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Recycling Times Magazine

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July 2011 | www.recyclingtimes.com.cn


Recycling Times Magazine

www.recyclingtimes.com.cn | July 2011

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Recycling Times Magazine

RecyclingTimes The magazine by the industry, for the industry.

Publisher & Managing Director Tony Lee +86 (0)756 3919260

Directors

David Gibbons +61 418 410 557 Sabrina Lo +86 (0)756 3919261

Editorial Consulting Editor Art Diamond

Editors

Johanna Breen Ludi translator@therecycler.com.cn Tina Chou +86 (0)756 3959286 Sophia Jiang editor@therecycler.com.cn Jessica Yin magazine@therecycler.com.cn

Designer

Vicki Chou +86 (0)756 3919270

Sales Sales Manager

Anna Leung +86 (0)756 3919266

Account Manager

Kevin Zhu +86 (0)756 3919265

Sales Executives

Sally He +86 (0)756 3919263 Tobee Deng +86 (0)756 3919282 Susi Guo +86 (0)756 3959299

Operation and Marketing Operation Manager Charles Lee +86 (0)756 3919267

Operations Assistant Sunny Zhang +86 (0)756 3959282

Accounting

Feng Li +86 (0)756 3919269 Joy He +86 (0)756 3919262 Tracy Zhang +86 (0)756 3959283 Jeven Zhang +86 (0)756 3919272

Web Designer

Ivan Zhao +86 (0)756 3919280

Published by

Recycling Times Media Corporation

editorial editorial

www.recyclingtimes.com.cn

I

was not surprised at the news that the United States International Trade Commission (ITC) issued an initial determination on Lexmark’s 337 investigation and recommended that a General Exclusion Order (GEO) be implemented. The market share for Lexmark replacement supplies is not high so that the current GEO will not have a profound effect on the industry. However, the influence of the Lexmark case must not be underestimated. Lexmark’s complaint also targeted remanufactured toner cartridges and components that used empties first sold outside the US. This decision may provide a good opportunity for local remanufacturing in the US, but it also focuses attention on Asian compatible cartridge producers and their need to redirect sales efforts to markets outside the United States. In addition, Turbon International’s litigation against HP for stealing trade secrets was settled with an out-of-court agreement. This is an interesting case. In recent years, HP has put up strong anti-aftermarket advertisements, claiming that the quality of non-OEM supplies is inferior to genuine HP products. Interestingly, this case revealed that HP actually contracted with one of the third-party suppliers- Turbon- to supply HP with remanufactured cartridges for its MPS business. HP abruptly terminated this cooperation afterward, a move which triggered Turbon’s lawsuit. Only HP can say what their thinking behind these series of actions is. I’m very excited to announce that Art Diamond is joining our team on July 1. Art is an iconic figure in the industry and has been in the imaging industry for over 55 years. With his vast knowledge and experience he will certainly strengthen our company and magazine. Art was mentor to David Gibbons when he started to work in the industry; David mentored us when we first started a few years ago. The teaming up of Art, David and us means that three imaging generations are joining forces to work together. I believe this will certainly bring Recycling Times to the next level of sophistication and expand our readership as well.

Address

5F, Pacific Insurance Building, Jiuzhou Ave, Zhuhai, 519000

RecyclingTimes

Tel:+86 (0)756 3220716 Fax:+86 (0)756 3220717 Email:info@therecycler.com.cn Website:www.recyclingtimes.com.cn

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July 2011 | www.recyclingtimes.com.cn

Tony Lee Publisher & Managing Director

All rights reserved. © 2011 by Recycling Times Media Corporation. The contents are not be to copied or republished without official written consent. The editorial content does not represent official positions of Recycling Times Media Corporation.


Recycling Times Magazine

contents contents

Media Sciences: once a rising star, now a setting sun Out-of-control costs, competitive price pressure, existing patents, failed strategies, and anticompetitive measures, are some of the problems that eventually brought down Media Sciences, the once shining success in the non-OEM digital color printer consumables industry

www.recyclingtimes.com.cn

Just a Minutet

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HP versus Xerox: small acquisitions, big revelations

It’s tough out there… but it always has been

HP and Xerox’s moves to acquire MPS companies in less than 24 hours of each other were no coincidence and a new MPS war could be sparked by this consolidation.

Industry Updates

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Recycling Times welcomes Art Diamond as Consulting Editor

An interview with Jim Cerkleski, CEO of Clover Holdings, Inc.

Canon announces resolution of patent infringement disputes

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Since Clover Technologies Group was acquired by GGC in April 2010, Clover has expanded rapidly through a number of acquisitions. Recycling Times had an opportunity to interview Jim Cerkleski, CEO for Clover Holdings, Inc.

ITC bars Lexmark compatible and remanufactured cartridges ITC favors HP on inkjet cartridge patent infringement suit Pantum printer wins CNY150 million contract

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Recycling Times travels to Brazil NAND ipl receives investment from Singapore investor

OEM News

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HP launched software to identify counterfeit toner cartridges

Menston establishes toner cartridge factory in Hefei

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IDC: worldwide hardcopy peripherals grow 4.2% in Q1

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Printer Essentials names WooJin Kim to serve as CEO LD Products expand to new facility

Product Release

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Static Control announces products for HP CP1025 colour cartridge

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UTec debuts nano conductive polymer rollers

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Tutorial: solid ink jet printing technology

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HP versus Xerox: small acquisitions, big revelations

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Océ and Canon printing operations combine in Switzerland and Japan

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Brother announces planned expansion of R&D activities in China

An interview with Jim Cerkleski, CEO of Clover Holdings, Inc.

Sales & Management

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Three steps to refresh older employees

Legal Issues

LG launches A4 color desktop printer powered by Memjet Lexmark becomes the manufacturer of choice

Media Sciences: once a rising star, now a setting sun

Profiles

MSE introduces its new MPS Engineered line of extended life cartridges

OEM News

HP announces organizational changes

Features

Hi & Bestech: new chips in stock MITO Color releases color toner cartridges

Samsung Australia launches environmentally conscious program

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Case Study: Epson‘s patent infringement lawsuit in China

Tech Zone

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Remanufacturing the Samsung ML-1640 toner cartridge www.recyclingtimes.com.cn | July 2011

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Recycling Times Magazine

Just a Minute with David Gibbons

It’s tough out there… but it always has been I went to the Recycling Times seminars being held on Australia’s Gold Coast early June. Forecasting analyst Charles Brewer and intellectual property lawyer Ed O’Connor— both from the USA— gave up-to-date, factual and entertaining presentations.

I must admit, if you are a pessimist, you could find plenty of material in the presentations to feed your fears about the way the industry is heading. But wait just a minute! Hasn’t this industr y always had its tough times? For the 19 years I have been involved, there has

▲ Ed O’Connor

▲ Charles Brewer

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July 2011 | www.recyclingtimes.com.cn


Recycling Times Magazine

Just a Minute

never been a year where there has not been any problems. There has always been the threat from the OEMs, or a recession, or the availability of empties, or the falling dollar, or the rising dollar, increased competition, acquisitions and take-overs. So let me take a moment to share a more balanced view. Charles Brewer, in summing up the forecasts, trends and futures for imaging said: 1. The market for hardware and supplies is not as strong as it was in 2007, but it is recovering;

2 . W h i l e t h e m a r ke t i s c o n t i n u i n g t o change, it is mature; 3. While it is tr ue remanufacturers are experiencing declines, the OEMs are as well, but looking forward, the OEMs will grow mainly through acquisition, while remanufacturers will consolidate; 4. Despite the bad economy in the west, there is plenty of new office hardware being installed. And for those operating at the lower end of the market, there are signs of life too! So let’s keep positive and get out there and do some business.

David Gibbons David Gibbons is Director of Recycling Times. He has been a school principal, marketer, businessman, remanufacturer and Executive Director of the Australasian Cartridge Remanufacturers Association until 2005. He is currently the director of communication of a large South Pacific organization.

www.recyclingtimes.com.cn | July 2011

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Recycling Times Magazine

Industry Updates

Recycling Times welcomes Art Diamond as Consulting Editor

Canon announces resolution of patent infringement disputes

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J

n July 1, industr y veteran Art Diamond joins the Recycling Times team as a Consulting Editor. Diamond has worked in the imaging industry continuously since 1955. He is currently President of Diamond Research Corporation (DRC), a high technology consulting and chemical engineering firm he formed in April 1968. DRC specializes in toner and media R&D, formulation, production and strategic marketing. In October 1993, Diamond launched R&R News, a monthly publication serving the cartridge remanufacturing industry. He also created and produced a series of R&R trade shows held in Europe, Australia and Mexico. He has served as a contributing editor for a number of industry publications and has been Chair or Co-Chair of various industry seminars and for ums. These include Toners 2011, the Global Remanufacturing Industry General Assembly (GRIGA) 2010 and the Asia Imaging Forum (AIF) 2010 and 2011. Diamond is also a licensed professional engineer who has been awarded 15 US patents in the field of reprography and authored a college level textbook, Handbook of Imaging Materials, now in its second edition. Diamond says, ‘I look forward to working closely with Tony and Sabrina as well as my dear friend David Gibbons and the rest of the team at Recycling Times. I am duly impressed by the accomplishments of this

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organization and their success with CIFEX|RemaxAsia Expo, an imaging industry event that has grown to attract close to 9,000 visitors from the four corners of the Earth’. ‘It is with much sorrow that I leave my position as a contributing editor for Recharge Asia magazine, but in the three years I proudly served that publication, it grew substantially in size and profoundly in editorial content. I leave dear friends and fond memories for the challenge of once again making an important difference as a productive member of the Recycling Times staff.’ Tony Lee, Managing Director and Publisher of Recycling Times, is excited by Art’s joining the team. He said, ‘As one of the most influential publications in the printer supplies industr y, Recycling Times is dedicated to provide high quality content to its readers worldwide. Art has a vast knowledge and experience in the imaging industry. We are confident that by joining Recycling Times he will strengthen our company and add both a technical and a marketing perspective to our English and Chinese magazines.’

July 2011 | www.recyclingtimes.com.cn

une 2, 2011— Canon Inc. and Canon U.S.A., Inc. announced the resolution of patent infringement disputes with 20 companies including Ninestar Image Int'l Ltd. and Zhuhai Seine Technology Co., Ltd., at the International Trade Commission and U.S. District Court for the Southern District of New York, concerning certain toner cartridges and their photosensitive drums sold for use in Canon or Hewlett Packard laser printers. As a result of the resolution, Ninestar, Zhuhai Seine and the other Respondents and Defendants in those proceedings have stipulated to a Consent Order from the International Trade Commission and Consent Judgment and Permanent

Injunction from the Southern District of New York, which will prohibit Ninestar, Zhuhai Seine and the other Defendants from making, using, selling and offering for sale in the U.S., and from importing into the U.S., the toner cartridges and their photosensitive drums, which Canon accused of infringement. Canon filed the complaints on June 28, 2010 for infringement of Canon's U.S. Patent Nos. 5,903,803 and 6,128,454, against the following 20 Respondents and Defendants:

•Ninestar Image Int'l Ltd. •Ninestar Technology Co., Ltd. •Ninestar Management Co., Ltd. •Zhuhai Seine Technology Co., Ltd. •Seine Image Int'l Co., Ltd. •Ninestar Image Co., Ltd. •Ziprint Image Corp. •Nano Pacific Corp. •Ninestar Tech. Co., Ltd. •Town Sky, Inc. •ACM Technologies, Inc. •LD Products, Inc. •Printer Essentials.com, Inc. •XSE Group, Inc. d/b/a Image Star •Copy Technologies, Inc. •Red Powers, Inc. d/b/a LaptopTraveller.com •Direct Billing International, Inc. d/b/a OfficeSupplyOutfitters.com •Compu-Imaging, Inc. •EIS Office Solutions, Inc. •123 Refills, Inc.


