False advertising case’s implications discussed

October 20, 2014

The case between Static Control and Lexmark continues to have an affect on the legal landscape in the USA.supremecourtseal copy

MetroCorpCounsel interviewed two US lawyers about the legislation concerning false advertising, including the “recent developments” in a number of cases including between Static Control and Lexmark, in which Static Control won the right to sue the OEM in March earlier this year.

The site interviewed Danielle DeFilippis and Ami Bhatt, Associates at Norris, McLaughlin & Marcus, about the case and a number of others that impact upon false advertising law. DeFilippis stated that the Supreme Court “articulated a new test to determine whether a claimant has standing to bring a Lanham Act claim” for false advertising, which The Recycler reported on in April this year.

The new format allows for a two-step inquiry into whether a “claimant has standing” to bring a false advertising case: a zone of interests test, and a proximate cause analysis; the former of which covers those who “allege an injury to a commercial interest in reputation or sales”, and the latter demanding a party “must show economic or reputational injury flowing directly from the deception wrought by the defendant’s advertising”.

DeFilippis added that the ruling in the Static Control-Lexmark case “can have the effect of limiting or increasing suits”, depending on the “jurisdiction and the test previously employed”, and noted that there has been “significant case law interpreting and applying the test since the decision was made”, but “whether litigation will increase or decrease across the nation remains to be seen […] it will be interesting to see how courts analyse the level of proof needed to ‘allege’ proximate cause”.

Bhatt also mentioned that the case, along with a number of others involving companies such as Coca-Cola, has meant that “false or misleading advertising will continue to face scrutiny from competitors or from regulatory bodies”, and that companies “should take care in crafting promotional materials, whether in print, on packaging, or online, to ensure that the information presented is accurate and within the bounds of the law”.

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Canon granted relevant EU patent

October 16, 2014

Canon's granted patent, EP 1 184 742 B1

Canon’s granted patent, EP 1 184 742 B1

The patent concerns a “removably mountable” supply container, with implications for remanufacturers and compatible manufacturers.

The patent – EP 1 184 742 B1 – was filed in 2001, meaning that it has taken 13 years to be granted, and this document holds relevance for the industry. It refers to an “image forming apparatus and developer supply container removably mountable in [the] image forming apparatus” – with the document going into detail about the cover on the container being “moveable between a first and a second position”.

The document goes on to define specifically the importance of the cover to the printer, as it covers a “developer discharging portion”, and moves between covering this and not covering it – allowing for the flow of the developer onto the media. It adds that with regard to the cartridge, which is “detachably mountable”, the cover moves from one position to another, with the second position “above the first position and […] further from said process cartridge than the first position”.

The supply container is mounted to the printer “along an axis” of the image bearing member, and all of this together means that any company attempting to remanufacture the cartridge or produce a compatible has to regard the cover’s connection to the device – and its relation with the cartridge and developer discharging portion, with the entire unit working together and patented together.

The Recycler reported on significant Canon patents applied for and granted in June earlier this year, with ETIRA announcing it would investigate another Canon patent registered towards the start of 2014.

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Xerox speaks on multi-brand cartridges in India

October 15, 2014

One of Xerox's multi-brand toner cartridges

One of Xerox’s multi-brand toner cartridges

The OEM spoke about toner cartridges it’s made for use in HP and Canon machines.

Deccan Chronicle interviewed Xerox India’s Balaji Rajagopalan, Executive Director for Technology, Channels and International Distributor Operations, about the OEM’s partnership with Flipkart to produce multi-branded toner cartridges for use in HP and Canon machines, the launch of which The Recycler reported on earlier this year.

The cartridges, branded as Xerox products, are “specifically designed and catered for HP and Canon printers”, with Xerox stating that they are “designed to take on the toner refilling market and make replacing laser toner cartridges as cheap as refilled ones”. Rajagopalan responded to the site’s question about support from other manufacturers by noting that “what typically happens in the marketplace is we start competing with others, so it is not a question of promoting.

