Highlights of the RT Media Imaging Summit & Expo
By Harvey R. Levenson, Ph. D., Professor Emeritus, Cal Poly Graphic Communication Department, San Luis Obispo, Calif.
One thing that was clear from the recent two-day RT Media Imaging Summit & Expo that took place at the South Point Hotel & Casino, in Las Vegas is that, "It's an inkjet and toner world."
Produced by RT Media with support from the Graphic Communication Institute at Cal Poly, it was clear that the future of print imaging rests on further development in inkjet and toner technology. Presentations ranged from consumables to equipment to market share to legal issues, to customer demands. The Summit's presentations, discussions, and even debates revolved around the advantages and flexibilities of inkjet and toner over the more tradition printing processes of offset lithography, flexography, gravure, and screen printing. In fact, with the exception of one presentation about the demise of offset in light of the growth of inkjet and toner processes, there was hardly a mention of the traditional processes being a future competitive force in the mainstream of office and commercial printing.
The Summit sponsors were Diamond Research Corporation, Eastman Kodak, Graphic Communication Institute at Cal Poly, Konica Minolta, and Ultrex Business Systems. Mainstream traditional companies were invited to participate on all levels including Original Equipment Manufacturers (OEMs) and service provides, but declined, giving a sense that they had nothing to contribute to the "discussion." However, they really do have something to contribute considering that their future likely depends on diversifying into inkjet and toner system. At the very least, it would seem that they had a lot to learn about potential future market directions and what customers will be looking for to serve their imaging needs.
DAY 1
INTRODUCTION
David Gibbons, Director of RT Media, introduced the program, introduced the Summit guidebook, and pointed out that all presentations will be put online with a link e-mailed to all participants.
Tony Lee, Principal of RT Media, provided a welcome statement pointing out that imaging issues are part of a worldwide market and not restricted to any one nation or geographic region, and that this Summit would address many of the issues.
Lyndee Sing, Director of the Graphic Communication Institute at Cal Poly (GrCI) described the role of the GrCI as a Summit supporting organization involved in research, training, and programming for the graphic communication industry worldwide.
KEYNOTE SPEAKER
In absentia due to health problems, Art Diamond, President of Diamond Research Corporation, introduced the Summit's keynote speaker via a recorded video.
The Summit's keynote speaker was Daniel Burmeister, Director of Sales for Eastman Kodak's Extended Materials Business and a former National Football League player who was on the Washington Redskins Super Bowl winning team in the 1980s. Burmeister spoke on the topic of "Material Science Development: Past, Present...and What's Coming Next." He pointed out that Kodak's renewed commitment and strategy is the "materials science business" serving the aftermarket through innovative thinking and collaboration. He provided analogies between a successful football team and success in business citing metaphors for "pillars for success," such as: "know thyself", "know what the competition is doing", "be involved in active game changes and be adaptable to changes to meet different circumstances, " and "know what the probabilities of success are under different circumstances."
PROGRAM SPEAKERS
Ed O'Connor, Patent Attorney/Group Chair, The Eclipse Group, spoke on "How Will the Outcome of the 'First-Sale Doctrine' Court Case Challenge Affect Remanufacturing in North America?" Citing the Impression Products v. Lexmark case, O'Connor explained how the case is in the hands of three Judges of the Federal Circuit Court. The case involves Lexmark having sued between 40 and 50 companies in a toner cartridge-remanufacturing dispute, the largest segment of the toner aftermarket. Lexmark sued producers of remanufactured cartridges as well their customers, i.e., the users of these cartridges. The outcome of this case will have worldwide implications on the availability of remanufactured toner cartridges.
I am Professor Emeritus and former department head of Cal Poly's Graphic Communication Department. I discussed, "Fending Off Patent Trolls and Protecting OEM Intellectual Property." I discussed the growing concern over trolls (companies that buy patents and then sue or demand huge one-time payments or expensive licensing fees from producers of allegedly similar technology and their users). I pointed out that trolls are typically not in the business of the technology that the patents teach, nor do they produce the technology. Pointing out that most of these patents involve software (the "invisible technology"), I mentioned that many companies give-in to troll demands because of not being able to afford to be involved in expensive lawsuits. To help OEMs and users defend their right to their existing technology, Cal Poly has developed a centralized library available to the industry to explore Prior Art to help invalidate some of the patents purchased by trolls.