Recycling Times Magazine

Industry Updates

ITC bars Lexmark compatible and remanufactured cartridges

T

h e U S I n t e r n a t i o n a l Tr a d e C o m m i s s i o n ( I TC ) h a s i s s u e d the initial determination of the 337 investigation on Lexmark’s patent infringement complaint. On June 21, 2011. Judge Carl C. Charneski recommended a general exclusion order to bar the import and sale within the US of monochrome toner cartridges and components that infringe 15 Lexmark patents, regardless of manufacturer. This refers to US patents: 5,337,032, 5,634,169, 5,758,233, 5,768,661, 5,802,432, 5,875,378, 6,009,291, 6,078,771, 6,397,015, 6,459,876, 6,816,692, 6,871,031, 7,139,510, 7,233,760, and 7,305,204. A cease-and-desist order was also issued

against Ninestar and defaulting US domestic companies. Judge Charneski indicated that a limited exclusion order would be circumvented by manufacturers and sellers seeking to ‘mask their identities’. The barred products involve the remanufactured, cloned, compatible, and/ or counterfeit cartridges and components for the T520, X520, T522, X522s, T610, T612, T614, T616, T620, X620e, T622, T630, T632, T634, T640, T642, T644, E120, E220, E230, E232, E234, E238, E240, E250, E320, E322, E321, E323, E330, E332, E340, E342, E350, E352, and E450 monochrome laser printers and MFPs. As well as compatible cartridges, Lexmark’s complaint this time targeted

ITC favors HP on inkjet cartridge patent infringement suit

H

P announced on June 10 it has obtained a favorable Initial Determination by the US International Trade Commission (ITC) regarding the importation and sale of patent-infringing inkjet print cartridges. T h e I TC r u l i n g u p h o l d s the validity of HP’s patents in this case, finding MicroJet Technology Co. in violation as a direct infringer of HP’s patents and finding Asia Pacific Microsystems (APM) in violation as a contributory infringer of those patents. ‘HP is pleased with the outcome on these matters and the ITC’s pursuit of legal enforcement against practices that violate intellectual property rights’, said Andy Binder, D i r e c t o r, I n k j e t a n d We b

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Solutions Market Development, Imaging and Printing Group, HP. ‘We are committed to quality in our products and will continue pursuing action to protect HP’s innovations and, by extension, value to our customers.’ The decision is based on investigations into a complaint filed by HP and instituted by the US ITC on June 21, 2010, alleging violations of section 337 of the Tariff Act of 1930 in the importation into the United States and sale of HP-compatible inkjet print cartridges that infringe HP patents.

July 2011 | www.recyclingtimes.com.cn

remanufactured toner cartridges and components that used empties first sold outside the US. The ITC came to such an initial determination because none of the 23 respondents contested the validity of the patents asserted by Lexmark in its c o m p l a i n t t o I TC . T h e 2 3 d e f a u l t i n g respondents include Ninestar, Seine Image, Ziprint, Nectron, Jahwa, and ACM. However, the investigation of Print-Rite Holdings was terminated because of a settlement agreement. If none of the parties petition the commission for a review of the determination, this determination will become final.

Pantum printer wins  CNY150 million contract

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ecently, Beijing Pantum Technology Co., Ltd. closed a 150 million CNY deal with Guangdong Win-1 Group for the distribution of Pantum printers in China. This is by far the largest contract that the firm has signed since the launch of the Pantum printer at the end of last year. Beijing Pantum Technology is a wholly owned subsidiary of Zhuhai Seine Technology Co., Ltd. – the manufacturer of Pantum printers and distributor of Pantum printers in the Chinese market. General Manager of Beijing Pantum Mr. Liu Hong revealed that Win1 will distribute all lines of Pantum products through its well-established sales channels. This will help Pantum printers to gain market share in Southern China. Mr. Liu said ‘We started discussions with Win-1 as early as when we launched the first Pantum printer in December 2010. Both

parties have worked closely together to reach this important deal. This also shows Win-1’s confidence in Pantum printers as well as in our company’. The Win-1 Group is a large commerce group of a wide range of products. The group has two companies that specialised in the sales and distribution of office supplies – Win-1 and UEEDY. Win-1 mainly distributes through direct sales and outlet stores, while UEEDY is an online sales company. Pantum printers P1000, P2000, 1050 and 2050 and cartridge PD-100 and PD-100H are now available online at www.ueedy.com.

▲ Pantum P2000


Now Hiring National Sales Manager for China Requirements: Multi-national experience Academic degree or comparable industry experience Proven track record in business-to-business sales and 3 to 5 years experience Ability to manage a sales group in China and a growth plan determined by the company Self-motivated with the ability to handle pressure Good management skills with both groups and individuals Must make customer visits in China to support the sales team Age Range: 35 to 50 years Good spoken Mandarin Good spoken and written English Location: Hong Kong or China (if Hong Kong, will need to travel frequently to China)

Please direct all CVs and inquiries to Human Resources, recruitment@scchongkong.hk


Recycling Times Magazine

Industry Updates

Recycling Times travels to Brazil

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e c y c l i n g T i m e s pointed out that the dates attended Reciclamais for RemaxAsia Expo are very held in Sao Paulo, convenient for him to travel to China, because he can attend Brazil June 14–16. The 2011 show is Reciclamais’ another important trade show 10th edition. 138 companies Canton Fair in Guangzhou after exhibited in the show, a great visiting Zhuhai. increase from last y e a r. I n c r e a s i n g opportunities in Brazil and L atin America markets have attracted a greater number of international exhibitors, especially from China, which ▲ Recycling Times at Reciclamais show Tony Lee, Managing Director accounted for nearly 40%. Because of the large number of Recycling Times commented, Chinese exhibitors at the show, ‘Our team attends trade shows the visitors also showed more in different parts of China and interest in the Chinese market. around the world, and meets its Therefore, the booth of Recycling magazine readers, trade show Times received a lot of attention. exhibitors and visitors, so as to Many inquired about RemaxAsia get more chances to understand Expo, which will be held in the industry in different regions and their needs’. Zhuhai China on October 13–15. In 2011, Recycling Times has Victor from Silmec of Chile said, ‘I know there is a large number travelled to Europe, the USA, of manufacturers in Zhuhai and Russia, Australia, and Brazil. In that part of China. I’m planning July (20–21), Recycling Times will be at World Expo, Las Vegas, to attend RemaxAsia this year.’ Insumos from WP do Brasil booth 830.

NAND ipl receives investment from Singapore investor

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un 17, 2011, Navran Advanced Nanoproducts Development International Pvt. Ltd. (NAND ipl) has received investment in the form of equity from a Singapore based Financial Institutional Investor. Transaction details were undisclosed. Mr. Kumar Binit, Co-Founder and CFO of NAND ipl, said ‘the investment is very timely and will allow us to fully realize our potential and vision. This will help us tremendously in ramping up our production of our Chemical toner from Q1 of 2012. This is in anticipation of the overwhelming response we are getting, not only from the aftermarket companies, but also from OEMs for our Color Chemically Produced Toners (CCPT)’. Behind the NAND technology and the company’s new USD 20 million stateof-the-art toner plant in Una, Northern India is Dr. Abhinava Kumar Srivastava, founder and Managing Director of NAND ipl, a chemical engineer who pioneered CCPT toner manufacturing for two leading independent CCPT manufacturers. The Indian plant at Una is the third such operation he has helped design and build. NAND ipl uses nanotechnology

and its own intellectual property to manufacture chemically produced toners. According to NAND’s introduction, its proprietary CCPT technology is the ability to produce structured particles of CCPT from inhouse manufacture of base nanomaterials of precise particle size and distribution. By choosing the proper additive blending package and protocol these unique CCPTs can be tailored to suit every important digital color printer in the marketplace. The company is engaged in an intense effort to expand its line of Bestone color toners, which are specially produced to suit the aftermarket cartridges. Because spent aftermarket cartridges vary widely in build components, and in the condition of those parts, variations in print quality and toner performance are inevitable. NAND offers its customers close technical support, which extends from sharing blending technology to conducting print defect analysis. NAND ipl is a R&D -driven manufacturer of Bestone chemical toner for use in popular laser printers/ copiers with headquarters in Gurgaon, New Delhi National Capital Region India.

Menston establishes toner cartridge factory in Hefei

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enston Limited ( Vivicolor), a remanufacturer of inkjet cartridges, has formally announced plans to penetrate the toner market by establishing a toner factory in Hefei on 17th June, 2011. The new toner factory, the Huatai Printing Technology (Hefei) Co., Ltd, covers around 13,333 square meters. It will specialize in eco-recycled toner cartridges with a monthly capacity of 250 thousand units. Trial production will begin this July, with mass production kicking off in August.

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July 2011 | www.recyclingtimes.com.cn

Menston claims that the new factory in Hefei inherits its well-equipped manufacturing environment, advanced facilities and rich management experience in the inkjet cartridge field. The company also indicates a wish to the further cooperate with all suppliers, not only on toner empties but also on spares and accessories. As Mr. Wu Cheng’ai, president of Menston commented, ‘We are glad to have our own toner factory in Hefei. It will be a good beginning for us to devote ourselves to the remanufacture of

toner cartridges. We sincerely hope to expand the production scale to provide all partners and customers with satisfactory products and services.’

▲ Huatai Printing Technology (Hefei) Co., Ltd


Recycling Times Magazine

Industry Updates

IDC: worldwide hardcopy peripherals grow 4.2% in Q1

I

DC has published the Worldwide Quarterly Hardcopy Peripherals Tracker of Q1, 2011 (1Q11). It stated that emerging markets continue to outperform in the hardcopy peripherals market, with an average growth of 13% year-over-year compared to worldwide shipment growth of 7.2% in 1Q11. The tracker also stated that the worldwide hardcopy peripherals market recorded more than 36 million unit shipments in 1Q11, and similar to the last two quarters, monochrome laser still led the pack in terms of growth with close to 8.5 million units shipped and 19% year-over-year growth. IDC expects the earthquake, tsunami and nuclear crisis in Japan will have little impact on the global imaging market, but more negative impact on laser devices than for inkjet ones. ‘So far, we have had no

1Q11 1Q10 reports of stock shortages 1Q11 1Q10 1Q11/1Q10 Vendors Unit Unit Market Share Market Share Growth for hardware. We anticipate Shipments Shipments 1. HP 13,065,273 42.4% 11,827,227 41.2% 10.5% the laser forecast for Japan 2. Canon 5,347,650 17.4% 4,802,665 16.7% 11.3% will return to positive 3. Epson 4,351,554 14.1% 4,340,154 15.1% 0.3% growth by early 2012’, said 4. Samsung 1,832,832 6.0% 1,812,820 6.3% 1.1% Phuong Hang, program 5. Brother 1,772,360 5.8% 1,701,554 5.9% 4.2% Others 4,414,533 14.3% 4,236,039 14.7% 4.2% manager, Worldwide Total 36,537,679 100.0% 34,019,445 100.0% 7.2% Hardcopy Peripheral ▲ Source: IDC Worldwide Quarterly Hardcopy Peripherals Tracker, June 2011 Trackers. Monochrome laser devices surpassed color laser in Losing share to laser technology, inkjet took 63% of terms of year-over-year growth, with nearly 8.5 million overall shipments in 1Q11, down 4% from a year ago, while laser devices grew 3% to a 33% share over the units shipped, producing a 22% gain. Monochrome same period in 1Q10. All regions except Japan saw laser printers dominate in the office, accounting for a year-over-year growth in laser shipments with Asia/ 62% share of all monochrome devices. Worldwide Hardcopy Peripherals Market Share and Pacific (excluding Japan) and Latin America seeing Year-Over-Year Growth, First Quarter 2011 . the highest growth at 29% each.

Printer Essentials names WooJin Kim to serve as CEO

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rinter Essentials, Inc. has announced that WooJin Kim has been promoted to serve as the company’s Chief Executive Officer. Kim joined Printer Essentials in January 2011 as its Executive Vice President. With over 20 years of experience in the high-tech and imaging supplies industries, Kim brings extensive experience in sales, marketing and strategic business development to this new role. Prior to joining Printer Essentials, Kim served as the CEO of Hunterhouse Americas Inc., the firm that serves as the primary business development representative and strategic advisor to the host of companies under the Print Rite brand umbrella for the Americas. Kim also serves as a member of the Board of Directors for the International Imaging Technology Council, or I-ITC.

