1.3D Printing and the Future (or Demise) of Intellectual Property John Hornick July 2013

2. 2 First, a Disclaimer Are these the shadows of the things that Will be, or are they the shadows of things that May be? Ebenezer Scrooge, to the Third Spirit 3. Keep in Mind . . . 4. 4 Keep in Mind Tipping into the mainstream Everything will change When you can make anything Think about the implications 5. Why the Future (or Demise) of IP? 6. 6 Three Reasons Democratization of manufacturing Open collaboration movement 7. 7 Some People Dont Like IP There is a persistent widespread belief that intellectual property law (and patents in particular) encourage innovation. This is intuitive, however, the evidence to the contrary is now overwhelming and the unavoidable conclusion is that intellectual property actually stifles innovation. 8. 8 The Players 8 HIGH-END PRINTERS LOW-COST PRINTERS 3D Kits, A1 Technologies, Ac123Dc, Afinia, Airwolf 3D, Asiga, B9Creations, BatBot, Bits from Bytes, Blue Printer, CB-Printer, Code-p, CSP, Cubify, Deezmaker, Essential Dynamics, Eventorbot, EZ 3D printers, Fabbster, Fablicator, Felix Printers, Formlabs, German RepRap Foundation, Hot Proceed, Hyrel 3D, Intelligent Machine Inc., Invent Apart, iRapid, Leapfrog, Lulzbot, Makemendel, Makergear, MaukCC, Mbot 3D, Mendel Parts, MendelMax, miniFactory, Mixshop, Multistation, NW RepRap, PP3DP, Printrbot, Rays Opitcs, RepRap France - eMotion Tech, RepRapPro, ReprapSource, Robo 3D, Robot Factory, Romscraj, Sharebot, Solido, Solidoodle, Sumpod, Tantillus, The Future is 3-D, Tinkerine Studio, TrinityLabs, Type A Machines, Ultimaker, Ultra-Bot, Weistek, York 3D Printers, Zbot.cc 8 9. Where is the IP in 3D Printing? 10. 10 Wheres Waldo? AM machines driven by software or firmware CAD/CAM file fuse, layer on layer extruded material, powder, or sheets heat, chemical, glue, light, electron beam Post-production work Hybrid machines 11. 11 Wheres Waldo? AM machines driven by software or firmware CAD file fuse material layer on layer Extruded material, powder, or sheets Heat, chemical, glue, light, knife, electron beam Post-production work Hybrid machines 12. Why 3DP May Change Everything 13. 13 Why It May Change Everything: Micro One machine makes all, no re-tooling or assembly More efficient/impossible designs, interior structures Affordable customization Complexity is free Batches of one, created on demand Efficient use of raw materials (less waste) Less energy (no shipping) 14. 14 Why It May Change Everything: Micro One machine makes all, no re-tooling or assembly More efficient/impossible designs, interior structures Affordable customization Complexity is free Batches of one, created on demand Efficient use of raw materials (less waste) Less energy (no shipping) 15. 15 Why It May Change Everything: Macro Facially inconsistent effects Manufacturing Renaissance in countries with Strong intellectual capital But high manufacturing costs Repatriation of jobs No advantage in offshoring 16. 16 Why It May Change Everything: Macro But Disruption/destruction of traditional models: manufacturing, distribution, shipping, retail Future sales: Designs, not products Print at point of assembly/consumption Just in time Printing in-house, by service bureaus, by you and me 17. 17 Why Macro Change Will Disrupt IP The paradigm shift: Democratization of design Lower entry barriers Many small businesses Fundamentally different designs Printing away from control As democratization increases . . . 18. 18 Checklist For IP Disruption Industrial scale Large build platform Speed or scale Industrial or Home scale Hybrid materials Ability to print complex structures Micro scale printing Hybrid machines Innovators, especially . . . 19. 19 Checklist For IP Disruption CEO of Autodesk Carl Bass will speak from personal experience about how to get the young makers in your life empowered to make amazing things and explore the world around them (Bay Area Maker Faire May 2013) 20. 20 Checklist For IP Disruption One more thing: 21. 21 Checklist For IP Disruption One more thing: Ability to do all of this away from control At home Uncontrolled sources 22. 