The Copy War

Commercial warfare erupted last week between two technological titans. International Business Machines Corp. invaded the $1.5 billion-a-year office-copier market by bringing out a machine remarkably similar to a couple made by Xerox Corp., which has long dominated the field. The venture is IBM's most ambitious foray into a new market in the decade since Thomas Watson Jr. took over as chairman. Xerox countered with a lawsuit charging 22 patent infringements and asking a federal district court in Manhattan to prevent IBM from selling its new product.

Denying Xerox's accusations, Bart M. Stevens, president of IBM's office-products division, said that the new copier uses a "specially developed photoconductor" that IBM patented in 1965. The 40-in.-high model can churn out letter-or legal-size copies at a 600-per-hour rate from a roll of plain white paper. It sells for $19,200 or rents for $200 a month plus 2.3-c- per copy.

That is considerably more expensive than the machines with which it will compete most directly: Xerox's "660" series, which can produce 660 copies per hour on ordinary paper and sells for $5,500. The Xerox 660-1 model rents for $60 a month plus 4 1/2-c- per copy, and the Xerox 660-3 rents for $100 a month plus 2-c- to 4 1/2-c- per copy, depending on the quantity actually made. Like other Xerox models, the 660s depend on a patented process called xerography (from the Greek, meaning dry writing), which uses light and heat to transfer images. Both the Xerox machines and IBM's new entry turn out copies of similar legibility.

In its suit, Xerox said that it had twice refused IBM's request for a license to produce xerographic office copiers. But IBM is licensed to use Xerox processes for computer equipment. The suit accused IBM of using trade secrets provided under that agreement to produce its new office copier. In IBM's process, an image of the original document is picked up by a photoconductive drum. A toner powder, mixed with developer fluid, cascades over the drum, which then transfers the image electrostatically onto the copying paper.

The courts will probably take several years to rule on the patent suit. Merely by filing the suit, Xerox served warning to other firms that it will fight hard against all challengers. Solidly entrenched Xerox is likely to suffer less from the new rivalry than other firms in the torridly competitive office-copier field. Xerox's 70% share of the market is based largely on an array of patents that give it a continuing capacity to bring out improved equipment.

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