Printer Essentials is a direct importer and wholesaler of compatible and remanufactured imaging supplies. Together with its parent Media Solutions Holdings, and subsidiary companies Cardinal Cartridge and Imaging Resources it is owned by the leading private equity firm Kayne Anderson Capital Advisors. Board of Directors member and Senior Managing Director for Kayne Anderson, David Walsh stated, ‘We are extremely pleased to have WooJin at the helm. His track record in the imaging supplies industry, combined with his strong executive and leadership qualities will enable Printer Essentials to continue its enviable growth and meet the challenges of this dynamic industry. Additionally, his straightforward style has won the respect of employees, customers and investors’. Kim said, ‘I am extremely excited to take on this new

role. … During his five year tenure here, first as CFO and then more recently as CEO, Dan Ghammachi has done a terrific job of building an organization that we can all be very proud of and I look forward to continuing his great work. We have a very talented group of people working with us here and our vendor partners have been incredibly supportive in the growth of our business. With this combination, we aim to continue our market leadership in offering world class products and services to our customers every minute of every day’.

LD Products expand to new facility

U

S online reseller LD Products held a ceremony on June 17 to celebrate the building of its new facility at Long Beach, California. This new site covers an area of 110,000 square feet and will be completed by midDecember this year.

Engineers are designing the headquarters to meet LEED (Leadership in Energy and Environmental Design) Platinum standards, incorporating energy saving, water efficiency, carbon dioxide emission reduction and clean indoor environmental conditions.

LD Products is a successful online retailer of OEM and non-OEM cartridges. The company was founded by its CEO Aaron Leon in a university dorm room in 1999. It now employs 115 people. In 2010, the firm grossed an estimated USD 70 million and was ranked in the top 250 internet-based firms in the world. www.recyclingtimes.com.cn | July 2011

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Recycling Times Magazine

Product Release

Static Control announces components for HP CP1025 color cartridge

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tatic Control has introduced dedicated Odyssey color toner and components to remanufacture cartridges used in HP’s popular LaserJet Pro CP1025 desktop color printer. These small, low-cost printers are sold worldwide and have high replacement rates, which mean profitable opportunities for cartridge remanufacturers worldwide. Static Control has Odyssey toners, universal chips, seals, shipping protectors and the tools and fixtures needed to remanufacture the HP CP1025 toner cartridge. Replacement drum unit chips are available now. OPC drums and shipping protectors will soon

be available to remanufacture the drum unit. HP CP1025 Cartridge Part Numbers: CE310A, CE311A, CE312A, CE313A Static Control Product Codes: HP1025-26B-COS, HP1025-26B-MOS, HP102526B-YOS, HP1025-30B-KOS HP1025DUCHIP – Dedicated replacement chip U32CHIP-C – Universal replacement chip for HP CP1025, CP1525 & CM1415 MFP-cyan cartridges U32CHIP-K – Universal replacement chip for HP CP1025, CP1525 & CM1415 MFP-black cartridges U32CHIP-MA – Universal replacement chip for HP CP1025, CP1525 & CM1415 MFP-magenta cartridges

U32CHIP-Y – Universal replacement chip for HP CP1025, CP1525 & CM1415 MFP-yellow cartridges HP1320FMHCAP – Foam hopper cap HP26FMHCAP – Foam hopper cap HP26RISEAL – Rigid insertable seal for the HP 2600 and qualified for the CP1025 HP1025THSHPROT – Toner hopper shipping protector for the HP CP1025 HP1025HEJIG – Hopper entry jig HP1025DBSPACER – Doctor blade spacer tool for HP LaserJet Pro CP 1025 cartridge HP26HETOOL – Hopper/Waste bin entry tool for HP2600.

Hi & Bestech: new chips in stock

H

i & Bestech, the Taiwan based toner chip manufacturer, has released its new series of chip products for various toner cartridges of Samsung, Minolta, Fuji Xerox, HP, Ricoh, Dell, and Olivetti.

Product Code

OEM

OEM Model

Yield

MLT-D205S

ML3310/3710/SCX4833/SCX5637/SCX5737

2K

MLT-D205S

ML3310/3710/SCX4833/SCX5637/SCX5737

5K

MLT-104

ML1660

MLT-D105

SF650P,ML-1910/1900/1915/2580 /SCX4600/4606/4623

MLT-D108

ML-1640/1641/1642/2240/2241

MLT-D209 Samsung

SCX-4300/4310/4315

CLT-407

CLP-320/325,CLX-3285

CLT-409

CLP-310/315,CLX-3170/3175

CLT-508

CLP-615/620/670

CLT-609

CLP-770

Product Code CT201592

OEM

CT201591 CT201593 CT201594

Fuji Xerox

Olivetti

SCX-4824/4828/ML-2855

MLT-D109

Product OEM Code

OEM Model

Yield

Docuprint CM205b/ CP105b/ CP205 CYAN

1.4K

Docuprint CM205b/ CP105b/ CP205 Black Docuprint CM205b/ CP105b/ CP205 MAGENTA Docuprint CM205b/ CP105b/ CP205 Yellow

2K

Product OEM Code

1.4K 1.4K

CT201609

Docuprint P205b/M205b

1K

CT201610

Docuprint P205b/M205b

2.2K

CWAA0776

WC 3210/3220

5K

Ricoh

OEM Model d-Color MF451/MF551/MF651 Cyan Imaging chip d-Color MF451/MF551/MF651 Cyan Imaging chip d-Color MF451/MF551/MF651 Cyan Imaging chip d-Color MF451/MF551/MF651 Cyan Imaging chip d-Color MF3000 Cyan TONER chip d-Color MF3000 Black TONER chip d-Color MF3000 Magenta TONER chip d-Color MF3000 Yellow TONER chip d-Color MF3000 Cyan Imaging chip d-Color MF3000 Black Imaging chip d-Color MF3000 Magenta Imaging chip d-Color MF3000 Yellow Imaging chip

Yield 120K 285K 120K 120K 6K 6K 6K 6K 30K 30K 30K 30K

OEM Model

Yield

SPC220/221/222 BLACK CHIP SPC220/221/222 Cyan CHIP SPC220/221/222 Magenta CHIP SPC220/221/222 Yellow CHIP SPC231/232/310/311 BLACK CHIP SPC231/232/310/311 Cyan CHIP SPC231/232/310/311 Magenta CHIP SPC231/232/310/311 Yellow CHIP

2K 2K 2K 2K 6K 6K 6K 6K

www.recyclingtimes.com.cn | July 2011

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Recycling Times Magazine

Product Release

MITO Color releases color toner cartridges

I

n June 2011, Zhuhai Mito color Imaging Co., Ltd. introduces color toner cartridges for use in Fuji Xerox DocuPrint CP105b/205/CM205b, which are compatible with Xerox Phaser 6000/6010 and Dell 1250c/1350cnw/1355cn/1355cnw as well. The chip is developed by MITO independently, which reduces cost substantially and allow MITO offer a very competitive price. The page yields and printout quality are as good as OEM products.

MITO No.

OEM No.

Color

MTXE-6000K TD

106R01630

BK

Fuji Xerox DocuPrint CP105b/205/CM205b is said to be the world’s smallest A4 color laser-class printer with high-quality printouts and fast printing speeds, especially oriented for small and growing businesses and homeoffice entrepreneurs. The application of award-winning SLED technology with simple structure and high resolution (1200 x 2400 dpi) not only make the printers smaller and also ensure the printout quality. Furthermore, specially formulated ecoYield pages Mito

OEM

2000

2000

MTXE-6000C TD

106R01627

C

1000

1000

MTXE-6000M TD

106R01628

M

1000

1000

MTXE-6000Y TD

106R01629

Y

1000

1000

MTDE-1250K TD

331-0778

BK

2000

2000

MTDE-1250C TD

331-0777

C

1400

1400

MTDE-1250M TD

331-0780

M

1400

1400

MTDE-1250Y TD

331-0779

Y

1400

1400

MTFX-105K TD

CT201591

BK

2000

2000

MTFX-105C TD

CT201592

C

1400

1400

MTFX-105M TD

CT201593

M

1400

1400

MTFX-105Y TD

CT201594

Y

1400

1400

U

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July 2011 | www.recyclingtimes.com.cn

▲ FX-CP105

Chip's Region

OEM No. of 10601627-30 are general version for Western Europe and North America; OEM No. of 10601631-34 are general version for Eastern Europe and South America (non-chip equipped)

Universal for all regions

OEM No. of CT201591-4 are general version for Asia-Pacific; OEM No. of CT201595-8 are general version for China;

UTec debuts nano conductive polymer rollers Tec showed a new series of “Nano Conductive Polymer Rollers” for use in toner cartridges during Reciclamais South American Expo 2011, which was held from June 14 to 16 in Sao Paulo, Brazil. Thanks to the advanced nanotechnology developed for the production of the core material, Nano Conductive Polymer Rollers deliver excellent uniformity and

friendly toner offers brilliant energy saving performance, e.g. 20 to 40% less power consumption and 35% less CO emissions.

low mechanical resistance, providing contamination- and background-free printing and a long lifespan that truly outshine rollers made with conventional materials. Besides presenting this latest breakthrough in roller technology, UTec also showcased a comprehensive range of compatible laser and inkjet cartridges, compatible copier toner kits, compatible ribbons and wide format supply solutions.

For use in Xerox Phaser 6000 /6010

Dell 1250c /1350cnw /1355cn /1355cnw

Fuji Xerox DocuPrint CP105b /CP205w /CM305b


Recycling Times Magazine

Product Release

MSE introduces its new MPS Engineered line of extended life cartridges

M

icro Solutions Enterprises (MSE) introduces its new “MPS Engineered” line of extended life cartridges. MSE states that the underpinnings of this new sub brand are designed to create differentiation and awareness that there is more to manufacturing an extended life cartridge than simply adding more toner. MSE also is trying to alert its customers that quality is just as essential in MPS programs as in transactional sales models. In order for MPS dealers to have profitable programs they require reliable cartridges. Luke Goldberg, SVP MSE Global says of the new “MPS Engineered” line, “Our line of extended life cartridges are supported by the markets most advanced and patented technologies, custom formulations of raw materials, and rigorous “real world” testing

protocols. The goal is to provide a product that offers consistently excellent output from start to finish with no degradation. Another critical aspect of MSE’s “MPS Engineered” cartridges involves qualification in duplex modes. Duplexing has become more common in offices to save paper and costs and is especially prevalent in MPS engagements. Duplexing has been a challenge for our industry. Many of MSE’s proprietary systems and materials allow for us to eliminate many industry wide historical challenges associated with duplexing. We also anticipate this trend continuing in that most new printer releases will have this capability. Shortly we will unveil a new marketing piece that will really describe the “MPS Engineered” difference to any dealer or end user.” Gil Wazana, VP of Sales- Americas added,

“Extended life cartridges are an integral part of any successful MPS program, but it is crucial that MPS providers understand the common pitfalls and that not all extended life cartridges are created equal. We feel strongly about the importance of quality in an MPS program and are committed to offering education through our marketing and the consultative sales training programs we offer our customers.”

www.recyclingtimes.com.cn | July 2011

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Recycling Times Magazine

OEM News

LG launches A4 color desktop printer powered by Memjet

L

G Electronics (LG) and Memjet have jointly introduced Memjet’s office printing technology into the Korean market. LG’s printer model Machjet LPP6010N adopts ▲ LG_Machjet Memjet’s Page Straight Array (PSA) Technology, which boasts more than 70,000 ink nozzles on a single printhead – 17 times the nozzle density of traditional printheads. With this technology, Machjet can print 60 pages per minute and the printouts are 1600x800 dpi resolution. The new product is aimed at the office market and for now will be available in the South Korean market through LG’s distributors and resellers who sell its computer systems locally. ‘LG prides itself on launching truly innovative products and is pleased to bring the world’s fastest A4 color desktop printers powered by Memjet’s game-changing printing technology to the Korean market’, said Si-hwan Park, Vice President of LG Electronics’ monitors and printers business unit. ‘The Machjet delivers completely new levels of color performance and affordability and uses significantly less energy versus laser printers.’ Len Lauer, president and CEO of Memjet, said that by ‘combining Memjet’s core technology benefits with LG’s brand, corporate capabilities and vast distribution network, LG is creating exciting new value for Korean customers looking to be more efficient and cost effective in their office printing’. In May, Memjet partnered up with Lenovo Group Ltd. and launched the RJ600N into the Chinese market. In India, Memjet has teamed up WeP Peripherals Ltd., in Taiwan Kpowerscience Co. and in the US, Delphax Technologies Inc. LG is by far the biggest company so far to embrace Memjet’s printing technology.

