Lexmark US case ruling will have industry impact

April 16, 2015

The case between Lexmark and US remanufacturer Impression Products moved to a panel hearing in the US Court of Appeals for the Federal Circuit, with the eventual 2000px-US-CourtOfAppeals-FederalCircuit-Seal.svgruling set to significantly affect the US remanufacturing industry.

The legal case began when Impression Products was named in an IP infringement case in October 2013 in the US District Court Southern District of Ohio (Cincinnati Division). The case referred to the “unlawful importation […] the sale for importation and/or the sale within the United States after importation” of a number of infringing remanufactured and cloned aftermarket cartridges.

Impression’s legal team moved to dismiss claims as well as overturn the Jazz Photo decision that impacts on patent exhaustion, or the “first-sale doctrine”. This was also influenced by the Supreme Court’s ruling in the Kirtsaeng case in 2013, which prevented copyright owners from stopping imports and reselling content sold abroad.

Impression’s case with Lexmark went to the appeals circuit, with Lexmark opposing a ruling that it had exhausted patent rights in its Prebate programme. Impression Products meanwhile wished to overturn a ruling that it had infringed Lexmark’s patents relating to remanufactured cartridges that used empties from outside the USA.

Now, Patently-O has featured a piece written by Dennis Crouch, Law Professor at the University of Missouri School of Law, which outlines the implications. The case is heading for an en banc hearing, which means that a full panel of judges will decide whether to overturn either Jazz Photo or Mallinckrodt, another decision addressing an “unrestricted first sale”.

Impression argued that Lexmark’s overseas sales “precluded” it from suing for infringement of US patents if the cartridges were “imported, remanufactured or resold” in the USA, acknowledging that this contradicts Jazz Photo which holds “a foreign sale does not exhaust US patent rights”. However, it believes that Jazz Photo had been “implicitly overruled” by the Kirtsaeng decision, with the District Court disagreeing.

What Impression Products is seeking is for both rulings to be overturned, as the removal of Jazz Photo would mean companies selling remanufactured cartridges in the USA could use empties from across the world, rather than needing to prove first-use in the USA. The removal of Mallinckrodt would mean Lexmark would have exhausted patent rights in the Prebate cartridge return programme – the centre of cases between it and Static Control.

This would mean that while Lexmark disagreed with the previous rulings in its cases with Static Control, a Federal Circuit decision would be legally binding. However, if Lexmark was to win the case then Jazz Photo would remain with little change to the present situation, but if Mallinckrodt remained in law, then Lexmark may have more options to file IP infringement suits pertaining to Prebate cartridges.

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Lexmark launches new branding

April 7, 2015

Lexmark new logoThe OEM’s new feature image “reflects both the evolution of the company as well as its vision for the future,” it has said.

The MPS provider stated that its rebranding shows “its successful and ongoing transition to a company well beyond its hardware heritage” as it “evokes the clarity, value and durability of the traditional Lexmark diamond, evolving to an aperture, which represents the broader offering – a portal to insight, a means of focus”.

It continued: “The green palette is fresh, vibrant and approachable, representing Lexmark’s strength, focus on sustainability and growth as well as our commitment to earning “customers for life.”

Lexmark has also issued a new tagline: “Open the possibilities”, which it claims “invites customers to engage with Lexmark to open up greater opportunities for success with our broader technology and solutions portfolio”.

Chairman and CEO Paul Rooke said: “This new brand and logo reflect our enthusiasm and focus on connecting our customers’ information silos and automating business processes.

“Our brand transformation better represents where the company is today and our vision for the future.”



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Lexmark reveals quarterly and yearly results

January 29, 2015

Tlexmark-logohe OEM saw revenue grow seven percent in the quarter, while the year saw growth overall.

The results saw Lexmark report that revenue growth “exceeded” expectations that it had outlined in October 2014, with revenue (excluding its exit from inkjet) growing by seven percent in the quarter, the seventh “consecutive quarter of growth”. In turn, the MPS and Perceptive Software revenue exceeded $1.134 billion (€1.005 billion) in the year, while cash flow was $153 million (€135 million) in the quarter and $282 million (€250 million) in the year.

In the quarter, the OEM’s Higher Value Solutions revenue – consisting of MPS and Perceptive Software – saw revenue of $341 million (€302 million), a growth of 22 percent year-on-year and a 33 percent share of total revenue, up from 28 percent share in 2013. For the financial year, the sector saw revenue of $1.134 billion, a growth of 18 percent year-over-year and a share of 30 percent of the revenue, increased from 26 percent in 2013.

The Imaging Solutions and Services (ISS) sector saw $933 million (€827 million) in revenue in the fourth quarter, a decline of less than one percent, and revenue excluding that from the inkjet exit grew four percent. For the year, the ISS segment saw revenue of $3.415 billion (€3.028 billion), again a decline of less than one percent, while revenue excluding the inkjet exit again grew four percent.