“Obviously, our competition will have their own cartridges and they will promote use of the same for their devices. What we are offering now is Xerox branded cartridges that are manufactured to the exacting quality and standards that Xerox is known for. It is completely legal and it is not just any third party who is marketing these, these carry the Xerox brand and these have been made for use in HP and Canon printers.

“This brings in the confidence of quality and what really matters in the cartridges is the quality, reliability and yield and we make sure that the yield is as good and matches the quality produced as OEM’s cartridges”. Adding that the other OEMs do not mind these products being produced by Xerox, he said in response to whether these other OEMs are “recommending” the cartridges that “obviously, we will continue to compete. I will push my cartridges and HP will push theirs”.

In terms of warranty and damage, Rajagopalan commented that “in most cases the use of an alternate consumable brand does not impact the warranty of the product”, and that “given the quality of the product and rigorous testing it has been subjected to”, users will “have a smooth experience”.

Asked about refilling, he commented that “we do not promote refilling, and we have an awareness and education programme for our customers, [talking] to them about using original cartridges and avoid[ing] refilling”. Xerox also “do[es] not have any such [recycling or remanufacturing] programme in India, though “this is something we would like to get into, but nothing is decided as of now”.

Finally, Rajagopalan noted that Xerox is “not going there” in regards to producing Epson-compatible cartridges, though the programme “will be extended further in the coming months” across India.

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German production falls four percent

October 13, 2014

manufacturingIndustrial production and manufacturing saw their highest falls since 2009.

Bloomberg reported that German industrial production fell by “more than economists forecast” in August, the biggest drop since 2009, noting that this was “the latest sign that the outlook for Europe’s largest economy is deteriorating”.

Production fell four percent from July, where it had grown by 1.6 percent, and Bloomberg stated the German economy is “losing momentum” due to confidence issues surrounding “sluggish growth in the euro area” and “political tension with Russia”. Weak data relating to the economy has reportedly “raised the spectre of recession” in the country, adding to a fall in factory orders of 5.7 percent in August and a fall in manufacturing, with orders “falling at the fastest pace since 2012”.

Output of investment goods fell by 8.8 percent, and of intermediate goods by 1.9 percent, with consumer-goods production down by 0.4 percent and construction by two percent. In turn, business confidence fell to its lowest in “almost one and a half years”, whilst unemployment increased for the second month in a row.

Andreas Rees, Chief German Economist at UniCredit MIB in Munich, commented: “[While] the setback in industrial production in August was a massive one, [there is] no reason to panic. German industrial activity will soften in coming months, as already indicated by business sentiment, but not tumble into the abyss. And no, there is no reason to dig up the R-word again.”

In turn, Ralph Solveen, Head of Economic Research at Commerzbank AG in Frankurt, added: “The German economy will develop rather weakly in the second half of this year. And in light of the weak trend in orders, we would not expect a great deal for the final quarter of this year.” Solveen also forecast that third-quarter GDP (Gross Domestic Product) will “be little changed”.

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Tuico to exit aftermarket cleaning blade business?

October 10, 2014

Tuico, one of the leading providers of cleaning blades to the remanufacturing industry, is planning to withdraw from the remanufacturing market at the end of October.tuico logo

In what is a major surprise to the remanufacturing industry and other parts manufacturers, Tuico will no longer be offering cleaning blades to the remanufacturing market after October 2014. Tuico was founded in 1961, and today produces laser printer cleaning blades, squeegees for screen printing, O-Rings, oil seals, gaskets and other custom-moulded rubber parts from three factories in Vietnam and one factory in China, which employ around 1,100 people.

According to a person familiar with the remanufacturing parts market, the sector has been very competitive for some time, with a drop in demand and strong price and foreign exchange pressures all impacting on the market. A Tuico customer confirmed that they had been advised of Tuico’s withdrawal from the industry, and were saddened to see such a high quality producer leave the market.

