When a new manufacturing method like 3D printing becomes widely commercially viable, it breaks down barriers to market entry for thousands, if not millions of companies. TCT’s pages are full of stories of businesses that owe their success to semi- or fully automated additive manufacturing (AM). Innovative companies enjoy reduced costs for shipment of their creations to markets far and wide. Many other players also use AM to operate on the back of others’ creations.
Websites allowing sharing of CAD designs of physical objects are particularly popular, giving individuals or companies that already have access to AM devices all they need to “print” their own copies of others’ products and creations. Sharing CAD files and creating associated objects in this manner can of course allow private individuals to enjoy hobbies harmlessly, and can even spark creativity in those willing to invest time in creating their own designs.
However, with the need to have access to manufacturing skills when trying to access a market diminishing, innovative companies relying on new product lines to stay ahead of their competition are likely to suffer.
A recent study by PWC indicated that over 22 percent of surveyed companies consider AM a threat to their intellectual property rights (patents, trade marks, design rights and others). It is often cited that up to 80 percent of company value resides in companies’ IP, and so many could be forgiven for thinking that the proliferation of AM is a threat to their very existence (and to the jobs associated with the company and its supply chain). This threat is particularly pronounced for the most innovative companies, such as start-ups and SMEs.
The music industry has already gone through the trials of having to deal with illicit file sharing threatening its business models. Lessons learnt by the companies that had to deal with this are already providing food for thought for many companies in the age of 3D printing. There are very positive signs of designers of physical products and their professional advisers seeking to develop new business models that accommodate customers’ desires to file-share and/or 3D-print their products, with some business seeking to push further and use the on-the-spot and on-time manufacturing abilities provided by AM to positively modify their supply chain.
New business models may help companies positively engage with parties that would otherwise infringe existing IP rights. However, a continuing need for strong IP protection will remain, allowing companies to deal with direct illicit competition from aggressive and uncooperative parties.
Our current IP law systems are geared towards dealing with the manufacture, distribution, sale, etc. of physical goods. One commonly used method for enforcing IP rights is cross-border customs detentions, but on-the-spot manufacture and manufacture of very small production runs mean that the number of products crossing international borders is reducing, rendering border detention ineffective. And, as the music industry learnt, in a world where some or all IP infringement is carried out by private individuals or other small scale IP right infringers, it quickly becomes unrealistic and economically pointless to go after all infringers.
If the distribution of electronic files used to manufacture new products could be stopped, then infringing activities could be more readily counteracted. Current IP law systems are, however, not well suited to dealing with this kind of file distribution. Although measures exist to help companies pursue parties providing CAD files to others for them to manufacture products through 3D printing, it is more difficult to apply these measures than to stop infringing physical goods. Fears that parliaments will pass laws to ease this burden have been voiced for a while but even if parliaments around the world decided not to follow any such calls, it is inevitable that the courts will, sooner or later, come across a situation in which intellectual property rights are flagrantly infringed, but where standard interpretations of current law has not yet had to deal with any such new but evident abuse.
The law cannot anticipate all the problems arising from future technological developments. This is why laws steadily evolve and adapt to new situations by courts interpret existing laws in new unforeseen situations, generating case law that can later be relied upon by other parties in similar situations. As courts hear more cases involving IP infringement from additive manufacturers, new case law will increase legal certainty for the public and IP rights holders. But, few companies will want to be involved in the “test cases” that create that new case law, given the uncertainties involved.
There are some things that companies can do now to avoid such potentially risky disputes – for example, by having patent applications drafted from the outset in a way that helps prevent unauthorised parties from creating and distributing CAD files of an innovative product. It is critical that relevant steps are taken at the planning and creation stages, for example when a patent application is drafted before its filing with a patent office. This can be a difficult task for two reasons. Firstly it is necessary for professional advisers not only to understand their clients’ business, but also to have a good understanding of the legal challenges that may conceivably lie ahead over the full term of the patent (20 years). In rapidly developing areas of technology, this can be a challenge for Patent Attorneys who advise companies on their IP and draft and file patent applications, unless they maintain a high level of sector knowledge. Secondly, given that AM techniques are conceptually very different from traditional manufacturing techniques, patent applications drafted with only traditional manufacturing techniques in mind may well be technically unsuitable for covering AM. Because of this, it is likely that companies continuing to manufacture in traditional ways will face situations where their IP protection is no longer fit for purpose. Whatever their reason for not embracing AM, they should still bear in mind the dangers to their IP rights associated with alternative, AM methods.