MPS revenue grew by 16 percent in the quarter to $242 million (€214 million), and 14 percent for the year to $821 million (€727 million), while non-MPS revenue for the quarter was “flat” at $633 million (€561 million) and grew one percent for the year to $2.337 billion (€2.072 billion). Revenue from the inkjet exit declined in the quarter by 42 percent to $58 million (€51 million), and fell 37 percent for the year to $257 million (€227 million), and lastly, Perceptive Software revenue in the quarter was $90 million (€79 million), excluding acquisitions, a growth of 37 percent, while it was $296 million (€262 million) for the year, a growth of 31 percent.

In terms of products, hardware revenue for the quarter grew three percent to $236 million (€209 million), and three percent for the year to $782 million (€693 million). Supplies revenue fell two percent in the quarter to $646 million (€572 million), and the same percentage for the year to $2.446 billion (€2.168 billion), while laser supplies revenue grew five percent in the quarter to $589 million (€522 million) and five percent for the year to $2.189 billion (€1.940 billion).

Paul Rooke, Chairman and CEO of Lexmark, stated: “In the fourth quarter, Lexmark delivered revenue growth that exceeded October guidance. For the year, Lexmark’s Managed Print Services and Perceptive Software combined revenue exceeded $1.1 billion, grew 18 percent and increased to 30 percent of Lexmark’s total revenue.

“These results reflect Lexmark’s ongoing transformation to a higher value portfolio of imaging and software solutions that enable customers to manage their unstructured information challenges. Approximately 70 percent of Lexmark’s revenue comes from our more predictable imaging and software annuity streams.

“2014 marks our 13th consecutive year of positive free cash flow, which fuels Lexmark’s disciplined capital allocation framework of building and growing our solutions business while concurrently rewarding shareholders through the ongoing return of capital.”

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Lexmark applies for significant patents in Europe

December 24, 2014

An image from Lexmark's application EP 2 798 405 A1

An image from Lexmark’s application EP 2 798 405 A1

The OEM has registered five applications that, together, may be highly relevant for remanufacturers in Europe that remanufacture the 501 cartridge.

The five documents – EP 2 798 405 A1, EP 2 798 407 A1, EP 2 798 408 A2, EP 2 798 409 A2 and EP 2 798 411 A2 – are related to the 501 cartridge, and claim priority dates of 30 December 2011. The five documents can be seen to be attempting to protect the connecting and positioning elements that interact with the printer, and as such, if granted, could be very relevant to the industry.

The first of these documents  – EP 2 798 405 A1 – refers to a toner cartridges with a “pressure equalisation system” for equalising pressure between the reservoir and a “toner sump developer unit”, with the flow of toner from the cartridge to the developer covered. The second meanwhile –  EP 2 798 405 A1 – concerns the “toner delivery system” for a “shake-free” toner cartridge, and details the scraper and its operation, as well as – again – the flow of toner between the different areas of the cartridge.

The third – EP 2 798 408 A2 – discusses the guides on the cartridge – the “legs” – that connect it to the printer, and covers the different outer constructions that allow this. The fourth document – EP 2 798 409 A2 – again covers the shutter “positioned at the exit port” of the cartridge, and its opening and interlocking with other areas of the cartridge, while the fifth – EP 2 798 411 A2 – concerns the “toner delivery system” and slots and openings that allow for the toner to flow between the cartridge and hopper.

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Lexmark granted potentially significant EU patent

October 29, 2014

An image from the granted Lexmark patent

An image from the granted Lexmark patent

The patent refers to a “skiving seal” in a toner cartridge, which might affect toner remanufacturers.

Lexmark’s granted patent, EP 2 577 403 B1, generally focuses on a toner container system for a toner cartridge, making reference to the “reservoir for containing toner”, the “rotatable member positioned within” an opening in the reservoir, and most significantly a “skiving seal”.

This seal is set out in the document as being made “for blocking toner from entering a gap between the opening and the rotatable member”, and is positioned “along the length of the rotatable member”. The seal itself is made of a flexible sheet with “a surface and a length corresponding to the length of the gap” in the reservoir.

A tubular portion “adjacent” to the gap is formed to create the seal, with the sheet folded over itself, and the patent therefore is significant to toner remanufacturers because when replacing the seal during the remanufacturing of the cartridge covered by the patent, remanufacturers might be undertaking what can be seen in the document as a manufacturing aspect of the patent, which only Lexmark could undertake legally.

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Lexmark reports revenue growth in third quarter

October 22, 2014

lexmark-logoThe OEM saw a three percent growth, which “exceeded” its predictions.

The results showed revenue growth of three percent, revenue excluding Lexmark’s exit from inkjet in 2012 growing six percent, and MPS and Perceptive Software combined revenue increasing by 21 percent.

GAAP (generally accepted accounting principles) revenue was $918 million (€723 million), whilst non-GAAP revenue was $921 million (€725 million), giving the growth of three percent, and “excluding the planned and ongoing decline in inkjet exit revenue”, this growth is six percent”.

In terms of the company’s Imaging Solutions and Services (ISS) segment, revenue “was about flat” compared to the same quarter last year, at $835 million (€657 million), but without the inkjet exit revenue, it grew three percent compared to last year; MPS grew 12 percent to $205 million (€161 million), non-MPS revenue was flat at $570 million (€55 million), and inkjet exit revenue of $60 million (€47 million), which was six percent of total revenue, declined by 29 percent.