A Tuico competitor commented that “they are like gentlemen leaving the noisy pub”, whilst Teamsung, another manufacturer of blades and rollers, stated of companies leaving the parts market: “We think it is a good thing, because that means the rest of [the] companies can do good quality parts. The parts market can reduce most [of the] price competition, [and] it also help us to produce better and better blades.”

Tuico has yet to officially comment on its withdrawal from the laser printer parts market, but this follows on from LG Chem’s decision to cease toner production, and Pelikan is consulting about the future of its toner plant in Switzerland, as well as its other plants in Scotland and China.

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Pelikan may close more printer consumable plants

October 9, 2014

Malaysian market analyst claims company is “aiming to dispose of or downsize its printer consumable business in the near term”.

Pelikan Hardcopy's base in Wetzkion (Credit: David Kunding, AVU)

Pelikan Hardcopy’s base in Wetzkion (Credit: David Kunding, AVU)

The Star reported on Kenanga Research’s Analyst Soong Wei Siang’s perspectives on Pelikan International’s earnings growth, with Soong stating his belief that “the group is […] aiming to dispose of or downsize its printer consumable business in the near term”, with plants in “Switzerland, China and Scotland being lined up for disposal or closure”.

The Recycler reported earlier this week on the company’s plans to possibly close its toner factory in Monchaltorf, Switzerland, with “negative currency developments and changing market conditions” possibly forcing it to close the site, as well as the “loss-making development of toner powder” and the “overcapacity” of the toner production market.

Soong’s perspective on the company comes as part of speculation on its earnings growth, which is set to be “underpinned” by Pelikan’s restructuring, and which The Recycler reported on earlier this year. Pelikan’s board accepted the company’s proposal to integrate its subsidiaries into Herlitz AG, which The Star notes “will hold key European and Latin American sales units”.

The analyst’s report suggested Pelikan proposed to “inject its core stationery sales and distribution assets” into Herlitz, raising RM462 million ($142.4 million/€111.6 million) through “offer for sale and private placement of new shares” by Herlitz, thereby “unlock[ing] the value of Pelikan’s assets while strengthening its balance sheet”.

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HP EMEA spokesman interviewed about clones and remanufacturing

October 7, 2014

HP's Leobert Faessler

HP’s Leobert Faessler

Leobert Faessler told Digital Imaging that “not all clone cartridges are necessarily patent infringing”; there is “no cooperation” with remanufacturers due to “competition law”; and that the company “does not develop ‘killer chips’”.

Digital Imaging interviewed Faessler, HP EMEA’s Marketing Programme Manager, in its 5-2014 issue, and questioned him on a wide range of topics corresponding to clone cartridges, OEM patent infringement cases, cooperation with the aftermarket, so-called “killer chips” and MPS, whilst Faessler also shed light on how HP and Canon communicate regarding IP cases.

He states that “there is an exchange” between the two OEMs, whereby information is traded, but “on competition grounds, we should not work more closely together on this issue”, and he noted that “we obtained the information about the two patent lawsuits [against KMP and wta in May] on the same day as the press”.

One interesting response to Digital Imaging’s questions about clone cartridges “flood[ing]” the European market saw Faessler state that “not all clone cartridges are necessarily patent infringing. Currently, there is a high probability that a one-to-one new-built (or clone) cartridges might infringe patents”.

He said that HP “regret[s] it explicitly” that more has not been done to stop the flow of clones to Europe, though “not everything that a printer manufacturer undertakes, he also does publicly. Attempts are often made between parties to achieve an amicable settlement. The aim is not to pillory someone”. On the subject of cooperation and working with ETIRA against clones, Faessler states that “there is a regular exchange, but no cooperation”, as “that would also be problematic from the perspective of competition law”.