OPEN MIKE FORUM 1
The Summit included several "Open Mike Forums." The first covered: "Will legal issues destroy remanufacturing? Are OEMs and remanufacturers at odds with each other? What opportunities exist for cooperation?"
Moderated by Steve Weedon, the panelists included Ed O'Connor, Roland Tong, Tricia Judge, Daniel Burmeister, Merritt Blakeslee, and myself, Harvey Levenson. The discussion revolved primarily around the Impression Products v. Lexmark case. There seemed to be agreement among the panelists that if Lexmark won, the opportunities to serve an international market would be greatly limited, forcing remanufacturers out of business at the cost of many jobs, affordable pricing, and overall access to toner cartridges. The feelings expressed are that OEMs and remanufacturers must find a way to cooperate and co-exist for the good of the marketplace.
PROGRAM SPEAKERS – Continued
Bob Bucknum, Sales manager for Zhono Corporation, presented on the topic of "Delivering Non-infringing Solutions for Printing Cartridge Chips." Bucknum discussed developing imaging chips and chip designs for the future. He discussed barriers to entering the market and what could lead to the end of the aftermarket. He addressed the evolution of chips and challenges in the marketplace today and in the future.
Richard Yu, Managing Director of SGT, spoke about "Delivering the Best Non-infringing Solution for the Canon OPC (organic photoconductor) Drum and Dongle Gear Issue." Yu discussed the history of electrophotography starting with Chester Carlson's Xerox invention of the 1930s and the application of OPC, particularly in China. He covered today's challenges and opportunities, and intellectual property issues related to the interests of OEMs versus aftermarket producers. Yu discussed and showed illustrations of Canon "twisted gear" and "dongle gear" designs as presented in patents addressing toner cartridges and related components, and legal cases.
Rick Lasco and James Furlong of Rnano Inc. discussed, " 'Upcycling' Waste Plastic to Manufacture Economical and Environmentally Friendly Toners." They described a process that they developed on how to convert waste plastics into toner with the printing industry being a target industry for this technology. Pointing out that the carbon black industry represents a $30 billion market they speculated that toner manufacturers could benefit greatly from their conversion process in serving printers and other users.
David Cameron of Cameron Consulting Group discussed, "Why the Aftermarket Color Market is Stuck?" Cameron pointed out that changing attitudes and shifting strategies are taking place within companies involved in remanufacturing color toner cartridges. He pointed out that changing market conditions are causing a dilemma among remanufactures. He presented an interesting study illustrating industry trends.
I delivered a brief overview and wrap-up of the day's presentations.
TUTORIAL 1
The Summit also included two tutorials. Roland Tong and Tricia Judge of Roland Tong Law Offices did a tutorial on "Patent Issues Facing the Imaging Industry." They focused on the litigation against Lexmark (Impression Products v. Lexmark) pointing out that this "battle" has been going on since January 2014. They pointed out that other potential legal issues can involve other OEMs including Canon (one of the largest patent producers of toner cartridges in 2014) second only to IBM and Samsung. They described the "Patent Exhaustion Doctrine" related to where products were first sold by remanufacturers with Canon and others having no way of proving in what country first sales took place. They cited the Kirtsaeng v. John Wiley & Sons Inc. case in 2013 in which it was determined that if the first sale from abroad is in the United States there is no violation of patents or copyrights. The Federal circuit Court ruled on this issue. This raised further questions on what patent infringement really means. In "literal infringement," they pointed out that if one element in a claim is missing, there is no infringement. They also explained how the "Doctrine of Equivalents" could apply in claim interpretation for the patents in question depending on where first sales occurred.
