3D Printing, Innovation Protection, and Manufacturing: The Big Change is Now
June 17, 2015
Intellectual property (IP) law is undergoing a major transformation just as additive manufacturing― or 3D printing― has begun to revolutionize the manufacturing industry. The interplay between these two forces could end up making manufacturing one of the first industries to experience the full disruptive effect of 3D printing. Understanding how requires a review of the current state of 3D printing, IP protection, and the changes they have already made in manufacturing. Coupled with a look at past technological disruptions, this review will provide important insights into the best ways to manage and respond to the change that is on its way.
3D printing and the manufacturing industry so far
The manufacturing sector began exploring the benefits of 3D-printing technology many years ago—especially for parts prototyping. Unlike traditional manufacturing processes, 3D printing, allows a new or experimental part to be developed quickly and cheaply, especially for complex parts or parts with complicated shapes. As a result the aerospace, automotive, defense, and medical device industries have already embraced 3D printing to streamline their processes. That early use has already led to wide-spread adoption for parts requiring customization. For example, the medical device industry has adopted 3D-printing technology for the manufacture of customized products such as hearing aids—where as many as 10 million custom 3D-printed units have already been delivered.
While those manufacturing subsectors requiring highly customizable parts have moved quickly to realize the benefits of 3D printing, mainstream manufacturing is still at the early stages of adoption. But industry analysts predict a significant rise of new 3D printing-based manufacturing environments within the next five years. Traditional manufacturers will revolutionize their processes using 3D printing alone or together with other advances such as open-source software and robotics. The new supply chain this kind of manufacturing could create will likely require widespread changes, including the need to re-shore manufacturing, adjust design and retail strategies, and retrain workers. Stated simply, manufacturing as we know it may change in a big way.
Developments in protection of intellectual property
The impending changes in manufacturing will come about in the midst of uncertainties in IP law. As the law evolves, the manufacturing industry will need to further adapt.
Historically, innovators relied on patent law for protection. While still providing appropriate protection in certain circumstances, patent law may not be the answer for every circumstance. Some courts and companies have expressed concern about excess litigation and damages awards, resulting in validity challenges under the America Invents Act in the U.S. Patent Trial and Appeal Board and more difficult standards to prove damages for any surviving infringement claim.1 In addition, the recent U.S. Supreme Court decision in Alice Corp. v. CLS Bank likely makes the protection of software innovation via patent much more difficult.2
These and other changes in patent law have caused some innovators to turn to trade secret law for possible protection. Trade secret law protects processes and methods and provides some advantages over patent law. Specifically, damages in trade secret cases can be easier to prove and less scrutinized relative to patent awards. Two pieces of federal legislation currently under consideration would result in a uniform, federal trade secret cause of action.3
But the protection afforded by trade secret law is no panacea. For example, trade secret law does not offer protection against reverse engineering. Those who rely on trade secret law must have stronger tolerance for risk because critical trade secrets can be lost when employees leave—a more common occurrence because of greater marketability of workers skilled in complex manufacturing processes.
Past developments lend insight
3D printing will simultaneously affect the way we manufacture goods and the way we protect innovation. Using 3D printing, a manufacturer can more easily create products. This, in turn, increases the chances of infringing on another’s patent, trademark, trade dress, or copyright. While the shift and development of IP protection make the implications of the infringement unclear, looking back to other disruptive advances offers some clues to what may be coming.
For example, at one time, copyright law’s fair use doctrine allowed copying of library books and articles needed for research without prior permission. The doctrine made sense when we duplicated by hand or by expensive centralized processes. When technology advanced and photocopying became fast, easy, and inexpensive, the fair use doctrine evolved and transformed—and limited―the rights of those performing research to duplicate articles and books.4
The impact of technological advances on the fair use doctrine may signal a similar evolution in patent law. The doctrine of permissible repair allows the owner of a patented object to preserve its useful life, which sometimes includes the right to produce replacement parts.5 However, this right of repair evolved during a time of traditional manufacturing processes, when creating replacement parts took more time and expense than they do and will with 3D printing. Now manufacturers can more easily make parts for aftermarket and older-generation products, making loss to the patent holder more likely. For this reason, the doctrine of permissible repair may be ripe for reconsideration.
Technological change will not only bring long-standing intellectual property doctrines into question, but may also result in new legislation. For example, Congress passed the Digital Millennium Copyright Act (DMCA) in an attempt to align copyright law with a changed, now digital, landscape.6 Similarly, lawmakers may address manufacturers’ IP rights in response to those asking for patent and trademark liability limitations for sites providing CAD/CAM files used in 3D printing.7 Congress may enact legislation similar to the DMCA, which confirmed old rights in the face new technologies, or Congress may completely revolutionize this area of law. The substantive outcome of any legislative action is uncertain. Several factors are at play--the respective power and input of rights holders, the public, and lawmakers.
A recommended approach for manufacturing
As with past technological innovation, 3D printing will bring change to industry and law. The manufacturing sector will be the first to navigate the changes wrought.8 To best prepare, manufacturers should consider IP implications and prioritize cybersecurity.
Both proprietary advances and older inventions deserve protection. Some may meet patentability requirements, and a patent infringement action may still be appropriate if the strength of the claim justifies the litigation costs. In other situations, the innovator may rely on trade secret protection. Regardless of the method, manufacturers must keep IP concerns at the forefront.
In addition, manufacturers must be vigilant about cybersecurity. The importance of security in the digital space is paramount. Owners of 3D-printing assets in the digital realm must protect them from hackers.
3D printing offers extraordinary opportunity to manufacturers of all sizes. The key to leveraging the advantages is to prepare―be aware of the possibilities and alert to the pitfalls. The promise of additive technology is growing quickly beyond providing improved processes for the manufacture of highly customizable parts to a revolutionized supply chain for the traditional manufacturer. At the same time, IP law is undergoing change. Past disruptive innovations have shaped traditional doctrine and laws and 3D printing will do the same.
1 See, e.g., Uniloc USA, Inc. v. Microsoft Corp., 632 F.3d 1292 (2011) (eliminating use of the 25% rule of thumb to estimate reasonable royalty rate for patent damages).
2 See Alice Corp. Pty. Ltd. v. CLS Bank Intern., 134 S. Ct. 2347 (2014)
3 See Trade Secrets Protection Act of 2014 (HR 5233); Defend Trade Secrets Act of 2014 in the Senate (S2267).
4 See, e.g., Am. Geophysical Union v. Texaco Inc., 60 F.3d 913, 931 (2d Cir. 1994) (finding photocopying of journal articles by science researchers at Texaco not protected by the fair-use doctrine).
5 The doctrine may include the right to produce replacement parts for the object, even if the replacement activity is on a commercial scale. See, e.g., Dana Corporation v. American Precision Company Inc., 827 F.2d 755 (Fed. Cir. 1987).
6 Digitization made possible widespread, online copying of copyright-protected music and literary works. DMCA helps control efforts to circumvent digital rights management and provides a notice and takedown process to limit the copyright infringement liability of online service providers. See 17 U.S.C. § 512, 1201-05, 1301-22.
7 See Deven R. Desaiand, Gerard N. Magliocca, “Patents, Meet Napster: 3D Printing and the Digitization of Things,” 102 Geo. L.J. 1691 (2014).
8 See Bryan J. Vogel, 3D Printing, Materials Development, and IP: Protecting What’s in the Printer, 88 PTCJ 502 (6/13/14).
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