Questioned further on HP patents being designed to catch infringers, he stated that “we do not build replica hurdles in our supplies” to catch out remanufacturers, extending this point by noting that “our smart chips serve only one purpose: the interplay with the printer through precise level indication, to enable and improve the print result. HP does not develop “killer chips”, as some have falsely claimed”.

Faessler noted that HP is concerned “that the remanufacturing industry might get broken, because we much more appreciate a fair competitor rather than anyone selling clones from Asia”, but denies that HP has anything to do with patenting the remanufacturing process, because “we do not even remanufacture […] such process patents are currently not a topic”.

On MPS, Faessler states that “one cannot impose its business model on a customer”, and “traders want satisfied customers”, with “indirect costs such as the hardware service […] not to be underestimated, because original HP cartridges have demonstrably less technical disturbances as remanufactured products”.

Pressed on the technical tests he mentions, Faessler says HP interviewed service technicians about their experiences “with original HP compared to non-HP cartridges”, with the study finding non-HP cartridges “led to significantly more service call leads”, and also “frequently demand replacement of the parts of the printer that wear out”.

As a final point, he states that HP’s perspective on reuse is that “the raw materials of empty cartridges should be used for other products”, supporting this with a­nother study – this time on life-cycle assessment – which “clearly showed that the CO2 footprint of remanufactured cartridges was worse on average by 11 percent as for HP cartridges”.

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US investors pledge $42 billion to India

October 6, 2014

PM Modi

PM Modi

Indian Prime Minister Narendra Modi’s visit to the US results in investment pledge as India aims to become a manufacturing hub.

The Times of India reported that Modi met with President Obama at the White House and spoke to 11 US business leaders during his visit five-day to the US; with a survey conducted by the US-India Business Council (USIBC) after his visit finding that around $42 billion (€33.5 billion) worth of investment could be committed to India over the next three years.

This figure was based on the responses of just 20 percent of the members surveyed, with India Today noting that if the rest of the USIBC’s members and top US businesses had been surveyed “the figure would have exceeded $100 billion (€79.7 billion)”.

An official source reportedly stated that US investors were impressed by Modi “because of the kind of majority he has had in parliament, and also his ability to get things done based on Gujarat model”, adding that he “commanded a lot of respect among prospective US investors and this has done wonders for the global investor sentiment”.

In addition, investors were reportedly encouraged by Modi’s knowledge of the “nuts and bolts” of business; while his assurances that the Indian government plans to remove red tape and make the business environment easier “also helped” due to doubt over taxes and difficulties in setting up business in India. As a result, the business leaders who spoke with Modi were “all very positively inclined and committed to raising the investment portfolio in India”.

India Todaystated that the Indo-US Investment Initiative will be “led by India’s finance ministry and the US Department of Treasury”, focusing on “raising investment by institutional investors and corporate entities primarily by facilitating individual investment proposals and projects”. It will involve the setting up of a “single-point problem resolution and facilitation arrangement for ensuring that prospective investments do not face unnecessary hurdles and actually materialise” and will particularly focus on “capital market development and financing infrastructure”.

The Federation of Indian Chambers of Commerce and Industry (FICCI) has “welcomed the development”, which is expected to be a “harbinger” of transformative projects that would be launched by the private sector from both sides and would contribute to realising Modi’s vision for manufacturing excellence”.

The announcement follows Modi’s unveiling of the Indian government’s new ‘Make in India’ campaign on 25 September, which aims to transform India into a global manufacturing hub by encouraging foreign businesses to invest in the country. You will be able to read more about ‘Make in India’ and how it could affect the country’s remanufacturing industry in a future issue of The Recycler.

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Pelikan may close toner factory as shares sold

October 6, 2014

Pelikan Hardcopy's base in Wetzkion (Credit: David Kunding, AVU)

Pelikan Hardcopy’s base in Wetzkion (Credit: David Kunding, AVU)

The stationer’s toner powder factory in Switzerland may close, as the parent company sells 25 million shares to Singapore-based investors.

