CHINA PRODUCES 80% OF THE WORLD's COMP/REMAN INK CARTRIDGES

[Anonymous]

http://www.computerproducts.globalsources.com/gsol/I/Ink-cartridge/a/9000000107117.htm
CHINA PRODUCES 80% OF THE WORLD’s
COMPATIBLE AND REMANUFACTURED INK CARTRIDGES
Awareness of IPR rules keeps
companies on their toes. Time to market is shortened to stay
competitive.
The effects of the
patent infringement case filed by Epson two years ago are still
reverberating in mainland China’s printer consumables industry.
Suppliers continue to emphasize product development and IPR applications
under efforts to remain competitive. The lawsuit, also known as the 337
investigation, was petitioned against 24 makers and resellers in the
mainland, Germany, Hong Kong, South Korea and the US.The US
International Trade Commission issued a final determination in 2007 that
the defendants violated Epson’s patents. The ITC, therefore, released a
general exclusion, limited exclusion, and cease and desist order. The
first bans the import of the infringing products to the US, while the
second prohibits unlicensed entry. The third forbids the 24 companies
from selling and distributing the impinging cartridges in the country.

Big
manufacturers in the mainland were among those that hugely felt the
impact of the case, being the major exporters to the US. Midsize and
small suppliers observed mainly from the sidelines, having Europe, Asia,
the Middle East and Africa as their core markets.One of the most
affected makers, Zhuhai Ninestar Image Co. Ltd, appealed the ITC’s
decision. In February 2009, it presented evidence that Epson also
violated some of its patents. At the time of writing, the ITC has yet to
issue a decision on the plea.

With China producing an estimated
80 percent of the world’s compatible and remanufactured ink cartridges,
the incident has posed a major setback to many companies. Suppliers and
industry experts, however, believe that the case will pave the way for
the sector’s further development as makers become more aware of industry
regulations.The lawsuit compels them to heighten their knowledge of
related directives and take measures such as setting up legal teams that
handle IPR issues. These, in the long term, will strengthen
competitiveness.

Zhuhai Gree Magneto-Electric Co. Ltd, for
instance, has since then applied for five patents. The supplier inspects
and analyzes the intellectual properties that Epson’s ink cartridges
cover to ensure it is not infringing on any product.Manufacturers are
also beefing up R&D and hastening lead time for the immediate
application of patents. This is because the earlier an IPR is obtained,
the less likely that another maker will have already acquired the rights
for the same design or technology.

Since established printer
brands such as Epson own the majority of patents for ink cartridges,
suppliers also need to be innovative and not resort to mere
copying.Zhuhai Ninestar, for example, has made advancements in its ink
cartridge configuration and circuits. It collaborates with local
universities in developing ICs. This enables the company to
shortenproduct development cycle in time for the release of new printer
models.Some suppliers, including Zhuhai Mingjia Electronics Co. Ltd, are
releasing new versions of ink cartridge with chipsets that can be
purchased separately. This gives buyers the option to source the
component elsewhere.Further, the case has brought a shift to makers’
target markets. Companies are now widening their reach to alternative
destinations such as Eastern Europe, Canada, South America and Southeast
Asia where IP rules are less stringent.

Government help
The
China government played a major role in assisting suppliers when the
337 investigation erupted. The Ministry of Commerce, in particular,
facilitated communication with related US departments and encouraged
local industry associations and makers to cooperate actively with the
legal proceedings.The State Intellectual Property Office and the China
Computer Industry Association have also expressed their support to
companies within the country and have been following the case closely.

In
Guangdong province, the General Chamber of Commerce established a law
assistance office that offers free consultation on the anti-dumping and
tariff act. It invites lawyers in China to offer their service to
suppliers. It was this center that advised Zhuhai Ninestar to apply for
selective exclusion if it is proven that Epson infringed on some of its
patents.

In April 2009, a regulation for the manufacture of
recycled printer consumables was also introduced in Guangdong. This new
standard covers the production process and environmental control
requirements of ink and toner cartridges.The directive is yet to be
released nationwide. Even so, it is a first step in determining the
guidelines to be followed and tackling related issues in the
remanufacture of printer consumables. It adheres closely to the general
policies in energy saving, emission reduction, recycling and sustainable
development.The regulation is supported by several local and national
supervision centers in Zhuhai and other cities in Guangdong.In addition,
local governments have taken the initiative to patronize compatible and
remanufactured products to help boost sales and awareness of domestic
brands.

Industry overview
Overall demand for printer
consumables has been increasing, according to the Zhuhai Printer
Consumables Industry Association. This is partly because the financial
crunch has urged buyers to turn to low-cost models, which abound in
China.

Makers of ink cartridges, however, are struggling with
weakening business, a result of the rising popularity of supplierslaser
printers that use toner cartridges, even without the legal dispute.Color
ink cartridges account for 80 percent of total output, while b/w
versions represent the rest. Large makers have a capacity of 3 million
units per month. The majority of production is under OBM.

Midsize
operations can turn out 200,000 cartridges monthly. The capacity of
small companies is naturally lower. Both types of manufacturers focus on
OEM.Key processes such as plastic injection, ink refilling and testing
are done in-house. Some have the capability to produce their own ink as
well. Suppliers used to source the component overseas but are now
obtaining their requirement locally to reduce overhead and subsequently
decrease unit prices.

[Author]

December 1, 2009 at 11:44 AM