3DP Today 23. 23 3DP Today Rapid prototyping: about 70% of the market Shortens the development life-cycle Enables experimentation and innovation Easy tweaking Perfect for one-offs Saves cost Increases confidence in final product 24. 24 3DP Today Manufacturing: growing rapidly of all machines sold Hot areas: Aerospace Automotive Healthcare Fashion Complex structures 25. 25 3DP in Aerospace Boeing Airbus: wing brackets North Western Polytechnical U (China): titanium wing spar 26. 26 3DP in Aerospace GE: Acquired 2 AM companies Parts for 4000 LEAP engines DMLS titanium powder Fuel nozzle DMLS Cobalt-chromium powder Rolls Royce Merlin project 6 engine makers 27. 27 3DP in Automotive Ford (and others) BMW 3 Cool Cars 28. 28 3DP in Healthcare 3D implants: perfectly match a patients body; better fixation Walter Reed Army Medical Center: 3DP 60+ titanium cranial plate implants 2011: 3DP jaw implanted in an 83-year old woman March 2013: 75% of a mans skull replaced with a custom-made implant (Oxford Performance Materials) 29. 29 3DP in Healthcare Proof of concept customizable artificial heart 30. 30 3DP in Healthcare Proof of concept customizable artificial heart 31. 31 3DP in Healthcare Ears (cosmetic and bionic) Fingers Noses Models Custom hearing aids (95%) Dental (crowns, aligners) 10,000/day Prosthetics Custom coverings for artificial limbs Bladder, liver, kidney Bone/bone cells DNA Custom Drugs Vaccines Facial Reconstruction Joints, discs, bones, spine Stem cells Tissue (ONVO) 32. 32 3DP in Fashion (not just shoes) Dita Von Teese unveiled world's first fully 3DP dress Designed with Shapeways assembled from 17 pieces, dyed black, lacquered and adorned with over 13,000 Swarovski crystals to create a sensual flowing form 33. 33 3DP of Complex Structures Stratasys and Optomec: first fully 3DP electro- mechanical structure Optomec: antenna Harvard/U of Illinois: microbatteries Disney: interactive toys Princeton U: bionic ear 34. 34 IP Implications Companies IP Philosophy Protectability IP infringement: Types Likelihood Effectiveness of enforcement Scale Risk to IP system: Aerospace/Healthcare vs. Automotive/Fashion 35. 35 IP Implications Companies IP Philosophy Protectability IP infringement: Types Likelihood Effectiveness of enforcement Scale Risk to IP system: Aerospace/Healthcare vs. Automotive/Fashion 36. 36 IP Implications Companies IP Philosophy Protectability: 12,000 PATENT APPLICATIONS IP infringement: Types Likelihood Effectiveness of enforcement Scale Risk to IP system: Aerospace/Healthcare vs. Automotive/Fashion 37. 37 IP Implications Companies IP Philosophy Protectability IP infringement: Types: PATENT, COPYRIGHT, TRADE SECRET, TM Likelihood Effectiveness of enforcement Scale Risk to IP system: Aerospace/Healthcare vs. Automotive/Fashion 38. 38 IP Implications Companies IP Philosophy Protectability IP infringement: Types Likelihood Effectiveness of enforcement Scale Risk to IP system: Aerospace/Healthcare vs. Automotive/Fashion 39. 39 IP Implications Companies IP Philosophy Protectability IP infringement: Types Likelihood Effectiveness of enforcement Scale Risk to IP system: Aerospace/Healthcare vs. Automotive/Fashion 40. 40 IP Implications Companies IP Philosophy Protectability IP infringement: Types Likelihood Effectiveness of enforcement Scale Risk to IP system: Aerospace/Healthcare vs. Automotive/Fashion 41. 41 IP Implications Companies IP Philosophy Protectability IP infringement: Types Likelihood Effectiveness of enforcement Scale Risk to IP system: depends on democratization Aerospace/Healthcare vs. Automotive/Fashion 42. 42 IP Implications Companies IP Philosophy Protectability IP infringement: Types Likelihood Effectiveness of enforcement Scale Risk to IP system: depends on democratization Aerospace/Healthcare vs. Automotive/Fashion 43. Materials: Golden Age 44. 44 Ordinary Materials Mostly plastics (ABS, PLA) A growing range of printable materials: Metals Ceramics Food Glass Wood 45. 45 Not-So-Ordinary Materials Washington State U: bone-like material (support for new bone growth) U of Glasgow: organic compounds and inorganic clusters (customized medicines) Cambridge U: thin film transistor U of Warwick: Carbomorph Conductive plastic functioning electronic device 46. 