Lexmark becomes the manufacturer of choice Lexmark International, Inc. (NYSE: LXK) recently became the manufacturer of choice for a national workgroup and color laser printer bid sourced by the U.S. Department of Veterans Affairs ( VA). The contract calls for the potential placement of more than 20,000 Lexmark E, T and C Series workgroup monochrome and color laser printers throughout 260 VA locations, including outpatient clinics in the U.S., within the next 90 to 120 days. The contract is expected to help the VA achieve more than USD 15 million in savings in relation to standard purchasing costs. The award is the first national printer bid sourced by the VA. Previously, the VA sourced its printers regionally with awards made independently by each specific Veterans Integrated Service Network ( VISN), Region, or Medical Center. The winning VA bid was awarded directly to Alvarez & Associates, LLC, a Washington, D.C.-based information technology and executive management services company. Alvarez & Associates is a Lexmark partner and a 100 percent Service Disabled Veteran Owned /Small Business (SDVO/SB) that provides intellect, analysis, technology and counsel to government agencies. "Lexmark is proud to support the vital mission of Veterans Affairs," said Marty Canning, Lexmark executive vice president and president of Imaging Solutions and Services. "Lexmark Government Solutions provides products, services and solutions that enable agencies to manage their data and documents more efficiently and securely while lowering costs and better meeting their output needs. "Lexmark's wide range of laser printers deployed across these locations will help support the critical care services that are delivered to our military veterans and their families," added Canning. "The joint efforts of the Alvarez and Lexmark teams and the quality Lexmark printers that meet the specific needs of the VA were the key components in achieving this important contract," stated Kirk Hanson, executive vice president and general manager for Alvarez & Associates.

Océ and Canon printing operations combine in Switzerland and Japan

T

he move following the completion on March 9, 2010 of the public offer by Canon Inc. for Océ outstanding common shares, Canon and Océ announced plans to combine both companies' printing operations in Switzerland and Japan To facilitate the combination in Switzerland, Canon Europa N.V., a 100% subsidiary of Canon Inc., and Océ N.V. have reached agreement for Océ N.V. to sell 100% of Océ (Schweiz) A.G. to Canon Europa N.V.

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Océ (Schweiz) A.G. accounts for 3-4% of overall Océ revenues. The transaction price amounts to EUR 15.9 million. In Japan, Canon Marketing Japan Inc., a company in which Canon Inc. holds the majority of the voting rights, and Océ N.V. have reached an agreement by which Océ N.V. will sell 100% of the share capital in Océ-Japan Corporation to Canon Marketing Japan Inc. Océ-Japan Corporation accounts for less than 1% of overall Océ revenues. The transaction price amounts

to JPY 1,100 million (approximately EUR 9.6 million). By combining their Japanese businesses, Canon and Océ will be better placed to generate sales, particularly in the wide-format and production-printing segments. The combined sales organizations will make both companies' products and services available to a broader customer base, serving to reinforce the Canon-Océ market position in Japan. Moreover, employees will have greater opportunities as a result of the strengthened combined business.


Global Remanufacturing Industry General Assembly October 12, 2011, Zhuhai, China The best opportunity to learn about the industry On October 12, the second Global Remanufacturing Industry General Assembly(GRIGA) will again be hosted in Zhuhai, following the roaring success of its first edition. Representatives from regional and international associations for the industry, publishers and industry elites from China, Europe, India, Japan, Russia and USA presented at this charter event of GRIGA in 2011. Right now, GRIGA offers the best opportunity for you to learn about the industry trends and developments. Know your industry, and speak for your industry.

www.visitremax.com.cn


Recycling Times Magazine

OEM News

Brother announces planned expansion of R&D activities in China

B

rother Industries Ltd. (President: Toshikazu Koike, hereinafter BIL) announced the planned expansion of its wholly owned software development company, Brother Software Development (Hangzhou) Ltd. (hereinafter BSH) in China. With the aim of BSH becoming an integrated development company in the near future. As a result of this change in its business plan, BSH will adopt the new name of Brother System Technology Development (Hangzhou) Ltd. Brother System Technology Development (Hangzhou) Ltd. is to commence product specification change and product evaluation activities. In FY2011, the Brother Group launched its new mid-term business strategy "CS B2015" under the slogan of "Back to Growth". For its main printing business, BIL promotes the strategy to grow the business globally. To achieve global growth, BIL aims to expand product sales and markets in the emerging countries and to create more competitive products to satisfy existing customers' needs. With enhanced development capability, BIL's expansion of its operations at Brother System Technology Development (Hangzhou) Ltd. will provide enhanced development capability, enabling BIL to respond to customers' needs as these become more diverse. According to this change USD 2.4 million will be increased in capital to USD 4.7 million. In addition the BIL Production Department, located in Japan, will promote the development and enhancement of essential technologies to strengthen the Brother Group's development structure and to create products which meet customers' demands. New Company Name Location

Brother System Technology Development (Hangzhou) Ltd. (Temporary) 25F Xiao Hong Building, 1777 Bin Sheng Road, Bin Jiang District, Hangzhou 310052, China

Capital

USD 4.7 million 100% invested by Brother Industries, Ltd.

Business Description

Development of printing equipments and related operations

No. of Employees

Approximately 80 (as of Mar, 2012)

Samsung Australia launches environmentally conscious program

S

amsung Electronics Australia today announced the launch of the S.T.A.R.T Program (Samsung Takeback And Recycle Toner) in partnership with Close the Loop. The S.T.A.R.T program provides businesses with a simple way to recycle any consumable items that can be removed from Samsung printers. The S.T.A.R.T program marks Samsung’s commitment to providing businesses with comprehensive solutions to their printing needs from start to finish. This environmentally conscious program safely processes empty cartridges into their major usable raw components (plastics, metals, toner, packaging, cardboard and other miscellaneous materials) and then makes those recovered materials available to the raw materials marketplace for reuse in new manufacturing for a range of products. “As part of Samsung's Global Eco-Management Policy, we are committed to encouraging responsible business practices” said Emmanuele Silanesu, Head of IT at Samsung Electronics Australia. “Our partnership with Close the Loop and the S.T.A.R.T program is another step towards promoting recycling and limiting waste in the workplace”, he added. The S.T.A.R.T program has been specially designed to make it quick and simple for business owners to recycle. Customers are required to register with Close the Loop before receiving a starter kit including collection box and liners. Recycling the product is as simple as placing the items into the supplied collection box bags and calling Close the Loop Customer Service for collection. All cartridges, waste collectors, bulk toners and/or developer and drum units can be recycled through the Samsung S.T.A.R.T Program.

▲ Outline

HP launched software to identify counterfeit toner cartridges

H

ewlet Packard (HP) launched its toner cartridge authentication software enabling customers to confirm they had purchased original HP toner cartridges. According to Tina Rose, anti-counterfeit program manager for Europe, the Middle East and Africa, HP toner cartridge authentication is free software applicable on select HP laserjet printers and validates the installed cartridge as an original

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July 2011 | www.recyclingtimes.com.cn

HP laserjet toner cartridge, or an alternative supply such as a "remanufactured, refilled, cloned or counterfeit cartridge”. Once fitted in a printer, the anti-counterfeit software would inform the user when a cartridge is not genuine and presents additional information directing them to HP's anticounterfeit website to report the potential counterfeit cartridge.

The new technology works on HP LaserJet printers such as: HP Color LaserJet Pro CP5225 Series, HP LaserJet Pro M1530 MFP Series, HP LaserJet Pro P1100 Series, HP LaserJet Pro P1560 Series, and HP LaserJet Pro P1600 Series. HP will also conduct training sessions in Tanzania and Kenya targeting government officials directly involved in anti-counterfeit activities to enhance capacity to identify counterfeit goods.


Recycling Times Magazine

OEM News

HP announces organizational changes

H

P announced organizational changes that will more closely align its corporate structure with the strategy it announced in March. The organizational changes will increase transparency for these business functions relative to the company’s strategic roadmap, sharpening the executive team’s f o c u s o n c u s t o m e r- f a c i n g b u s i n e s s e s , further enabling opportunities for synergies across business units, and positioning HP for the opportunities it sees in the market. The company also announced that one of its most successful executives is joining the HP board of directors, and it has appointed executive sponsors for two of its most important growth markets. Ann Livermore, who has worked with HP for 29 years, has been elected to the HP board. Livermore will continue to serve as interim lead for HP Enterprise Services and sponsor certain key accounts until a new

services leader is named. Another change is that customer-facing business units report directly to CEO and

▲ Léo Apotheker

president Léo Apotheker, who as served as president and chief executive officer of HP and as a member of the HP board of directors since November 1, 2010. Executive vice presidents of Enterprise Servers, Storage, Networking and Technology Services, Software, as well as

Global Sales, will now report to Apotheker. As part of the realignment to improve t h e c o m p a n y ’ s f o c u s o n c u s t o m e rfacing businesses, HP will streamline its administrative operations. HP will eliminate the chief administration officer role and broaden the role of its chief information officer. The functions that make up that organization will be subsumed within other parts of HP. C h i n a a n d I n d i a a r e c r i t i c a l m a r ke t s to HP, so the company will increase its dedication to supporting these markets. To achieve this, in addition to their existing global business leadership roles, Todd Bradley, executive vice president, Personal Systems Group, will lead cross-business initiatives focused on expanding HP’s market share in China, and Vyomesh Joshi, executive vice president, Imaging and Printing Group, will lead similar efforts in India.

www.recyclingtimes.com.cn | July 2011

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Recycling Times Magazine

Features

Tutorial: solid ink jet printing technology Solid ink jet printing, also known as phase change ink jet, utilizes ink sticks instead of liquid inks for image creation. When heated, these inks transform from a solid to a liquid phase for spraying from a series of ink jet nozzles comprising the printhead. The molten ink image instantly solidifies on the media being printed so that no drying is necessary. This technolog y is unique in the digital printing arena and has been refined and perfected to the point where it is highly competitive in cost and performance with conventional ink jet and dry toner methods, especially for color print generation. Tektronix’s first generation solid ink jet printer

The first generation solid ink jet printer was invented by Tektronix, Inc. of Beaverton, Oregon in 1986. This early model, the Phaser III, was developed in 1991. It won awards and recognition from PC Magazine, MacUser and MacWorld that year. The Phaser III has 16 ink jets per color (cyan, magenta, yellow) and 48 jets for black. It is capable of printing an 8.5 x 11-inch page in just under two minutes. The initial price for a Phaser III, at USD 10,000, was too high for most offices and therefore was mainly utilized in the commercial printing industry. Despite its advantages, this early solid ink printer had several obvious drawbacks. First, the Phaser III’s heavy printhead (1.8 kg) required a sturdy table to prevent it from “walking” across the room when the printhead shuttled back and forth to create images directly on

the media. Most of the time consumed in the printing operation was spent in decelerating the printhead, stopping, and then accelerating it in the reverse direction. There were also problems such as ink drop placement error and the inconsistency of secondary colors. As a result, future development of solid ink printing focused on the simplification of paper handling and the paper path. Offset printing a major improvement

A key innovation was made in 1995, when Tektronix utilized the offset printing method. The new printer used a rapid and precise ink jet printhead to replace the oscillating one and to spray the ink streams onto a spinning drum. The image was next transferred from the drum to the media. Since the paper can go straight through the printer in what is essentially an offset printing process, the new approach greatly simplified the paper path, but, it also increased the requirement of the ink. The ink must be tough and clean at ambient temperature. It must also have a low melt viscosity so that it can be sprayed through the fine jets. Finally, the ink must “freeze” (solidify) on the spinning drum surface quickly and then be transferred completely to the paper or film media during the offset transfer step. These requirements added up to a highly sophisticated, high technology ink composition, it also enabled Tektronix to protect their invention with a forest of patents. Outstanding among their team of scientists is Dr. Donald R. Titterington who, as inventor or co-inventor, has been awarded more than 130 U.S. patents mostly on solid ink jet ink formulation, preparation and use. Solid ink jet printing today

In 2001, Xerox acquired the Color Printing and Imaging Division of Tektronix and made the solid ink jet