TUTORIAL 2
Martin Jones, Learning Instructor of The Learning Group for Konica Minolta, present a tutorial on "The Displacement of Offset Lithography by Inkjet and Toner-based Digital Presses in the Commercial Printing Market." Jones described the evolution of digital presses beginning with the Xerox Docutech of the early 1990s to Kodak's and Konica Minolta's digital press developments of the late 1990s. He discussed the impact that the Internet and the Worldwide Web had on the production of digital color photos and the development of web-to-press printing that logically followed, including Fuji's inkjet press that produces 2700 sheets per hour, Konica Minolta's partnering with Komori in developing an inkjet press, and Canon's digital press that produces 3300 half-sheets per minute. Jones expressed throughout his tutorial that all developments in digital inkjet and toner presses are "direct hits" on offset lithography, and that as digital printing grows the volume of offset lithography decreases.
DAY 2
David Gibbons and Lyndee Sing introduced the second day. Gibbons announced that next year's RT Media's Imaging Summit & Expo would take place in Cancun, Mexico on May 19-20, 2016 to provide value to the growing Hispanic Spanish-speaking markets in Mexico, Central, and South America, as well as for the North American markets.
Sing presented specifics about services provided by the Graphic Communication Institute at Cal Poly, pointing out that research, development, and training have been in the areas of print and non-print digital imaging for organizations such as NASA's Jet Propulsion Laboratory at Caltech, UPS Stores (formerly known as Mail Boxes, Etc.), Konica Minolta, Ricoh, Dow Jones, California Integrated Waste Management Board, and many more. Sing also described Cal Poly's quarterly Graphic Communication Career Days where companies can recruit students for full-time positions and internships.
PROGRAM SPEAKERS
John Shane, Director, Communication Supplies Consulting Service for InfoTrends, discussed "Trends and Factors Impacting Print Consumables in North America. Shane presented an InfoTrends study focused on electrophotography and page-wide inkjet printing. He described how OEM's are buying-up dealers thereby limiting the sources for consumables available in the marketplace. In most cases, Shane pointed out, OEM's are particularly interested in acquiring dealers highly versed and skilled in Information Technology (IT) for office equipment. Other mergers underway, Shane pointed out, are in the retail sector where, for example, Staples is likely to acquire Office Depot. He discussed laser vs. inkjet applications and the advantages and disadvantages of each. He described how the more expensive laser printing is typically associated with higher quality but lower cost inkjet provides what is considered "good enough" quality for most business needs. Shane discussed new products such as HP Instant Ink and how there is a trend towards renting equipment such as printers, etc., thereby making it easier to acquire technology upgrades without being locked into purchases that quickly lose value due to the rapid rate of technological change.
Christian Pepper, Director of Sales, Distribution Channel for LMI, gave a talk on "The Upside to the Decline in Printed Pages." Pepper pointed out that LMI is the largest remanufacturer of toner cartridges in North America and involved in managing its business well in industries where print is declining. Addressing the aftermarket vs. OEM issues, Pepper pointed out that in a declining industry OEMs have more to lose and aftermarket companies have more to gain. His position is that "Lexmark is a winner here" because of its strong move to hold its position but he attacked HP's Enterprise segment for its move away from serving print that, according to Pepper, represents about 50 percent of the Gross Domestic Product (GDP). Pepper advocated that printed documents are "mission-critical" to customers and that businesses cannot run without them. Pepper further pointed out that the Asian market does not compete favorably relative to North America since in Asia there is the propensity to produce lower quality products, there is less reliability, and a high level of IP infringement. He mentioned that customers tend to buy from OEMs on the Internet because they typically receive higher quality products. Lexmark, according to Pepper is beating the market for cartridge and related consumables because they are adding value in helping customers build document management systems and infrastructure. Customers are willing to pay higher prices for such added value. Aftermarket companies need to follow this lead and this is a focus for LMI. Pepper pointed out that adding value is the way for aftermarket companies to move forward.
