Almost five months after the Canon complaint was lodged with the ITC back on February 28, 2018, a significant development occurred last Friday, July 27, 2018, with the issuance of the ITC Staff's brief in preparation for the Markman hearing on claim construction that's scheduled to take place August 30, 2018.
Following the extraordinary events that led up to the termination of the proposed merger of Xerox into Fuji Xerox, what could be next for a company facing severe risks of marginalization in a mature office products and equipment industry?
On May 9, 2018, Office Depot released its first quarter 2018 earnings, its first full quarter results since completing the acquisition of CompuCom in November 2017. We've published numerous articles about the $25 billion-plus of annual U.S. sales the combined entities of Office Depot and Staples have, terming this a "Blue Ocean" environment and an ideal target for independent resellers to focus on.
An ITC proceeding takes place at a rapid pace and all will be said and done within 18 months of its initiation. However, unlike the previous ITC complaints filed by Canon, this new complaint will have a Markman hearing at the end of August 2018. This event sets the stage for the January 2019 trial.
After Canon's announcement on March 2, 2018, that it had filed a complaint with the United States International Trade Commission alleging patent infringement by 49 manufacturers, distributors, and resellers on specific laser cartridges used in certain Canon and Hewlett Packard printers, there has been a flurry of activity.
Many of the same companies from the 2014 ITC complaint are now back in front of the ITC as respondents in the 2018 case, ironically defending themselves on patent infringement claims for the very designs they implemented to resolve the 2014 matter.
Labeling new-build aftermarket cartridges as clones may be an effective strategy for discrediting the ever-increasing threat they represent to the remanufacturing business model, but it is wrong to apply the clone label to all new-build cartridges.
How can the patent system be exploited to permit design-around invented by aftermarket competitors in the 2014 timeframe to be patented years later by the OEM, who then takes legal action to try and enforce them against the same companies that invented them?
On Friday, March 2, 2018, Canon Inc. issued an announcement stating it had filed complaints with the United States International Trade Commission (ITC) against 49 manufacturers, distributors, and resellers of toner cartridges and photo-sensitive drum units, asserting infringement of nine recently issued U.S. Patents.
We think it's fair to speculate that most observers outside of Xerox (maybe many insides) are also skeptical that the proposed business combination with Fuji Xerox will likely make a difference. We previously formulated the argument that the new Xerox must increase revenues at 5% per year to have a chance of supporting an ongoing 13X multiple on its share price. Xerox must win more than $3.5B of new business over the next four years to satisfy investors.