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Recycling Times Magazine

Features

technology an important part of the Xerox product line. Xerox has steadily improved the technology and the hardware, adding correction software, ColorSync, Adobe PostScript 3 and other features. Today, with Media Sciences exiting the replacement ink stick business, Xerox is the only OEM offering solid ink sticks to the aftermarket. The Phaser and ColorQube series are both popular in

the market. In fact, many people in the industry believed that the acquisition of Tektronix’s Color Printing and Imaging Division was a key step in Xerox becoming the second largest presence in the office color printing industry. Basically the current technology is based upon a threestep process: Step 1. A drum maintenance unit first cleans the surface of the drum and applies an extremely thin layer of silicone release oil to the drum surface. Step 2. The printhead is heated to 135ºC, enabling it to spray the droplets of the molten ink to the spinning drum accurately. Since the drum surface is maintained at an intermediate temperature of 65ºC, the droplets of ink striking the drum will change instantly to a malleable semisolid. (See Figure 1) Step 3. The preheated paper passes into a pressure nip formed by a pressure roller and the print drum. The image on the drum surface transfers onto media with the help of heat and pressure in a single pass. The image almost instantly solidifies on the media. (See Figure 2) The core of the solid ink jet printer is an ▲ Figure 1 The solid ink jet printer with image offset feature anodized, cylindrical, aluminum drum and a stainless steel printhead with multiple nozzles running across the full width of the drum. Ink droplets are piezoelectrically generated by the printhead which contains many equally spaced sets of aperture columns, each of which is formed of four color (cyan, magenta, yellow and black) jets. Each time the drum revolves, each aperture column prints the ink droplets on every pixel in the line over which the column passes. The simultaneously printed columns creates parallel paths of ink droplets around the drum, and with each drum revolution, the printhead is indexed over to make the next set of droplets parallel to the previous set. This process continues until the image is completely deposited on the drum. The time interval for the printhead to make each lateral indexing movement is determined by the space between each column. The times for the drum to make one revolution is determined by the desired print quality. Finally the drum makes one ▲ Figure 2. Solid ink jet printer with offset printing path.

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Recycling Times Magazine

Features

additional revolution to offset the completed image to the media. Advantages

5.Print durability and per manence. There is the possibility that the print can be scraped off. The organic colorants used in the solid inks make them sensitive to ultraviolet light.

As an imaging technology designed for full color printing, the keys to producing high image quality are Closing remarks the ink jets’ consistency and the interlacing method for Solid ink jet printers, after years of improvement and generating each set of parallel lines. refinement, have taken a stable and respectable share The advantages of solid ink jet over laser or liquid ink of the office digital color printing market. Xerox has jet printing are: devoted formidable resources to the promotion of solid 1.Simple design. The device consists of just three major ink jet printers and MFPs, with gratifying results. Among parts: the printhead, the print drum and the controller. the latest devices are Xerox’s: This simplified design reduces the chance of failure. 2.Easy to use. There is no need to remove or Solid Ink Color Printer List Price install the printhead and therefore no spilling. A ColorQube 8570 $599 short paper path reduces the chance of jamming. $2,599 Solid ink sticks are easy and clean for convenient ColorQube 8870 installation by the end user. ColorQube 9201/9202/9203 $23,900/$26,900/$29,900 3.Wide range of applicable media. Solid ink can ColorQube 9301/9302/9303 $22,299/$25,299/$28,299 form images on various media. 4.Faster than conventional office ink jet printing. Phaser 8400 $499 Elimination of drying time enables current models Phaser 8560MFP $1,499 to output up to 55 pages per minute. 5.Vivid color. Because the solid ink does not Phaser 8860MFP $3,999 penetrate into the paper media, images are held up T h e m a r ke t f o r s o l i d i n k j e t c o l o r p r i n t e r s i s on the surface, producing brilliant color. 6.Less waste. The printhead of a solid ink jet printer increasing. In 2007, Xerox invested USD 24 million is a permanent part that does not have to be replaced to build a new plant facility for its solid ink products. This additional manufacturing capacity will enhance frequently. 7.Environmentally friendly. Solid ink sticks are made the company’s total output of solid ink by as much as from rosin rather than a petro-based resin. The sticks are tenfold. Media Sciences International of Oakland, New non-toxic, therefore safe for handling. There is no ozone Jersey is the only competitor to challenge Xerox for emission as occurs in electrophotographic processes. its aftermarket ink stick sales. Over the past 15 years the 1996 startup saw its revenues increase, peaking Disadvantages Although the solid ink technology is quite suitable at USD 24.2 million in 2008. In 2001, the company for office or workgroup users, the technology still has settled its first round of litigation with Tektronix over a patent infringement complaint. In 2006, Xerox several disadvantages. 1.Long warm-up time. These devices generally take initiated a second round of litigation asserting that Media Sciences’ compatible ink sticks for the Xerox several minutes to print from a cold start. 2.Power consumption. About 50 watts are needed to Phaser 8500 and 8550 violated Xerox patents. Onerous maintain the solid ink above its solidification point, legal fees in the ensuing battle, coupled with a cease and desist order, are believed to be the cause of Media even in the sleep mode. 3.Excessive Ink Usage. Vacuum pump is used to purge Sciences’ Board adopting a resolution on May 18, 2011 the printhead, and some excessive inks will flush into a to liquidate and dissolve the corporation. While some residual inventor y of Media Sciences waste tray. However, all four colors of inks are dumped in the same tray which consequently formed a single ink sticks remains to be sold in the marketplace, it appears there is clear sailing ahead for Xerox in this solid mass that cannot be recycled. 4.Damage from moving. Moving the printer before most profitable and promising niche of the office digital color printing market. cool down completes can damage its components.

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Recycling Times Magazine

Features

Media Sciences: once a rising star, now a setting sun Media Sciences International Inc., once a shining success in the non-OEM digital color printer consumables industry, is fading into the sunset. Since 1996, the company chalked up an impressive record as the only aftermarket alternative to solid ink stick supplies for Xerox’s Phaser and ColorQube solid ink jet printers. (The solid ink jet printing process is described in a Tutorial in Page 20.) This was a bold move, considering the thicket of patents that Xerox acquired when it purchased the Color Printing and Imaging Division of Tektronix, Inc. in 2001. The early years M e d i a S c i e n c e s b e g a n i t s s t a r- c r o s s e d j o u r n e y by producing solid ink products compatible with Tektronix’s solid ink printer, and later diversified by entering the color toner cartridge business. In its peak years of 2006 to 2008, Media Sciences reported revenues in excess of USD 20 million. However, its promising path took a bad turn in 2006 when it lost a costly legal battle with Xerox over a patent infringement action. After that, its promising journey became a path to perdition. In its early years as an arm of graphics distributor Cadapult Graphic Systems, Media Sciences discovered the niche market of solid ink supplies and developed rapidly from the profit provided by this market. The firm later broadened its portfolio to include color toner cartridges, specializing in the market for non-HP and non-Canon laser cartridges. It went public with an IPO Media in 2006 with shares trading on NASDAQ. Sciences struggled for its survival in recent years, especially in 2010 when it chose a series of strategic moves, including a business partnership with Cartridge World, the acquisition of Hong Kong-based Master Ink, and the sale of its color toner cartridge business to Katun Corporation. However, the overwhelming cost of its legal battle with Xerox over a complaint alleging infringement of the company’s ink stick patents, dissent and discord within its senior management staff and within its Board of Directors, also contributed to the company’s demise. Liquidation and dissolution On May 18, 2011, Media Sciences’ Board of Directors adopted a resolution authorizing its officers and directors to take such actions as are required to liquidate and dissolve the corporation. The resolution was announced publicly on May 23, 2011.

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July 2011 | www.recyclingtimes.com.cn

The firm announced a special one-time cash distribution of 39 cents per share to shareholders of record as of May 31, 2011. Marc Durand, Media Sciences' President and Chief Executive Officer, stated, "Now that the company has sold its toner business and settled its solid ink litigation, the Company's board has decided that the appropriate course of action is to make a cash distribution to shareholders and to wind down the company through a liquidation and dissolution process." Media Sciences says it currently has about USD 12.5 million in cash, which will be used to pay the company’s current obligations and wind down the business. The firm says it may make some additional payments to shareholders as well as a final distribution once the business is liquidated, but given the uncertainties and risks associated with the intended wind down, there is no guarantee of any further or final distribution. How could such a shining success story end up in a tragic liquidation? Part of the answer may lie in its financial performance during recent years. Financial performance As a matter of fact, annual revenues reported by Media Sciences from 2002 to 2008 are not bad. The figures (see chart below, courtesy of Actionable Intelligence) showed a stable uptrend that reached a peak of USD 24.2 million in 2008. But when the global financial crisis swept the world economy in 2009 the revenues dropped 10.3% over 2008. Compared against other enterprises, such a drop in revenue was not all that serious. By 2010, Media Sciences walked away from the crisis with annual revenues of USD 21.9 million, up 1% year over year. The real problem that haunted Media Sciences was not annual revenue, but net earnings ( profit/loss). Since 2002, we can see this attribute trace an arc-like trajectory, indicating a growing instability. From 2002 to


Recycling Times Magazine

Features

2010, while revenue increased by 58.7%, the rise did not boost earnings. On the contrary, earnings dropped from a deficit of USD 0.2 million in 2002 to a loss of USD 3.6 million in 2010. What is even more confusing is that in 2008, when sales increased from USD 22.5 million the previous year to a record USD 24.2 million, net profit dropped from USD 0.8 million to a loss of USD 1.8 million. Additionally, it dropped further to a loss of USD 3.6 million in 2010 after the purchase of Master Ink.

A struggle for survival The fall in net profit prompted the company’s Board of Directors and key executives, to make a series of strategic adjustments in 2010 in order to save the once successful non-OEM enterprise. In that single year, Media Sciences made two bold moves, tr ying to pull the company out of its death spiral, but in the end those strategic moves proved futile. 1. Partnering with Cartridge World In January 2010, Media Sciences announced a strategic partnership in which Cartridge World was offered 100% new build color toner cartridges and solid inks by Media Sciences. The offering covered supplies for more than 70 different printers and MFPs from Dell, Epson, KonicaMinolta, OKI, Ricoh, Samsung, and Xerox. Based in California, Cartridge World is the world's fastest growing ink and toner refilling retailer and franchisor with nearly 20 years of experience and over 650 locations in the US and over 1,700 worldwide. A business-to-business (B2B) focus in the color laser supplies market provides Cartridge World growing strength in the small and medium business (SMB) segment, where color laser technology is in high demand. For any compatible consumables manufacturers, such cooperation is definitely a promising deal with enormous market potential. Hence, this co-branded partnership promised a significant retail presence for Media Sciences, and a significant growth opportunity

in the color laser supplies market for Cartridge World’s growing base of SMB customers. Vince Kelly, Media Sciences Vice President of Sales at that time, commented "We are pleased to have entered into this relationship with Cartridge World. They are well known for their high quality product offering and superior customer service. Supplies for business color laser printers is the fastest growing segment of the imaging supplies market, and small businesses are adopting this technology rapidly. This partnership provides Media Sciences with incremental distribution, and it positions Cartridge World to offer their customers a substantial savings versus the printer manufacturer's supplies, without sacrificing product quality or technical support." 2. Acquiring Master Ink At the end of April, 2010, Media Sciences acquired Master Ink Co., Ltd., a Hong Kong-based manufacturer of new build toner cartridges, inkjet printer cartridges, inkjet refill kits and patented next generation automatic ink refill systems. The acquisition agreement with Master Ink and its affiliates was to acquire substantially all of Master Ink's assets including its China-based manufacturing facility. Consideration for the acquisition included USD 1.15 million in cash (USD 250,000 due at closing, the balance with accrued interest due on the second anniversary of the closing), a 10% override on Master Ink revenues until the note is repaid and one million shares of Media Sciences International common stock. Media Sciences expected the acquisition to be accretive to its earnings in the first quarter following the close. At that time, Master Ink had about 140 employees, and was capable of in house tool making, injection molding, wire forming, stamping and vacuum forming. The firm had annual revenues of USD3 million and a gross margin of about 38%, while its operating expense before the acquisition was approximately USD 1.1 million. Media Sciences' President and CEO Michael Levin commented, "This is a transformative acquisition for Media Sciences as it provides us with many strategic benefits that significantly increase our competitiveness. Specifically, the acquisition provides us with the lower cost manufacturing platform we have been seeking to develop, while increasing our ability to control quality and our intellectual property. In addition, we expect the acquisition to accelerate our time to market and increase our rate of new product development, while reducing new product capital expenditures. The acquisition provides us with the control and cost www.recyclingtimes.com.cn | July 2011

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structure to develop more products more quickly, build quality into products instead of checking it after a product has been built, better manage our inventories, be more flexible to meet changing customer demands, pursue markets that have been otherwise impractical, and regain the operating leverage and cash generation that are inherent in this recurring business of printer supplies." Levin continued, "We have been working with Master Ink to develop tooling for a broad range of Media Sciences' toner based products and as a result, upon closing we expect to enjoy an immediate reduction in the cost of our existing toner based product line. We are confident this acquisition will significantly improve our business model, and we look forward to concluding the acquisition in the coming months." Levin’s words may infer that Media Sciences’ out-of-control production cost in the U.S. is what worried them the most. Media Sciences claimed that this acquisition was definitely promising, but actually prior to the acquisition of Master Ink, sources advise, Media Sciences was planning to build its own factory in Mainland China, hoping to lower their production costs. Allegedly, the factory was built in Dongguan, Guangdong Province, and plant equipment had been purchased. For some unexplained reason, Media Sciences was forced to sell all the purchased equipment before the factory could be brought on stream. According to a reliable source, the decision to abort the operation was quite complicated, but never revealed.

