermarket are now confronting a very blatant attack from HP with a new round of firmware that is as inscrutable as it is destructive. It is either a time bomb, waiting until the printer is in service for a time, or it automatically changes the firmware so it disables all aftermarket chips. Either way, it is insidious, as the competitive cartridge works for a while, but then is disabled. And the firmware affects a host of popular printers.
HP’s own internal documents and packaging alert the consumer that this scenario could happen: Dynamic security enabled printer. Only intended to be used with cartridges using an HP original chip. Cartridges using a non-HP chip may not work, and those that work today may not work in the future.
Anti-competitive statements such as these could serve as notice to the consumer: buyer beware. HP could argue it’s given consumers a notice that aftermarket cartridges might not work, and therefore any subsequent failures are to be expected, or perhaps not even actionable if the consumer becomes inconvenienced.
One thing is certain: it is deceptive. The notice is usually printed in small type, and the vast majority of consumers will buy without knowing about the potential for printer interruption. And once the firmware update is done, it can’t be undone—there is no way to uninstall this firmware.
In the future, there will be more litigation and more movement by OEMs into the use of firmware as a competitive weapon. HP, once heralded by the aftermarket for its non-interference with remanufacturing, has a new generation of aggressive managers and engineers at the helm.
HP wants its business back, and they intend to get it—through chip supply manipulation, firmware updates or selling its “white box” product at predatorily low prices. And consumers will certainly lose if all competition is put out of business and HP reclaims its marketplace and margins.
One solution: keep consumers away from firmware updates altogether. Educate them as to the insidious nature of the firmware’s purpose. You can also leave a reminder on their printer; download these stickers from the Int’l ITC’s website (www.i-itc.org).
Additionally, Int’l ITC is working with aftermarket litigators to monitor and act on this. Have a firmware horror story? I want to hear it. Please email me at tricia@i-itc.org, or go to our website at www.i-itc.org.
Cancer-Causing Cartridges: Health & Safety Issues of Foreign New-Build Cartridges
Toner cartridges are comprised of an OPC or drum and toner housed inside a heavy styrene plastic shell or core. European industry members, including the European Toner and Inkjet Remanufacturers Association (ETIRA), started testing the cores from several large Chinese manufacturers of new-built cartridges.
ETIRA’s report found large quantities of the flame retardant DecaBDE in the new-built cartridge bodies. DecaBDE is a known carcinogen so powerful, it’s banned in most European countries.
The largest commercial producers and suppliers of DecaBDE in the U.S. agreed to phase out use of the chemical by the end of 2013, yet still the EPA is proposing a ban of the substance. Here is language from the proposed rule:
“Decabromodiphenyl ether. DecaBDE (Chemical Abstracts Registry Service Number (CASRN) 1163-19-5) is a flame retardant that has been widely used in textiles, plastics, adhesives, and polyurethane foam. For DecaBDE, this proposal would prohibit the manufacture (including import), processing, and distribution in commerce of DecaBDE, and articles and products to which DecaBDE has been added…” The proposed rule has four exceptions that have nothing to do with imaging supplies.
In the electrophotographic process, internal elements of the cartridge reach 130–180°C, (266–356°F) heating the DecaBDE-laden cartridge and potentially releasing these carcinogenic chemicals into the office environment with every print.
Xerox and the other OEMs are wasting no time spreading the word. Xerox’s results found volatile organic compounds (VOCs) of DecaBDE up to 16,510 percent higher in new-builds. Subsequent reports undertaken by the Int’l ITC have found large quantities in some Asian new-build cartridges, while others have undertaken steps to alleviate the problem.
But what about the toner itself? It too is made of plastic.
Toner consists of pigment, plastic polymer, wax, charge control agents, bulk additives and surface additives. Low-cost cartridges, like the Asian new-builds, are like to employ low-cost raw materials, which are more likely to contain “impurities” that could have dramatic health and safety issues.
In addition, the smaller the size of the toner powder, the more fine the print is on the page. The OEMs have therefore driven down the particle size of toner in order to increase graphic quality and yield. Mean particle size can range from five to ten microns, but it can contain particles in sizes that are considerably below five microns and above ten microns.
The smaller the particle, the more hazardous it is. Once you get that small in size, respiration into the lungs is possible. Moreover, the additives used on toner, particularly the surface ones, are even smaller.
In toner cartridges, the toner is heated to a melting point during fusing, when the print is laid down on the page. At that point, the cartridge and its contents are heated to 356°F, and much of these “impurities” can become airborne.
But the problem doesn’t end with the cores and toners. There are many internal components that may containing toxins, and plenty of Asian-based suppliers looking to shave a few pennies off them by using tainted materials.
There are legitimate Chinese manufacturers that have taken steps to address the issues regarding contamination. However, in today’s volatile Chinese imaging-supplies marketplace, companies are changing hands and being traded at a rapid rate. Yesterday’s environmental superstar could become tomorrow’s polluter when the company has to cut costs. That’s how DecaBDE ended up in the plastic in the first place.
Safe Options Are Available
Remanufactured versions of these cartridges remain the safe, legal alternative, thanks to the right to repair. The right-to-repair doctrine has long protected remanufactured cartridges from claims of patent infringement—just as consumers have a right to repair their cars, they can also repair their cartridges. The issue was settled in the mid 1990s and 2000s in a variety of U.S. lawsuits.
OEMs have hundreds of patents at their disposal covering nearly every cartridge they offer. Canon in particular has a huge patent portfolio that it recently started protecting aggressively through litigation, and this has now affected some of HP’s products. It is all but impossible for a new-build manufacturer to successfully work around all those patents.
The remanufactured cartridge is based on the reuse of the OEM core, so the health and safety issues discussed herein do not apply. In addition to being potentially toxic, new-build molds use inferior grade plastics that don’t have the durability or integrity of OEM plastics.
Beyond the cartridge shell, there are important technologies the domestic market took decades to command, and then there are the chips and other highly technical components. A cartridge costing $3 can’t address these issues with the requisite quality, nor can it have all the vetting necessary to be free of all intellectual-property concerns.
Finally, customers are becoming ever more environmentally conscious. Remanufacturers reuse 27 million pounds (12.3 million kgs) of industrial grade plastic reused, and conserve 73 million quarts of oil (69.5 million liters). Clover Imaging Group alone reclaims more than 21 million ink and toner cartridges each year
Reman Day has taken off under the direction of the Remanufacturing Industries Commission, representing remanufacturers from John Deere and Caterpillar to 73,000 small auto and cartridge remanufacturers. This year’s events encompassed nearly 200 locations, spanning 21 countries on all six inhabited continents. All 12 of the recognized sectors of remanufacturing were involved, and a resolution from the U.S. House of Representatives and Proclamations from State and Local government officials were signed, recognizing remanufactured products as preferable.
Finally, there is President Donald Trump’s trade war with China. Trump has continued to implement tariffs on more and more Chinese products, and cartridges could be among them.
Selling imaging supplies shouldn’t be this complicated, but it is. As a dealer, look to the Int’l ITC to keep you apprised of ways to stay safe in your sales.
