US Market Warned about ‘Clones’

In two separate notices, both OEM Xerox and Aftermarket Clover have issued warnings to the US dealers and markets that clones are “destroying an entire industry.”

Xerox has sent out a two-page flyer stating, “Clone cartridges are 100% new-build cartridges produced by third-party manufacturers to look like the real thing. Often sold as ‘remanufactured’ and with a strong environmental message, clone cartridges are neither the real thing nor environmentally responsible.”

“Clones” is a word used to describe new-built cartridges, manufactured by third-party companies in China. Five years ago, all new-built cartridges were literally “clones”—exact replicas of the OEM products. They ignored all intellectual property rights of the OEMs. They were not counterfeit as they usually were packaged as being compatible. However, many did end up in the hands of distributors who packaged them in OEM looking boxes and sold them as the genuine article. Remanufactured cartridges are also distributed as fake OEM products. These are crimes punishable by jail sentences.

Today, many new-built manufacturers in China have developed their own patents, and the new-built cartridges are not necessarily “clones” any more. It is estimated that there are about 5,000 Aftermarket patents now held by Chinese companies that have sought their own workaround solutions for printer cartridges. Some manufacturers have met with border authorities in the US to demonstrate why the products do not infringe and have been allowed to enter.

Xerox, who is by far the largest supplier of printer supplies to the managed print channel, including printers that are not their own brand, also warned “clone cartridges appear to be less costly, but they aren’t. Image quality is low, failure rates are high, damage to the printer is common and these are not even the most serious issues.” Xerox uses Aftermarket supplies to fill its managed print channel orders for other OEM devices. They purchase these from companies like the Clover Imaging Group, the largest remanufacturer of cartridges in the world.

You can read the Xerox two-page flyer on the website at here.

Some OEMs, however, are now starting to visit Chinese cartridge manufacturers to relook at the new-built cartridge industry. So are many of the “big box” distributors like Staples and DepotMax.

us-market-warned-about-clones-02-nwFormer Recharger Magazine editor Patricia Ames scored a rare interview with Clover’s founding CEO Jim Cerkleski (pictured). Her article, like the Xerox article, was also published this week.

In her article, Ames asked Cerkleski what he saw to be the greatest challenge in the next couple of years in the imaging industry. Cerkleski responded, “It’s the clones coming into the marketplace.” He blames US Customs and the OEMs for not shutting it down. “They really have not been able to make any discernible impact,” he adds.

Cerkleski is quick to add that he works closely with the OEMs. “I am in constant communication with the OEMs about this issue and that’s one of the reasons why I want to partner with the OEMs. I want the OEMs to know that the legitimate remanufacturers are not the bad guys, it’s the blatant and disrespectful clone manufacturers that have no respect for IP at all.”

A number of industry analysts have told RT Media Cerkleski’s Clover holds very powerful business relationships with the OEMs in order to supply Aftermarket products they need to fulfil their MPS contracts. Clover does not make any new-built cartridges. “Non-infringing, new-built products coming from China could undermine the strong business relationship between Clover and the OEMs in the future,” one person noted. “If the cheaper, new-built cartridges prove to provide consistent yield and quality, and are in fact non-infringing, then they could, potentially, change the aftermarket landscape,” another person suggested.

Clover has become the industry’s most successful and iconic Aftermarket brand. As pointed out in Ames’ article, Clover is spending “millions and millions of dollars a year” collecting empties that would have gone to landfill. Reuse is an important, environmental platform that can only be argued by the cartridge remanufacturers. The new-built manufacturers have no strategy to collect and reuse their used cartridges.

You can read Ames’ full interview with Cerkleski at here.

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