As a result, the acquisition of Master Ink was conducted after a detour that wasted much effort and resources. Media Sciences expected the acquisition to be accretive to its earnings in the first quarter following the close and to improve the confidence of its shareholders back in US. Sadly, things just went against their expectations. The turning point After its common stock was listed on the NASDAQ, Media Sciences’ bid price rose to a peak of USD 7.00 per share, but its price turned and was going down steadily. By May 2010, it had dropped below USD 1.00 per share, the minimum set forth in NASDAQ rules. On May 10, 2010, Media Sciences, after meeting with the NASDAQ's Listing Rules Committee, was granted a temporar y extension of time to comply with the USD 1.00 per share minimum bid price requirement. To meet the NASDAQ requirement, Media Sciences could have declared a reverse stock split, but determined such a move was not in the best interests of the firm or its shareholders. The stock was delisted on July 22, 2010. It recently traded for only $0.14 per share. Michael Levin stated, "We are disappointed that we are being delisted from the NASDAQ Stock Market. Our focus continues to be on growing our business and while this might appear to be a set-back, I am very optimistic that the initiatives we have in place and the upcoming closing of our China acquisition will greatly enhance our business. We will continue to be accessible and keep shareholders and potential investors informed of our progress." Selling toner business to Katun Four months after its stock was delisted by NASDAQ, Media Sciences made a shocking decision to sell one of its two core businesses. Sale of its color toner business to K atun Corporation had been arranged. In November, 2010, Media Sciences Inc., a subsidiar y of Media Sciences International, Inc., entered into an Asset Purchase Agreement with Katun Corporation and one of its subsidiaries. Under the terms of the APA, Katun purchased assets used in the toner business of Media Sciences Inc., including, inventor y, fixed assets, and intangibles (including the business name and trademarks) for approximately USD 11 million. Simultaneously, Katun and Media Sciences also entered into a master distribution agreement

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under which the parties agreed that Katun will be the exclusive worldwide distributor of Media Sciences’ solid ink products for use in Xerox color printers for a period of 3 years. The parties also entered into a license agreement allowing Media Sciences and its affiliates to continue using its business name and websites for up to two years. Media Sciences also announced changes in its leadership team, including the departure of Michael W. L evin and Robert Ward, its former CEO and COO, respectively. Effective immediately, Marc Durand was appointed CEO. Mr. Durand was formally VP of Operations. In addition, its CFO, Marc Applebaum, would leave the firm at the end of the calendar year. Denise Hawkins, Media Sciences’ long time controller, would become CFO. At that point, Media Sciences had sold its color toner cartridge business; its remaining core business, the solid ink for use in Xerox printers, has been haunted by patent infringement lawsuits for years. If there is any unfavorable outcome from the lawsuits, Media Sciences will become a non-OEM supplies vendors without a line of non-OEM supplies. The last straw In April 2011, only 5 months after selling its color toner cartridge business to Katun, Media Sciences’ solid ink business came to an end as well. Loss of the solid ink patent infringement lawsuit, which actually lasted for over a decade with Tektronix and later on with Xerox, was the last straw for Media Sciences. Since its selling of solid ink products, Media Sciences has been charged with patent infringement by first Tektronix, the inventor of the solid ink printing technology, and then Xerox, who obtained all the patents related to the solid ink printing technology after the acquisition of the Color Printing and Imaging Department of Tektronix in 2001. The first round of the litigation was settled back in 2001, but in 2006 Xerox filed another patent infringement complaint in the U.S. District Court, asserting that Media Sciences’ compatible solid ink sticks for the Phaser 8500 and 8550 violated various patents related to the shape of the ink stick and the ink stick feed channel. Media Sciences contested these allegations and made various counterclaims, asking the court to invalidate Xerox’s patents and find Xerox

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in breach of contract for violating terms of its 2001 settlement agreement. Media Sciences also accused Xerox of unfair competition, commercial disparagement, deceptive trade practices, trade libel, and antitrust violations. The second round of the litigation lasted until April 2011, when the two parties involved finally reached a settlement. However, that settlement proved to be a final blow to the remaining core business of Media Sciences. The ter ms of the settlement agreement between Media Sciences and Xerox call for Media Sciences to stop manufacturing solid ink sticks for use in Xerox color printers and MFPs, and to turn over its industrial ink assets and inventory to Xerox. Media Sciences has also assigned certain patent and intellectual property rights to Xerox. The termination of solid ink production has also terminated Media Sciences’ master distributor deal with Katun made in 2010 when selling its toner business and Media Sciences is likely to face a penalty of USD 250 thousand for the early termination. Conclusion The rise and fall of an entrepreneurial odyssey is inevitable in this world of fierce competition. Therefore, the demise of Media Sciences should be a lesson to the rest of the players still on their tracks in the imaging supplies aftermarket. Out-of-control costs, competitive price pressure, existing patents, failed strategies, and anti-competitive measures, are some of the problems that eventually brought down Media Sciences. Perhaps this is a good time for the rest of the enterprises in the industr y to learn and improve from the lesson. Let them take stock of their business operations and policies, their finances and future prospects. Only then can they guard against falling victim to the industry’s grim reaper.


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HP versus Xerox: small acquisitions, big revelations The end of May was marked by two acquisitions by OEM printer giants. HP acquired US based Managed Print Services (MPS) provider, Printelligent, while Xerox snapped up UK print consultancy and software solution provider, NewField IT. Mergers and acquisitions are nothing new for industry giants, but HP and Xerox’s moves to acquire MPS companies in less than 24 hours of each other were no coincidence and a new MPS war could be sparked by this consolidation. HP and Printelligent Printelligent is headquartered in Salt Lake City, Utah. Since 1993 it has provided MPS services for clients across the US through a network of MPS channel partners. It offers its SME clients MPS infrastructures, software and personnel. According to its official website, Printelligent has conducted business in over 700 cities in 39 states, managing about 500 million printed documents annually. There’s no doubt, Printelligent is a mature MPS provider. Printelligent may bring proven MPS infrastructure, software and human resources to improve HP’s MPS capability in terms of assessment, optimization, marketing and ser vices expertise infrastructure. In addition to its cloud-based InCommand platform, HP will be able to offer a set of differentiated MPS solutions and services. Before the acquisition, Xerox’s XPPS (Xerox Partner Print Services) was the only provider of a Cloud MPS platform available to multi-brand resellers, enabling them to manage a multi-vendor environment. The acquisition of Printelligent may allow HP to equal XPPS and will provide HP channel partners with a wealth of scalable multi-vendor MPS capabilities. Back in 2009, HP said it ‘would form a new group to step up managed print services and start a program to help business customers reduce printer hardware’. The company already offered printing services at the time, but the dedicated business unit was expected to add to that focus. And now we can see its acquisition of Printelligent is exactly one of the steps that could realize that strategy. Although HP has refused to detail the value of its acquisition, we can at least conclude the following benefits from the closing of this deal:

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(1). HP will be able to provide its channel partners with multi-vendor MPS capability. (2). Printelligent’s influence in the SME market will enhance HP’s market share. (3). HP’s channel MPS capabilities in the US will be significantly improved, and similar set of services to HP’s European channel will be possible. However, in the light of a strong presence of Xerox’s MPS in the Europe, this process may take some time. Xerox and NewField IT Less than 24 hours after HP announced its acquisition, Xerox announced that it had acquired NewField IT, a print consultancy and software solution provider, as its wholly owned subsidiary. NewField IT has gained its reputation in the industry as a print assessment provider. Most printer and copier vendors have been using its flagship Asset DB technology to assess printing environments and optimize MPS designs on makes such as HP, Xerox and Ricoh. Asset DB covers the complete gamut from graphical floorplan based data collection to future state design of an optimized print environment.


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Xerox’s acquisition of NewField IT aims to cement the existing long-term partnership between the two companies. NewField IT’s Asset DB underpins the assessment and optimization capabilities of XPPS. The XPPS hosted MPS infrastructure was developed over a year ago to provide channel partners with a set of tools to manage every element of an MPS contract – including sales pursuit, device discover y, optimization and service delivery. Stephen Cronin, president of Xerox’s Global Document Outsourcing business, said in the latest press release ‘NewField IT’s Asset DB is a user-friendly software, which speeds up some MPS implementations by up to four times. This will accelerate the return on the MPS investment for all our clients, helping boost business growth as they reinvest the costs savings into other areas of the business’. As with HP, the acquisition value of NewField IT has not been released, but the strategic benefits from it are quite clear: (1). Xerox will have better, more comprehensive MPS than its competitors, even though HP has strengthened its MPS offering by acquiring Printelligent, (2). NewField IT used to serve neutrally for Xerox, H P, R i c o h a n d o t h e r M P S p r o v i d e r s . T h e X e r o x acquisition could therefore weaken the position of these competitors. NewField IT claims that it will retain its independence, but only time can tell what neutrality really is. Xerox’s acquisition of NewField IT could be deemed as a small one, but it certainly has a huge potential to enhance Xerox’s MPS revenue. Market outlook Both OEM giants refused to expose more details of their acquisitions, but it is plain that their strategies and targets are the same – expanding the MPS market for SME and midsize organizations via the MPS channel. In Europe and America, MPS has been well-recognized by enterprises of all sizes and has become an important trend in the office market. After years of development, the market is increasingly likely to be dominated by a few heavyweight players. Currently, SME and midsize organizations are providing the growth momentum for the industry. Success in the large enterprises market has driven Xerox to replicate this in the SME and midsize segments. In the other corner of the ring, HP is also longing for a bigger market share in this sector to reverse its disadvantage in the

large enterprise market. So, a fierce battle between the two giants is inevitable. The MPS market for SME and midsize organizations is different from that of large enterprises in that it is more dependent on the channels. In order to be successful in the SME and end user markets, vendors will have to provide channel partners with simple and flexible tools as well as an infrastructure that can facilitate the sale, delivery and management of MPS on an ongoing basis. For instance, a simple and effective MPS cloud platform that can deliver remote monitoring, consolidated billing, supplies and service and reporting across a multi-vendor environment for channel partners is more and more likely to be a must for all vendors competing in this arena. No doubt, Xerox has had a good head start in the MPS infrastructure for its channel partners and gained even more advantage by acquiring its long term partner, but HP has also made a good acquisition to level the playing field and strengthen its position in this arena. And let’s not forget that HP still has a strong relationship with the IT channel. For both vendors, the key to success lies in their channel partners’ capabilities to deliver MPS to clients. According to MPS Insights, there is no doubt that consolidation will continue in the industry, and MWA Intelligence, PrintFleet (and) Print Audit will be looked at closely as acquisition targets in the near future since they stand out as the top independents remaining. The MPS market has a great influence on OEMs, channel partners and even the third-party consumables market since it has been deemed to be a growth area. Naturally, competition in such growth market will come to a period of consolidation and next to Xerox and HP, Ricoh and Canon the remaining major players in the race. These two acquisitions may turn out to be major tactical moves in the MPS war, but to what extent, we can only wait and see… www.recyclingtimes.com.cn | July 2011

