Lexmark

Last updated

Lexmark International, Inc.
Company type Private
Predecessor IBM Information Products Corporation
FoundedMarch 27, 1991;33 years ago (March 27, 1991)
Headquarters Lexington, Kentucky, United States
Area served
Worldwide
Key people
Phillip Cassou (Chairman)
Allen Waugerman (President & CEO)
Products
RevenueIncrease2.svg US$3.711 billion(2014) [1]
Decrease2.svgUS$149.2 million(2014) [1]
Decrease2.svgUS$79 million(2014) [1]
Total assets Increase2.svgUS$3.633 billion(2014) [1]
Total equity Decrease2.svgUS$1.281 billion(2014) [1]
Owners
Number of employees
9,000 (Jul 2018) [2]
Website www.lexmark.com

Lexmark International, Inc. is a privately held American company [3] that manufactures laser printers and imaging products. The company is headquartered in Lexington, Kentucky. Since 2016 it has been jointly owned by a consortium of three multinational companies: Apex Technology, PAG Asia Capital, and Legend Capital. [4]

Contents

History

Lexmark Headquarters, Lexington, Kentucky Lexmark Headquarters, Lexington, KY.jpg
Lexmark Headquarters, Lexington, Kentucky

Lexmark was formed on March 27, 1991, when investment firm Clayton & Dubilier completed a leveraged buyout of IBM Information Products Corporation, the printer, typewriter, and keyboard operations of IBM. [5] [6] [7] [8] [9] Lexmark became a publicly traded company on the New York Stock Exchange on November 15, 1995 (under NYSE:LXK). [10]

By 2016, the company struggled to keep corporate clients that are cutting costs and the consumers who are shifting to mobile devices from personal computers. It was reported in April 2016 that Lexmark would be taken private and acquired by Apex Technology and PAG Asia Capital for US$3.6 billion. [11] Lexmark was set to be acquired at $40.50 per share in the transaction. [12] Initial talks for the acquisition were begun at the Remax World Expo in 2015. [13] The deal was closed on November 29, 2016. Lexmark stated that its headquarters would remain in Lexington, and that its enterprise software line of business would be spun off and "rebranded" to Kofax. [14] As part of the sale, the Perceptive Business Unit portion of Lexmark's Enterprise Software Services division (e.g., their non-Kofax-branded document management products) was sold to the Thoma Bravo management group who agreed to in-turn sell the Perceptive Business Unit to the Hyland Corporation. [15] The Kofax-branded applications remained as part of Lexmark, but other document management systems like Perceptive Content and NolijWeb and products like Intelligent Capture (formerly "Brainware") and Enterprise Search (formerly "ISYS") were absorbed by Hyland. [16]

Operations

The firm's corporate headquarters is located in Lexington and R&D offices are distributed globally with additional R&D facilities located in Boulder, Colorado, US; Lenexa, Kansas, US; Cebu, Philippines; Kolkata, West Bengal, India; Berlin, Germany; Stockholm, Sweden [17] and Irvine, California, US. [18] Lexmark has offices throughout North and South America, Asia, Africa and Europe. As of July 2018, the company had approximately 9,000 employees worldwide. [2]

Acquisitions

Divestitures

Lexmark pioneered the use of profits from ink cartridges as a business model, with the result of modifying the legal models of product ownership and patent exhaustion over several years. [33]

Arizona Cartridge Remanufacturers Ass'n Inc. v. Lexmark International Inc. , also referred to as ACRA v. Lexmark, was a 2005 decision by the United States Court of Appeals for the Ninth Circuit, which ruled that an End User License Agreement on a physical box can be binding on consumers who signal their acceptance of the agreement simply by opening the box. The decision holds that Lexmark can enforce the "single use only" policy written on the side of Lexmark printer cartridge boxes sold to large customers at a discount, with the understanding that the customers will return the cartridges to Lexmark after using them (so that the cartridges would not be diverted, refilled, and then resold), or else face legal liability for not returning them to the company as agreed.

Lexmark had introduced various authentication mechanisms into their printers that rejected third-party cartridges and resisted any attempt to refill spent ones. ACRA, a consumer group representing manufacturers of third-party authentication microchips and third-party ink and toner cartridges, had challenged this policy as deceptive and unenforceable. The Ninth Circuit disagreed, allowing Lexmark to prevent the use of third-party cartridges and the re-use of empty ones. These restrictions are achieved with a combination of encryption hardware within the cartridges and printer firmware that attempts to verify their authenticity as being first-party (i.e. manufactured or distributed by Lexmark). The firmware tracks cartridge ink levels, and will permanently disable any cartridge that it has determined to have been refilled, regardless of whether it actually has been.

Subsequent challenges to the "single use only" policy were more successful. Lexmark lost the Supreme Court case Impression Products, Inc. v. Lexmark International, Inc. , in a 7–1 ruling that partially reversed and remanded the Ninth Circuit decision in ACRA v. Lexmark on May 30, 2017:

When a patentee chooses to sell an item, that product is no longer within the limits of the monopoly and instead becomes the private, individual property of the purchaser, with the rights and benefits that come along with ownership. A patentee is free to set the price and negotiate contracts with purchasers, but may not, by virtue of his patent, control the use or disposition of the product after ownership passes to the purchaser. The sale terminates all patent rights to that item. [34]

The decision holds that Lexmark cannot sue third-party manufacturers or resellers for patent infringement; notably, it does not mean that Lexmark cannot use firmware to detect, reject or disable third-party ink cartridges or attempted refills. As of 2024, the company continues to do so.

