September 30, 2016
The article, called Blot on the landscape, addresses the recent issues and global fallout from the HP Inc firmware update, with the piece giving a short summary about the update, how it affected consumers and HP Inc’s reasoning. The magazine notes that “though its printers business remains profitable, revenues fell by 14 percent in the year to July”, and while paperless offices “take most of the blame”, with printer shipments down “by a fifth since 2007”, rivals in the market “squeeze margins”, non-original cartridges making up 26 percent of the trade in the EMEA and 16 percent in North America.
The article also highlights clones, which are “dirt-cheap” and have “spread over the past decade”, and while the firmware update “obstruct[ed] fales, which do break copyright law”, it also affected “lawful businesses”, with Promax’ Tim Parsons stating that it is “also quite legal for so-called ‘private label’ companies to pull HP ink cartridges apart and create new versions that are compatible with HP printers”, with quality “easily” matching the original and costing “a quarter as much”.
For OEMs, printer cartridges “are highly profitable products”, and the magazine noted that they have “long attempted to wipe out these bargain-basement rivals”, using “smart chips” in cartridges to “make them harder to copy or refill”. The Economist referred to the Lexmark-Static Control legal battle, and how Lexmark “lost” the case because the court “defended the right of Static Control to make parts that ‘interoperate’ with the goods of another manufacturer”.
Firmware updates have thus become “another common way to repel rivals, with HP Inc’s recent update “stand[ing] out”, according to the Electronic Frontier Foundation’s Cory Doctorow, because it was a “particularly extreme rewiring of its OfficeJet printers in the homes of customers”. He questioned if we can “even be said to own property […] if digital-rights management grants the manufacturer control of one part of a product in perpetuity?”.
Doctorow added his concerns that as OEMs “load ever more chips with similar software, courts may be swayed to extend the reach of copyright to parts and refills businesses across many industries”, with one such example being car manufacturer General Motors, which claims to “own parts of a vehicle after it has been driven off the forecourt”.
The article concluded that “for the time being”, third-party companies “seem likely to carry on finding ways to sell their cheap cartridges”, with aftermarket companies that have responded to the update by noting their products still work after the update including Static Control, 3T Supplies’ Peach division, Armor, KMP, LD Products, Pelikan and Cartridge People.
It finishes by discussing the implications of the recent HP Inc-Samsung deal for the latter’s printer business, with Laura Heywood, Managing Director of Kleen Striek, commenting that remanufacturers “may find it much harder to interfere with the printer chips made by Samsung”, which she said are renowned for being “more complicated that Germany’s Enigma code machine”.