46 Not-So-Ordinary Materials Hybrid inks: new combinations of physical, electrical, and mechanical properties Colloidal: advanced ceramic, metallic, and polymer materials Fugitive: tissue engineering, self-healing materials Silver nanoparticle: conductive materials, implantable & wearable electronics (antennas, sensors), transparent conductive devices Polyelectrolyte: drug delivery, tissue engineering 47. 47 Not-So-Ordinary Materials Graphene Flexible Transparent Conductive Harder than diamond Stronger than steel 48. 48 Not-So-Ordinary Materials Chiplets (Xerox PARC) Grain of sand Containing intelligent data Microscopic electronic building blocks Voxels 3D pixels Any repeatable shape Multiple materials per voxel Loaded with active components 49. 49 IP Implications Companies IP Philosophy Protectability IP infringement: Types: PATENT, COPYRIGHT, TRADE SECRET, TM Likelihood Effectiveness of enforcement Scale Risk to IP system: LOW 50. 3D Printing Away From Control 51. 51 3DP Away from Control CES 2013 Anyone with a digital design: Bypass traditional supply chain Self-manufacture Microsoft Kinect has been adapted for 3D scanning at home Good enough technology Why the experts are wrong 52. 52 3D Systems: Targeting Future Innovators 53. 53 3DP Away from Control Makers Open design/mfg community Collaborative innovation Accelerated innovation Wikipedia is open/ Encyclopedia Britannica was closed Open 3DP: same potential Open-source RepRap printer Self-replicating machine 20,000+ Think T3 54. 54 IP Implications Major disruption of business models Infringement risk: HIGH IP irrelevant (3 Is) + Unprotectable substitutes for IPd products Bigger issue: disruption of markets Eliminates quasi-IP protection of economies of scale Could reduce need for mass production 55. Why 3DP Will Rock The IP World 56. 56 Scope of the Problem Cuts across all IP Cuts across ALL technology and products Anyone can: Recreate an existing product design Manufacture Distribute AFC infringement will proliferate IP becomes less relevant 57. 57 Scope of the Away From Control Problem Will AFC 3DP cripple traditional manufacturers? Think internet piracy in the music and movie industry Will AFC 3DP crush copyright & design patents? Sculptures are easily duplicated Toys can be made at home, designs can be shared P2P Will AFC 3DP overwhelm patent owners? Checklist 58. 58 IP Holders v. Makers IP owners at the barricades/history repeats itself: Music industry fought home taping Movie industry fought the VCR Internet decimated music industry Internet + 3DP = . . . . 59. 59 Copyrights Away From Control Most 3D objects not copyrightable Infringement of any design as easy as downloading illegal music Software and CAD files DMCA DRM??? At odds with innovation & Makers you are going to be thrilled with Corynne McSherrys talk on the legal rights of Makers and how to fight the copyright laws that are on the horizon 60. 60 Trademarks Away From Control Counterfeiting on steroids Exact copies of objects may bear a third party trademark Inability to control quality Traditional manufacturers may try to protect designs as: Product configurations Trade dress Generic products may trump 61. 61 Utility Patents Away From Control May stress the patent system as the digital revolution stressed the copyright system Small to large scale copying/printing of almost anything will be possible P2P filing sharing of CAD files Enforcing patents will be challenging Crowdsourcing prior art Algorithm Preissuance Submissions Defendant assistance 3Is 62. 62 Design Patents Design patent renaissance? A long-neglected tool Automobile manufacturers: parts Design-arounds may be easy Same problems as utility patents 63. 63 The BIG Picture Disruptive Game Changers: Digital Revolution Early Apple ad: create dazzling color displays and invent your own Pong games Whats the Internet? Why would I need a Smart Phone? 64. 64 The BIG Picture 3DP Revolution Same questions Much speculation Elements falling into place Economist 4/12: 3rd industrial revolution 65. 