AVU (German) reported on the proposed closure of Pelikan Hardcopy’s Monchaltorf toner powder plant in Switzerland, stating that “negative currency developments and changing market conditions” may force the company to close the site, as well as the “loss-making development of toner powder” and the “overcapacity” of the toner production market.

The company said in a statement that “negative currency effects” led to a collapse of the company’s toner powder business, and it noted that it is looking to “check the transferability of toner powder production”. The plant in Monchaltorf currently provides toner for the refilling and remanufacturing industry in Europe.

In other news, Asia One reported that Singapore-based investor group Caprice Capital International has purchased 25 million shares in Pelikan International in an “off-market trade”, with the purchase amounting to around 4.5 percent of the company’s share base, with each share worth RM 1.13 ($0.34/€0.27).

The investors have been investing in Pelikan since mid-August last year, with Asia One noting that this had begun after Pelikan’s share price “had suffered selling pressure and dipped to a low of 33.5 sen ($0.10/€0.08) per share” after its proposed share-swap deal with China Stationery Ltd. fell apart; whilst Pelikan’s share price has risen in the last week by 13.7 percent to RM 1.33 ($0.40/€0.32).

The site added that Caprice Capital made the investment because it has “sought out other undervalued companies to invest in in the past”, and is “attracted” to the company’s plan to embark on corporate restructuring, which The Recycler previously reported on.

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UK WEEE compliance fee proposal submitted

October 1, 2014

ewasteJoint Trade Association (JTA) submits proposal to Department of Business Innovation and Skills (BIS) to operate WEEE compliance fee mechanism.

The JTA, a group of nine trade associations in the electrotechnical sector, announced that it has submitted a “comprehensive” proposal to the BIS for a WEEE compliance fee mechanism for the 2014 compliance period, after the BIS invited interested parties to submit proposals in accordance with the 2013 WEEE regulations.

The compliance fee acts as an alternative way of complying should a Producer Compliance Scheme (PCS) not obtain sufficient evidence to meet its producers’ recycling obligations; with the BIS holding a public consultation after which it may approve a methodology for the calculation of a compliance fee and the appointment of a third party to oversee the administration of that fee.

JTA stated that its proposal consists of a “clear and simple to operate” fee calculation methodology, based on “rigorous analysis” from a leading economics consultancy group in the UK. It also includes the appointment of a top 10 UK accountancy firm to be the independent system administrator; responsible for the receipt and distribution of funds and the handling of all confidential information, as well as a “streamlined and uncomplicated” process for Local Authorities to apply for funds, based on the requests and suggestions they have made to the JTA.

Richard Hughes, Chairman of the JTA and Technical Manager at the Association of Manufacturers of Domestic Appliances, said: “The compliance fee is an important element of the new WEEE system.  It acts as a safety valve, ensuring that where a PCS has not fully met its target through collections during the compliance period, it has a legitimate alternative route to compliance.

“The methodology proposed by the JTA increases the compliance fee the further a PCS is from its target.  This is designed to ensure collection of WEEE is encouraged as the main route to compliance and creates a fair, balanced market.”

Meanwhile Simon Eves, Deputy Chairman of the JTA, Chairman of the Environment Strategy Council at techUK and Head of Environmental Affairs at Panasonic UK, commented: “The government published clear guidance and evaluation criteria for organisations wishing to submit compliance fee proposals. JTA members have worked hard to deliver a clear, effective and complete system proposal which closely matches with those criteria.  We look forward to it being published, along with any other submissions made, when BIS launches its public consultation on this subject later this year”.

The government has indicated that the latest a final decision would be announced by the BIS is mid-February 2015.

The Recycler reported last year on the government’s decision to propose changes to the UK’s WEEE legislation, with JTA supporting the changes following a public consultation, which found that the majority of respondents favoured changes to the WEEE system.

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