Digital Media Lawyer Blog

Consumer electronics/green energy regulations: Despite the objections of major players in the consumer electronics industry, the California Energy Commission announced today (September 18, 2009) that it intends to move ahead with restrictions on television power use that were originally proposed by the energy industry. Under the proposed rules, all new televisions sold in California with a screen size less than 1400 square inches must meet the following standards:

• Tier I (effective January 1, 2011): limited to 1 watt of power while in "passive stand-by" mode and to 0.20 watts x screen area (in square inches) + 32 while in "on mode."

• Tier II (effective January 1, 2013): limited to 1 watt of power while in "passive stand-by" mode and to 0.12 watts x screen area (in square inches) + 32 while in "on mode."

Televisions with a screen size equal to or less than 1400 square inches -- which corresponds roughly to a 58" screen size -- were intentionally omitted from the proposed standards. This concession was in response to objections from many small retailers who sell high-end specialty home theatres that consist almost entirely of screen sizes greater than 58". However, the Commission indicated that it intends to regulate power consumption in these large screen models in a second rulemaking phase.

Effective on January 1, 2011, all TVs would also be required to have a "power factor" of at least 0.9 for units with a power usage greater than or equal to 100 watts. The term "power factor" refers to a TV's maximum draw from the power grid. For example, if a 100 watt TV works by drawing 200 watts from the grid for 0.5 seconds, it would have a power factor of 0.5 (100 watts divided by 200 watts). Many TVs work by drawing a large amount of power from the grid, storing it, using it, and then drawing more power. According to the Commission, these types of designs are energy inefficient, because they lose more energy via heat. Mandating a minimum 0.9 power factor eliminates these types of designs.

In addition to these power restrictions, the Commission also plans to implement: (i) a luminance performance requirement under which a TV's power use in "default mode" can be no greater that 65% of its luminance in its brightest most, (ii) a requirement that all TVs enter standby-passive mode after a maximum of 15 minutes without user input, and (iii) a requirement that all televisions be marked with their on-mode power consumption.

Continue reading "California Energy Commission Rebuffs the Consumer Electronics Association and Announces Move to Implement Strict Restrictions on TV Power Use" »

The recent relaxation in product return policies by retailers means that return rates on consumer electronics are likely to rise in 2009. (See our January 15, 2009 posting). This news is not entirely bad. Economic studies have shown that liberal return policies increase customer sales. (fn1) This, of course, is why many U.S. retailers have chosen to liberalize their return policies during the current economic downturn.

If you are a manufacturer or a supplier, cooperating with a retailer's liberal return policy can increase your sales, as well. If, of course, you can afford it. OEMs often work on gross profit margins that hover around 10%. Distributors often operate on even lower margins. While you may have projected that you can earn a profit based on a retailer's conservative return policy that produced a 5% return rate, a sudden liberalization that increases the return rate to 15% could wipe out your profits.

Continue reading "Minimizing Risks from Product Returns" »