See also

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References

  1. 1 2 3 4 5 "2014 Form 10-K, Lexmark International, Inc". United States Securities and Exchange Commission.
  2. 1 2 "Printer company Lexmark plans about 1,000 layoffs". SFGate. July 18, 2018. Retrieved August 3, 2018.
  3. ↑ Natarajan, Sridhar; Ronalds-Hannon, Eliza; Chan, Cathy (April 3, 2018). "Two Years After Chinese Buyout, Lexmark Bonds Show Junk Risk". Bloomberg. Retrieved November 15, 2018.
  4. ↑ Lexmark (November 29, 2016). "Lexmark announces completion of acquisition by Apex Technology and PAG Asia Capital" . Retrieved November 15, 2018.
  5. ↑ "Lexmark celebrates history of excellence, innovation at 20-year anniversary". PR Newswire. March 27, 2011.
  6. ↑ "Customs Ruling HQ 544887". U.S. Customs and Border Protection. October 2, 1992. Archived from the original on March 21, 2016. Retrieved October 12, 2014.
  7. ↑ "Lexmark International Group 1996 annual report, SEC Form 10-K". Advameg. March 24, 1997.
  8. ↑ "IBM Archives: 1991". IBM . January 23, 2003.
  9. ↑ Lewis, Peter H. (December 22, 1991). "The Executive Computer; Can I.B.M. Learn From a Unit It Freed?". The New York Times.
  10. ↑ "LXK stock quote - Lexmark International, Inc. stock price". NASDAQ.com. Retrieved April 22, 2013.
  11. ↑ Sullivan, Lawrence R. (2017). Historical Dictionary of the Chinese Economy. Lanham, MD: Rowman & Littlefield. p. 379. ISBN   978-1-5381-0853-6.
  12. ↑ "Details Disclosed for Lexmark Acquisition Deal". RT Recycling Times. April 21, 2016. Retrieved June 12, 2016.
  13. ↑ "Former Lexmark Executive Reveals Deal with Ninestar-Apex". RT Recycling Times. April 20, 2016. Retrieved August 15, 2016.
  14. 1 2 Truman, Cheryl (November 29, 2016). "Lexmark acquisition completed: Rooke out, company exits software business". Lexington Herald-Leader . Retrieved January 28, 2017.
  15. ↑ "Hyland Software agrees to acquire Lexmark's Perceptive portfolio". Cleveland.com. May 3, 2017.
  16. ↑ Hein, Jen (May 3, 2017). "Hyland, creator of OnBase, has entered definitive agreement to acquire the Perceptive portfolio" . Retrieved December 12, 2020.
  17. ↑ "Lexmark 2014 Annual Report". Lexmark International, Inc. Retrieved January 19, 2016.
  18. 1 2 "About Us - Kofax" . Retrieved January 19, 2016.
  19. ↑ "Lexmark Newsroom - News Releases". Newsroom.lexmark.com. May 21, 2010. Retrieved April 22, 2013.
  20. ↑ "Lexmark acquires Pallas Athena - LEXINGTON, Ky., Oct. 18, 2011 /PRNewswire/" (Press release). Prnewswire.com. Retrieved April 22, 2013.
  21. ↑ "Lexmark acquires Brainware - Mar 5, 2012". Newsroom.lexmark.com. Retrieved April 22, 2013.
  22. ↑ "Lexmark acquires ISYS Search Software and Nolij - Mar 19, 2012". Newsroom.lexmark.com. Retrieved April 22, 2013.
  23. ↑ "Lexmark acquires Acuo Technologies - Jan 2, 2013". Newsroom.lexmark.com. January 2, 2013. Retrieved April 22, 2013.
  24. ↑ "Lexmark acquires Twistage and AccessVia". Newsroom.lexmark.com. March 5, 2013. Retrieved September 21, 2013.
  25. ↑ "Lexmark announces agreement to acquire Saperion" . Retrieved January 19, 2016.
  26. ↑ "Lexmark acquires PACSGEAR" . Retrieved January 19, 2016.
  27. ↑ Big acquisition brings Perceptive Software opportunity and layoffs Bizjournals.com, September 19, 2014
  28. ↑ "Even Better Invoice Processing. ReadSoft is now Lexmark" . Retrieved January 19, 2016.
  29. ↑ "Lexmark completes acquisition of Kofax, announces Enterprise Software leadership change" . Retrieved January 19, 2016.
  30. ↑ "Lexmark announces restructuring". Lexmark. August 28, 2012. Retrieved August 28, 2012.
  31. ↑ "Lexmark to exit inkjet printer market". pcpro.co.uk. August 28, 2012. Retrieved August 28, 2012.
  32. ↑ "Funai acquiring Lexmark's inkjet-related technology and assets". Newsroom.lexmark.com. April 1, 2013. Retrieved September 21, 2013.
  33. ↑ Duan, Charles (October 21, 2016). "How a Printer Company Redefined Ownership; Lexmark's strategy has changed the rules about what you can do with something you 'bought.'". Slate . Retrieved October 22, 2016.
  34. ↑ Impression Products, Inc. v. Lexmark International, Inc., 30 May 2017
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