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Profiles

An interview with Jim Cerkleski, CEO of Clover Holdings, Inc. Fo u n d e d i n 1 9 9 6 , C l o v e r Te c h n o l o g i e s G r o u p is now the global leader in the recycling and remanufacturing of imaging supplies and small electronics. Clover is also the world's largest collector and recycler of cell phones, inkjet and laser cartridges. With annual revenue of over USD 600 million, Clover is one of the fast growing, private held companies in the United States. O n A p r i l 1 4 , 2 0 1 0 C l o v e r Te c h n o l o g i e s G r o u p was acquired by Golden Gate Capital (GGC), a San Francisco-based private equity fir m. Since then, Clover has expanded rapidly through a number of acquisitions. The companies acquired by Clover include Environmental Reclamation Services (ERS), Depot America, Pinpoint, Reclaim-it, and Office Products Recycling Associates (OPRA). Recently, Recycling Times had an opportunity to inter view Jim Cerkleski, Chief Executive Officer for Clover Holdings, Inc, who is responsible for providing strategic vision and leadership for the company as well as overseeing sales, business development and strategic alliance initiatives. In 2000, Cerkleski purchased 60% of Clover's stock and has led the company from the annual revenue of USD 5 million to the revenue that now surpasses USD 600 million annually. Since being acquired by GGC, what have been the major changes at Clover and how will they affect the company’s strategic development? Cerkleski: As an investment partner, GGC has a history of investing in well-managed companies that not only have a proven track record of success, but that can also benefit from a relationship with GGC. This has certainly been the case at Clover. Our ongoing success in the imaging supplies aftermarket provides us with a strong, stable platform for organic growth, while the relationship we now have with GGC provides us with the means to implement an aggressive acquisition strategy as well. GGC has

▲ Jim Cerkleski

incredible resources and has been very supportive of our growth strategy. Over the last year, Clover had an ‘acquisition spree’. The companies acquired include printer parts suppliers, empty cartridge and mobile phone collectors, even a mailing machine compatible supplies manufacturer. What is the strategy behind these acquisitions? Cerkleski: Our acquisition strategy has remained consistent throughout our histor y. We seek to add companies to the Clover family that allow us as an organization to either A) use our organizational strengths and/or access to capital to unlock value in the target company that would have otherwise been unrealized or B) bring diversification to the Clover family via new product segments, an expansion of our customer base, or an expansion of our geographic reach. This strategy has proven very successful in the past and continues to create value for our customers and for our shareholders. www.recyclingtimes.com.cn | July 2011

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Profiles

What factors does Clover take into consideration when acquiring a company? C e r k l e s k i : T h e r e a r e f o u r ke y f a c t o r s t h a t w e t a ke i n t o c o n s i d e r a t i o n i n o u r d e c i s i o n m a k i n g process. The first is the company culture at the target company, and whether or not we feel the management team at the company we are acquiring will fit with the current team at Clover. The second consideration is the strategic value proposition of the target company, or more specifically whether or not the company advances our goal to be the leading global supplier of vertically integrated environmental solutions. Further down the list, geographic location and management expertise are also key factors when we consider an acquisition. Each of the companies that we have acquired has met these criteria, simplifying integration into the Clover family. The key components for printer supplies, such as chips, OPCs and toner, were not in your ‘shoppinglist’ for acquisition. Why? Cerkleski: Clover has cultivated strong relationships with our strategic partners over time, and we continue to review each of their value propositions as time goes on. To this point, we have not considered it an advantage to bring these types of solutions in house, based on the strong value propositions brought to Clover by our suppliers.

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As long as our suppliers continue to bring cost competitive, quality products and services to Clover, we will not need to bring these types of solutions in house. Many companies outsource when they want to reduce cost and increase profit. How do you see outsourcing versus acquisition and why does Clover prefer acquisition? Cerkleski: While outsourcing production or any other aspect of a business can certainly hold cost benefits, it also comes with its own set of risks. Clover has been able to control its own destiny by managing all of our own business units. We have determined that in order to consistently deliver the product quality, world-class service, and solutions that our customers want and deserve, we must maintain control of our business.

During the process of these various acquisitions, what is the biggest challenge you have encountered? How did you overcome it? Cerkleski: The greatest challenge we have faced, I believe, was the integration of Image1’s parts business into the Clover family. Up to that point, our acquisition activity had focused solely on businesses that either produced or collected print cartridges, m u c h l i ke o u r s e l v e s . T h a t m e a n t t h a t w e c o u l d readily add value to both Clover and the acquired companies through skills transfers and shared activities between business units. With the parts b u s i n e s s , h o w e v e r, these types of synergies with our existing business were not as readily apparent due to differences i n p r o d u c t s offered, customer expectations and other similar Global Headquarters - Hoffman Estates, IL, USA


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considerations. The acquisition of a second printer parts company, Depot America, gave us the opportunity to add value once again through skills transfers and shared activities, this time between Image1 and Depot America. The combination of Image1 and Depot America allowed us to launch the first truly global parts distribution company, Depot International, in March 2011.

â–˛ Global Headquarters - Ottawa, IL, USA

Many people believe the aftermarket printer supplies industry has reached its peak. Why does Clover still put so many resources into expanding? What is your vision for the future development of the industry? Cerkleski: Although it is clear that the printer industr y has hit a sort of plateau, the market is still dominated by the OEMs. We remind ourselves often that we as a company have barely scratched the surface and that the potential growth for our company is still in the billions! O n e o f C l o v e r ’ s b u s i n e s s e s i s M a n a g e d Pr i n t Services. What opportunities are there in MPS for aftermarket companies? Cerkleski: MPS is here to stay and is impossible to ignore. At Clover, we see MPS as yet another opportunity for us to help our strategic partners secure business and maintain profitability. It also provides us with a perfect opportunity to continue our expansion in printer parts and accessories. What do you think of cloud printing technology? Cerkleski: Cloud printing is something that we are definitely paying attention to. The OEMs have identified the cloud as an opportunity for the printing industr y to continue to evolve, and are

allocating resources in that direction. From Clover’s perspective, if the cloud is important to the OEMs, it is important to us as well. What new products or services will Clover bring to its customers over the next couple years? Cerkleski: Clover is always looking for new ways to bring value to our customers. We are continually researching potential additions to our portfolio, as well as new solutions that add value to our partners. Our overarching goal is to find a way to take back any device that can be brought back to a usable state and kept out of our already over-burdened landfills. Clover is based in North America and has locations in Portugal, Ireland, Singapore, Vietnam, Australia and New Zealand. What regional markets do you think have the most potential? Cerkleski: Clover has found potential in a number o f i n t e r n a t i o n a l m a r ke t s , a l t h o u g h m o s t o f o u r acquisition activity has taken place in North America based on the fact that the majority of our team is here. That said, Clover has already identified several opportunities for international expansion and continues to evaluate further international expansion as time and resources permit. We will continue to expand globally and devote resources to different markets if the demand for our products exists. www.recyclingtimes.com.cn | July 2011

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Sales & Management

Three steps to refresh older employees Many years in the workplace gives older employees a better social network and range of working experiences, which are likely to give them the respect for upholding the image and spirit of the company. However, the routine of ordinary life and repetitive work will gradually erode their enthusiasm and unconsciously nurture passive work ethics and attitudes. Familiarity with their work potentially can become a bottle neck for their improvement. Several studies have been conducted looking at the relationship between employee quality and corporate performance. Employees in medium sized companies are achieving less than15% of their potential. So it is quite important for managers to help their employees realize their potential by making a better contribution to the company. while employees believe that a better career development To activate the creativity of old employees Receiving fixed salaries and doing repetitive tasks are what space and a good salary and welfare are the main reasons for kills older employees’ enthusiasm. However, managers older employees to stay in a company. (Figure 1) may unknowingly contribute to the poorer work output simply because they are so satisfied with the stability of their older employees, which in turn stopped them from further development of those employees’ potentials. By maintaining the older employees’ existing status, it has prevented their further growth in the workplace. Abraham H. Maslow, the famous psychologist who proposed the Maslow’s ▲ Figure 1 Survey on the motivation of old employee (Source: 51job.com) Hierarchy of Needs, divided the needs of human beings into five stages, namely physiological A good motto for human resource managers to adopt for needs, the safety needs, love and belonging, esteem and all employees is “To give you a performance stage without self-actualization. The five stages of needs are achieved step a limited ceiling”. As a manager of a company, one must by step by older employees, who want to reach the final have a deep understanding about the career development stage of self-actualization. needs of its employees and try to give them prospects In August 2008, the salary research department of 51job. for future development. Companies should refresh and com conducted a special survey on the employees and the motivate older employees by trusting their abilities, and corporate perspectives concerning the motivation of older then to empower them by giving them new challenges to employees. The survey has showed there are great cognitive realize their potential. Of course, assisting the motivation differences between the HR managers and the employees process with monetary encouragements is also preferable. about the why an employee should stay in a company. 42% Some companies have awarded some shares to their older of HR managers believe that employees will choose to stay in employees, to further promote the company’s interests with a company because he or she can do the current work well, its employees and to motivate older employees to work www.recyclingtimes.com.cn | July 2011

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Sales & Management better and smarter for the company.

Showing both leniency and authority appropriately When talking about how to govern a country, Confucius once expressed that the governor should use leniency and authority as complementary ways to govern people. If leniency and authority can balance each other, then the governance will be harmonious. This same thinking can be used by managers as well. An excellent manager of human resources will skillfully exercise both leniency and authority with older employees. To extend leniency Managers should respect and care the feelings of older employees in the daily working environment, and let them know that their efforts are known and appreciated by their supervisors. By doing so, the willingness of older employees can be enhanced at the same time. To extend leniency is not necessarily related to a huge amount of financial benefits, and there are two aspects to be considered: a. Managers should respect the opinions and suggestions proposed by older employees and be good listeners to their ideas and suggestions which may increase their participation to the decision making processes of the company. Meanwhile, appropriate encouragement can increase their recognition and sense of ownership in the company. For example, during the 10th anniversary of Ninestar Image, the general manager, Mr. Wang Dongying awarded older employees who had served the company for 10 years, the Best Contribution Award. b. Managers should treat all employees equally and try to build relationships with older employees by providing appropriate care and support in their daily lives (based on the cultural background, especially concerning the idea of privacy). In China, paying home visits to employees who are sick or during national holidays for conciliation or celebration is acceptable. Showing care and concern about the schooling of children and the health conditions of families of old employees are also normal practices. The manager may also offer financial support to employees who are suffering difficulties. To establish authority The manager should also know the establishment of authority and management is another important issue. The establishment of authority will remind older employees of appropriate workplace conduct and how to avoid inappropriate behaviors such as ignoring more junior employeers. All employees, whether they are older, younger, highly respected or regarded badly by others, should be treated equally in terms of principles and disciplines. Carelessness of work and poor workplace behavior should be disciplined equally or respect for management will be damaged. The father of modern management, Chester Barnard, believes that the establishment of authority and authority systems are the core of management. a. The manager should establish an image of authority, which includes both expertise and working attitude. The authority in expertise can make employees treat their work seriously and professionally, while the authority in working attitude can prevent employees from becoming too familiar with the

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managers. b. To establish a complete and healthy corporate management system is always better than counting on personal authority. Managers should make it clear that all employees are equal and no personal favoritism exists. Early in the life of a company, the operations are established by the personal authority of the managers, but when the company grows bigger, the establishment of a management system becomes more important and necessary, as governance based on personal authority, such as the lack of discipline and the favoritism, will become more prominent. Providing learning and training for old employees The founder of Panasonic, Matsushita Konosuke, believes genius entrepreneurs always know when to put the training and developing of employees as a priority on the agenda. And they always develop their talents before they develop their products. However, it is easy for a manager to make the mistake that their older employees are already familiar with the company and their job and there is no need to devote more time and resources to train and develop them. On the one hand, many older employees are not satisfied with the same work and are eager to find new opportunities to achieve selfactualization. On the other hand, the lack of thinking and working smarter is easily formed among older employees, preventing them from getting in touch with the new information and technology and consequently stopping them from self-improvement. It is therefore quite important for enterprises to actively urge and motivate older employees by providing opportunities and training. Employee training should include personal development as well as corporate development. As an excellent manager, the strategic vision about employee development is a must. The manager should not care too much about the spending of time and resources on employee development. Regular and spontaneous training programs should be provided to employees in any possible way. Attention should be paid to the differentiation of training programs for new and older employees. The training for new employees should focus on corporate culture, working attitude and guidance. The training for older employees should aim at the training of new thinking and skills which can facilitate their individual need for self-actualization. Conclusion To refresh and motivate your older employees to maximize their potential, you must remember the three steps: 1. Activate the potential of employees by providing new opportunities or challenges; 2. Extend both leniency and authority appropriately to stabilize them; and 3. Facilitate their self-actualization by providing learning and training opportunities. Practice these three steps, and you may find yourself surrounded by energetic, enthusiastic and skilled older employees with devotion to contribute more to your company.