65 Checklist for the Revolution/IP Disruption Industrial scale Large build platform Speed or scale Industrial or Home scale Hybrid materials Ability to print complex structures Micro scale printing Hybrid machines Innovators, especially . . . 66. 66 Checklist for the Revolution/IP Disruption Industrial scale Large build platform Speed or scale Industrial or Home scale Hybrid materials Ability to print complex structures Micro scale printing Hybrid machines Innovators, especially . . . 67. 67 Checklist for the Revolution/IP Disruption Industrial scale Large build platform Speed or scale Industrial or Home scale Hybrid materials Loughborough University HSS Ability to print complex structures Micro scale printing Hybrid machines Innovators, especially . . . 68. 68 Checklist for the Revolution/IP Disruption Industrial scale Large build platform Speed or scale Industrial or Home scale Hybrid materials Ability to print complex structures Micro scale printing Hybrid machines Innovators, especially . . . 69. 69 Checklist for the Revolution/IP Disruption Industrial scale Large build platform Speed or scale Industrial or Home scale Hybrid materials Ability to print complex structures Micro scale printing Hybrid machines Innovators, especially . . . 70. 70 Checklist for the Revolution/IP Disruption Industrial scale Large build platform Speed or scale Industrial or Home scale Hybrid materials Ability to print complex structures Micro scale printing Hybrid machines Vienna Institute of Technology Innovators, especially . . . 71. 71 Checklist for the Revolution/IP Disruption Industrial scale Large build platform Speed or scale Industrial or Home scale Hybrid materials Ability to print complex structures Micro scale printing Hybrid machines Innovators, especially . . . 72. 72 Checklist for the Revolution/IP Disruption Industrial scale Large build platform Speed or scale Industrial or Home scale Hybrid materials Ability to print complex structures Micro scale printing Hybrid machines Innovators, especially kids 73. 73 Checklist For IP Disruption One more thing: 74. 74 Checklist For IP Disruption One more thing: Ability to do all of this away from control At home Uncontrolled sources 75. 75 Checklist For IP Disruption One more thing: Ability to do all of this away from control At home Uncontrolled sources 76. 76 3D Printing Revolution Tipping point 2011: 80K machines Businesses will change, adapt, vanish Evolve or Die New businesses will emerge Lines between manufacturer, retailer, and user will blur It IS happening quickly 77. 77 Big Issues for IP Is the existing IP regime up to the task? How can protection from infringement be balanced with the ability to innovate? Will IP survive, or are we headed for a worldwide open technology community? Is IP fundamentally in conflict with the 3D world? 78. 78 Takeaways Everything will change When you can make anything 79. 79 Takeaways Everything will change When you can make anything IP, its not dead yet! 80. 80 Thank you for your time! john.hornick@finnegan.com www.finnegan.com Twitter @ JHornick3D1Stop 81. 81 Disclaimer These materials are public information and have been prepared solely for educational and entertainment purposes to contribute to the understanding of U.S. intellectual property law. These materials reflect only the personal views of the authors and are not a source of legal advice. It is understood that each case is fact specific, and that the appropriate solution in any case will vary. Therefore, these materials may or may not be relevant to any particular situation. Thus, the authors and Finnegan, Henderson, Farabow, Garrett & Dunner, LLP cannot be bound either philosophically or as representatives of their various present and future clients to the comments expressed in these materials. The presentation of these materials does not establish any form of attorney-client relationship with the authors or Finnegan, Henderson, Farabow, Garrett & Dunner, LLP. While every attempt was made to ensure that these materials are accurate, errors or omissions may be contained therein, for which any liability is disclaimed.