Giovanni Giusti, President of Doxense Europe, presented on "Industrial Evolution in the New Information Age." Giusti discussed the tremendous growth that occurred in China in recent years—more than the growth of Facebook, Google, and You Tube. He pointed out that the speed of technology growth is so great that "technology adoption is a must for survival." The PDF, he pointed out, is the number-one document being printed today. As one example, Giusti mentioned that 100 million copies of the book "50 Shades of Gray" were printed due to the digital press alone and not by a publisher using traditional printing technology. The file for such books is a PDF. According to Giusti, China will continue to be the leader in global manufacturing. Europe will decline substantially because European nations cannot adapt quickly enough. Giusti concluded by saying that "cloud computing" is a must for controlling data as there is not enough capacity without it.
OPEN MIKE FORUM 2
Moderated by Steve Weedon, Open Mike Forum 2 included panelists John Shane, Giovanni Giusti, Christian Pepper, and Velliyur Sankaran. The panel discussed, "What are the Emerging Market Opportunities for Print Consumables?" The focus of the discussion was on Eastman Kodak's new entry into the aftermarket to support the aftermarket. It was pointed out that Kodak employs great chemical scientists who can bring new thinking to the aftermarket and the company is entirely refocused as a result of its recent bankruptcy.
PROGRAM SPEAKERS – Continued
Ron Sarne, Market Development Manager, Strategic Business Consultant, Indigo & Inkjet Graphic Solutions for Hewlett Packard, discussed "Digital Print Technologies and the Market Trends that Drive Them." Sarne pointed out that Graphic Solutions at HP focuses on liquid inkjet from an OEM perspective. He mentioned two technologies that are involved here—inkjet and liquid electrophotography (LEP) or liquid toner. He said they are related to "scalable printing technology" in the categories of up to 26", 30", and 42" widths. Liquid electrophotography competes with offset printing in the general commercial printing market. Sarne pointed out that the HP Indigo 10000 is a 20" x 29" press. The HP 20000 is for flexible packaging, and the HP 30000 is for folding carton products. HP's present developments are in high-definition nozzle architecture (HDNA) having 2,400 nozzles per inch. This is up from 1,200 nozzles per inch. The higher number of nozzles, according to Sarne, provides much clearer prints with no banding.
Ian Elliott, President of Print-Rite North America, discussed, "Mergers & Acquisitions: Where Does This Leave the Imaging Industry?" Elliott emphasized that there are disproportionate gross margin shares between OEMs and aftermarket companies leading to consolidations in the marketplace. He pointed out that the development of aftermarkets was caused by OEMs because OEMs enjoy significant market power in pricing. As aftermarkets consolidate, according to Elliott, this will change.
Steve Weedon, industry consultant and commentator, concluded the Program Speaker presentations with a talk on, "Summit Challenge: Why Remanufacturers Need to be Smarter About Imaging Patents." Weedon's talk focused primarily on the background of patent development, its history, and the significance of patents.
OPEN MIKE FORUM 3
Again moderated by Steve Weedon, Open Mike 3 included panelists Ian Elliott, David Cameron, Josh deBear, and Patrick Church. The panelists overviewed the Summit and discussed, "How Can the Threats Facing the Imaging Industry be Converted into Opportunities?"
I again delivered a brief overview and wrap-up of the day's presentations.
SUMMIT EXPO
Among the Summit expo exhibitors were Chinamate Technology Co., Ltd., Graphic Communication Institute at Cal Poly, Eastman Kodak, Locator Magazine, Nature Toner Co., Ltd., Retech Technology International Limited, Ultrex Business Systems, Zhuhai Altman Digital Technology Co., Ltd., Zhuhai Jialianxin Imaging Products Co. Ltd., Zhuhai Polytoner Image Co., Ltd., Zixingshi Heshun Technology Printing Materials Co., Ltd. , Zhono, LMI, Telatemp, Konica Minolta, and Huiatech, MSE.
The expo provided the opportunity for Summit attendees to meet with company representatives to discuss specific business interests and to learn of new developments and initiatives of the exhibiting companies.