Recycling Times Magazine

Legal Issues

Case Study: Epson’s patent infringement lawsuit in China It is well known the OEMs have taken a series of actions to protect their rights in recent years. They continue to do all they can to prevent patent infringement activities against compatible consumables enterprises in China. In the last year, the OEMs, including Canon and Lexmark, have intensively requested for Section 337 investigations to USITC and filed patent infringement lawsuits in the US courts. Epson commenced even earlier and has taken actions to protect its patents in China. In this article, you will read a brief case study of one of Epson’s patent infringement lawsuits in China. In order to protect the rights of the respondent in the case, the respondent will be called as “R Company”. The lawsuit between Epson and R Company started at the end of 2006, when Epson consecutively filed three patent infringement lawsuits against R Company in an Intermediate People’s Court in Beijing, concerning Patent No. 200410001693.2 and 01143328.0. Epson claimed that the ink cartridges manufactured by R Company infringed Epson’s patent rights and caused great financial losses. The complainant and the respondent in all three lawsuits are the same, the differences in each case are the actual patents and products. Epson based its claims on Dependent Claim 2 From the outset, Epson, in its statement of allegation, directly based its claim of patent infringement on Dependent Claim 2. According to the Implementing Regulations of the Patent Law of the People’s Republic of China, “claims shall have an independent claim, and may also contain dependent claims. The dependent claim shall outline the technical solution of an invention or utility model and state the essential technical features necessary for the solution of its technical problem. The dependent claim shall, by additional technical features, further define the claim which it refers to”. You can conclude from these regulations that a dependent claim may include a completed technical solution. The formation of a dependent claim is relatively simpler than an independent claim, and therefore becomes a dependent claim of the independent claim, which is regulated solely for the convenience of the application. As a matter of fact, each of the claims shall be a completed and independent technical solution

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that under the patent protection of patentee. This means, it is not against the law and not against the public interests that the complainant voluntarily chose to base its claim on the dependent claim instead of the independent claim. The People’s Court should permit this claim. The Claim 1 in the application of Patent No. 01143328.0 included the super-ordinate feature of “Negative pressure generation device” and its Claim 2 is the further illustration of such “Negative pressure generation device”, which “contains a thin film differential pressure valve”. The ink cartridge manufactured by R Company also contains a thin film differential pressure valve, which means the ink cartridge product series manufactured by the respondent had the same feature of the technical feature claimed by Claim 2. Under such a circumstance, the complainant, Epson, chose to base its patent protection claim on Claim 2 - a practice that could easily show the patent infringement fact of the accused products to the judge, and to avoid any dissent generated during the illustration of the claim, which might force the respondent to admit patent


Recycling Times Magazine

Legal Issues

infringement during the defense. In addition, the Dependent Claim 2 had a relatively narrower amount of patent protection than Independent Claim 1, which gave an even stronger case for the claimant. If the defendant requests for patent invalidation during the defense, should the lawsuit be suspended? According to Article 11 of the Several Provisions of the Supreme People's Court on Issues Concerning Applicable Laws to the Trial of Patent Controversies (effective on July 1, 2001), if the defendant requests for invalidation of a patent during the responding period of the defense of the patent infringement cases for the patent for utility model or design, the People’s Court may not suspend the litigation. In Epson’s case, the Beijing Intermediate People’s Court rejected the respondent’s request for suspension of litigation according to the above provision. The invention patent is awarded by the State Patent Office after substantial examination, and therefore its validity is relatively stable. It is most common for defendants to conduct a direct defense by requesting for patent invalidity in patent infringement lawsuits. In order to protect the patentees’ interests, to prevent the defendant intentionally prolonging the litigation, and avoiding the waste of manpower and financial resources, the Supreme People’s Court issued the above provisions. Epson chose to base its litigation on the invention patent, and this was a good choice for the acceleration of the litigation proceedings. Conclusion Firstly, Epson conducted very careful preparation before litigation. Epson had investigated over 60 models of ink cartridges involved in the three patent infringement lawsuits. Such an extensive scale of investigation reveals Epson’s determination to fight patent infringement. When choosing the patent for litigation, Epson selected the invention patent which would be least likely to be suspended (in fact, the court did not suspend any of the three lawsuits) and less likely for a prolonged delay brought on by the defendant. Epson also based its claim on the dependent claim, which would provide a solid foundation for litigation which would be accelerated by the judge’s recognition of the patent infringement fact. During the patent infringement lawsuit proceedings, the defendant’s defense of patent invalidation and trial invalidation, and the result turned out to be Claim 1 invalidated and Claim 2 remains valid. Secondly, Epson selected a good time to file the lawsuit. The offending ink cartridges were put into the market by the

beginning of 2005, and generally it takes about two years before the products reach a mature stage in the market. The products will have accumulated a certain percentage of market share and a certain amount of profit, and Epson’s legal actions against them at that time would ensure certain financial compensation and a strengthening of market share. As for the defendant, the patent infringement lawsuit brings additional expenditure, and losing a lawsuit could mean further large financial losses and reductions of market share. This would undoubtedly impact greatly on the defendants’ operations. As for other compatible manufacturers, the intensive litigation filed by Epson is like the sword of Damocles that will substantially intimidate the manufacture of infringing products by compatible manufacturers. To some extent R Company, as the defendant in this lawsuit, was unfortunate to be the direct target of Epson, as there are possibly some other compatible manufacturers in China producing infringing printing consumables. The Epson-R Company lawsuit experience should be a “wake up call” or learning experience for these manufacturers. Independent innovation is a national development strategy in China and should be the development strategy of all businesses and enterprises. Every company should be rooted in technological innovation, and should facilitate the improvement in product patent in quantity and especially in quality through the enhancement of innovation. Long term market competitiveness and profitability can be obtained by such independent innovation of core technologies and the appropriate protection of intellectual property. Any question about the case, please contact mail@innopat.com.cn. www.recyclingtimes.com.cn | July 2011

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Recycling Times Magazine

Tech Zone

Remanufacturing the Samsung ML1640 toner cartridge By Mike Josiah and the Technical Staff at Uninet Imaging First released in September 2008, the Samsung ML-1640 printer is based on a 16ppm, 600 x 600 dpi engine. The ML-2240 is based on a 22ppm, 1200 Dpi engine. Both use the same cartridge. The 108S cartridge is based on the cartridge design of the ML2010. They have a large handle which folds over the cartridge when installed. These cartridges do have a chip that must be replaced each cycle. This chip proved very difficult for the aftermarket to develop but it is available now.

Other than the toner cartridge, all the other consumables are rated for 50,000 pages. (Fuser, transfer roller, paper pickup rollers). That coincidentally is also the rated life for the printer. It seems Samsung considers both models throw away machines. These cartridges do not have a built in drum cover, but do come new with a thin black plastic cover taped around the cartridge. The replacement cartridge it self is rated for 1,500 pages at 5% coverage (ISO 19752). The starter cartridge is rated for 700 pages.

Printers based on this engine:

Samsung ML-1640 Samsung ML-2240 Cartridge:

MLT-D108S Required tools • Toner approved vacuum. • A small Common screw driver A Phillips head screwdriver • Needle nose pliers Required supplies • Samsung 1640 Toner • Replacement chip • Conductive grease

step >

Place the cartridge with the handle facing away from you. Remove the 2 screws on the left end cap.

2

Gently pry off the left end cap.

step >

1

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• Drum lubricating powder

3

On the front edge of the cartridge, there are two screws, remove them.

www.recyclingtimes.com.cn | July 2011

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Recycling Times Magazine

Tech Zone

step >

step >

Lift up and remove the waste chamber from the cartridge. Make sure the tab on the right side slide out of the slot. If you try to lift the cover off with out sliding the tab out, it will break off.

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step >

Slide the PCR away from the contact side, lift up and remove. Clean the PCR with your normal PCR cleaner. WARNING: Do not clean the OEM PCR with alcohol, as this will remove the conductive coating from the roller. If the PCR is an aftermarket, follow the cleaning methods recommended by the manufacturer. If the PCR is an OEM, we recommend it be cleaned with your standard PCR cleaner.

step >

4

8

14

5

9

Remove the OPC drum.

Remove the two screws and wiper blade from the waste chamber.

step >

step >

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Gently pry out the roller plate from the cartridge by pressing in on a tab located on the bottom of the cartridge. There is a spring that is in contact with the developer roller shaft. Move the tail of the spring up so that as the plate is lifted out, it will fall behind it.

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Remove the Developer Roller by lifting it out.

Remove the 4 gears, and place aside.

6

12

step >

Carefully pry out the fill plug. It fits tight and is easily damaged. Work a small jeweler’s screwdriver around the edge until the plug comes free.

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7

Remove the two screws from the right side end cap. Carefully pry off the end cap. July 2011 | www.recyclingtimes.com.cn

Clean out any remaining toner from the hopper.

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Remove the 2 screws on the doctor blade. On the fill plug side of the blade, there is the other tail of the spring. Lift it up while removing the doctor blade so it is not damaged. It is highly recommended that the Doctor Blade be cleaned. Failure to do so will cause streaking. Dampen a cotton swab with alcohol, and clean the blade. Be careful not to press too hard and damage the blade. If the blade has a heavy buildup of toner on it, clean it with Acetone, and then alcohol.

step >

step >

11

step >

step >

Clean out any remaining toner from the waste chamber. Re-install the wiper blade and two screws. Place the waste chamber aside.


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step >

23

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Tech Zone

24

step >

Install the PCR by sliding it through the large gear or non contact side, and into the contact hub.

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Clean the feed roller and any remaining toner from the hopper.

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step >

step >

Install the roller plate. Route the tail of the spring so that it sits on top of the plate and is in contact with the shaft of the developer roller. Lock the plate in place with the tab.

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Fill the hopper with the appropriate toner. Replace the fill plug, check for leaks.

Install the drum in place.

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step >

Install the gear side end cap, and 2 screws. Make sure the PCR fits correctly in its holder, and all the gears are aligned.

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22

Install the 4 gears as shown.

Clean out the old conductive grease from the PCR contact hub and replace with new. A small amount of grease is fine, more is not better when it comes to conductive grease.

step > step >

18

Install the developer roller, keyed end to the gear side of the cartridge.

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26

Instal the waste chamber by sliding the tab through the slot in the end cap. Rotate it down, and install the two screws.

step >

step >

step >

Re-install the doctor blade and two screws. Make sure the tail of the spring fits into the proper slot.

www.recyclingtimes.com.cn | July 2011

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Recycling Times Magazine

27

step >

Install the replacement chip by pressing in on the two chip tabs from the outside of the end cap. The chip cover will come free. Replace the chip and re-install the chip cover. Make sure it snaps in place.

step >

Tech Zone

28

Install the remaining end cap and two screws.

Printing test pages: Demo Page Press and hold the “CANCEL� button until all the STATUS LED blinks. A demo page will print out

Repetitive defect chart OPC Drum

75.5mm

Lower Fuser Roller

75.4mm

Upper Fuser roller

63.9mm

Supply Roller

47.5mm

Transfer roller

46.2mm

PCR

37.7mm

Developer Roller

35.2mm

Mike Josiah Mike Josiah is the East Coast Technical Director at Uninet Imaging. A global distributor of toner, OPC drums, wiper blades and other supplies. An industry veteran since 1987, Mike is a member of ASTM committee F.05, the STMC Technician Certification Committee as well as an STMC trainer. He regularly contributes articles and teaches seminars at association meetings and trade shows.

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