Product-wise, hardware revenue grew eight percent to $196 million (€154 million), whilst supplies declined two percent to $593 million (€467 million), and laser supplies revenue grew two percent to $533 million (€419 million). As previously mentioned, the MPS and Perceptive Software revenue – packaged as Lexmark’s “higher value solutions”, is expected to pass $1 billion (€787 million) this year, with combined revenue of $291 million (€229 million) showing a growth of 20 percent over last year, accounting for 32 percent of total revenue.

Lexmark’s predictions looking forward include an expectation that total revenue in the fourth quarter of the financial year would be “down two to four percent”, with the inkjet exit continuing to “have a diminishing negative impact on revenue growth”, though excluding this, the OEM believes revenue in the next quarter will “grow year to year”.

Paul Rooke, Lexmark’s Chairman and CEO, commented: “In the third quarter, Managed Print Services and Perceptive Software combined revenue grew 20 percent, representing nearly one third of Lexmark’s total revenue, and is on track to exceed $1 billion this year. Our strong results reflect the work we have been doing to transform Lexmark to a solutions company, creating a unique portfolio of higher value imaging and software solutions.”

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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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Lexmark announces Corporate Cartridges line

October 17, 2014

Lexmark CS310n

Lexmark CS310n

New line of toner cartridges for EMEA region designed to boost sustainability in businesses.

IT Web reported on Lexmark’s release of its new line of Corporate Cartridges designed for businesses in the EMEA region, with the toner cartridges compatible with Lexmark’s A4 CS/CX colour and MS/MX monochrome devices.

The OEM stated that the products are “driven” by the company’s “commitment to corporate social responsibility and guided by the principles of zero waste and the circular economy”, using Unison toner and “advanc[ing] the sustainability benefits of the Unison Print System” through the use of components recovered by the Lexmark Cartridge Collection Program (LCCP). They also have a “robust and durable design to deliver long-term reliability and sustained print quality”.

In order to ensure “consistent product availability” as well as minimise the environmental impact of supply chains, the cartridges are manufactured in the EU, with pricing “equivalent” to the OEM’s Return Program cartridges.

Mark Hiller, Lexmark Regional General Manager South Africa, said: “Lexmark has a strong tradition of innovation and commitment to corporate social responsibility and sustainability. This new line of corporate cartridges represents our most sustainable supplies offering to date. In addition to the environmental and social aspects, the cartridges are also backed by Lexmark’s limited lifetime supplies warranty.”

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Lexmark releases printer series for SMEs

September 22, 2014

Lexmark MS415dn

Lexmark MS415dn

MS310 and MS410 series offer “enterprise-style features” for small and medium-sized businesses in Australia.

IT Wire reported that the newly released mono laser printers from Lexmark have been designed for SMEs as well as workgroups within larger organisations; offering features such as remote printing through iOS and Android devices via AirPrint or Lexmark’s print app, duplex printing, optional Wi-Fi, and a paper capacity of 850 sheets, plus an optional second tray.

Marty Canning, Executive Vice President and President of Imaging Solutions and Services at Lexmark, said: “Small business needs the same speed, reliability and usability found in enterprise-level printers […] the Lexmark MS310 and MS410 series offer unexpected features such as confidential print, network security and remote manageability that are designed to keep small business on the leading edge of print technology.”

The two printers available in Australia are the MS312dn, which has print speeds of 33ppm and is priced at AUS$299 (US$265/€207), and the MS415dn, which can print at speeds of up to 38ppm, as well as having a colour display panel, and is priced at AUS$599 (US$532/€414).

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Lexmark launches new printers in South Africa

September 2, 2014

The OEM launched the MS310 and MS410 series, aimed at SMEs.Lexmark MS310

ITWeb reported on the launch of the ranges by Lexmark, with the OEM stating that the devices “deliver superior performance, security [and] value for enterprises [and] SMEs”. The machines feature automatic duplexing, colour LCD displays, wireless printing and a host of other offerings.

Among the other features of the machines, which include the MS312dn and MS415dn, is added security – through Lexmark’s “confidential print feature” – alongside mobile printing compatibility via the OEM’s Mobile Printing App, energy-saving modes, andremote management allowing control of printers “from any browser when network-connected”.

An “aftermarket” cartridge with a yield of 5,000 pages is also available for both machines, with Lexmark stating that the cartridge is “one of the most sought-after cartridges for the segment and will continue to reinforce Lexmark’s strong position in the SME segment”. The MS312dn and MS415dn are available for R2,695 ($252/€191) and R4,045 ($378/€288) respectively.

Marty Canning, Lexmark’s Executive Vice-President and President of Imaging Solutions and Services, stated: “Small businesses need the same speed, reliability and usability found in enterprise-level printers. The Lexmark MS310 and MS410 series offer unexpected features such as confidential print, network security and remote manageability that are designed to keep small businesses on the leading edge of print technology.”

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