*NEWS*GENERIC CTGS HURT LEXMARK’S PROFITS

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*NEWS*GENERIC CTGS HURT LEXMARK’S PROFITS

 user 2005-05-02 at 12:17:00 pm Views: 77
  • #9316
    Generic cartridges leave mark on Lexmark
    profits

    April , 2005,
    US printer manufacturer Lexmark said on Tuesday that
    third-party printer cartridges are impacting its sales figures.

    Customers are increasingly buying lower-priced ‘generic’ ink
    cartridges, which has reduced Lexmark’s profits and revenue growth, according to
    the Financial Times. Lexmark reported a first-quarter operating profit of
    $161.7m (£84.94m) from revenues of $1.358 billion. This represents a
    first-quarter revenue increase of eight percent from 2004 to 2005, compared with
    an increase of 13 percent from 2003 to 2004.

    The issue of third-party vendors selling printer cartridges
    is one that affects all printer manufacturers. Last month, printer manufacturer
    HP sued two companies that sell refilled ink cartridges.

    It alleged that one of the companies, InkCycle, violated
    three HP patents with its ink. It accused the other company, RhinoTek, of false
    advertising by using packaging that indicated did not indicate that its refilled
    HP printer cartridges were recycled.

    Last year Lexmark lost a legal battle over cartridge
    refills. The company alleged in 2003 that Static Control Components had violated
    the Digital Millennium Copyright Act (DMCA) by selling its Smartek chips to
    companies that refill toner cartridges and undercut Lexmark’s prices. But, in
    October 2004, a US federal court ruled that Static Control can continue selling
    the chip, as the DMCA allows exemptions for the purpose of
    interoperability.