3-D Printing Stirs Copyright Clash on Homemade IPhone Gear

3-D Printing Stirs Copyright Clash on Homemade IPhone Gear: Tech

Fernando Sosa had no doubt his sword-covered iPhone dock inspired by the hit TV series “Game of Thrones” would become a top seller for his small manufacturing startup. Then he heard from HBO. Defending a copyright on electronics featuring its show, HBO in February demanded Sosa halt sales on his website. He did, and gave more than a dozen customers refunds for $49.99.Sosa is part of the swelling ranks of designers facing legal challenges for using consumer versions of 3-D printers once found only on factory floors.

“It’s going to be a problem for the future,” said Sosa, co-owner of Nuproto LLC in Orlando, Florida. “A lot of new products are going to come out, and big companies are going to squash the little companies.”

Clashes are cropping up as 3-D printers become more affordable and websites such as Thingiverse.com post blueprints to help the machines build everything from toy tanks to replacement toaster parts. The disputes are ushering in a new era in legal skirmishes over high-tech designs, threatening a printing market that’s estimated by Wohlers Associates Inc. to surge to $10.8 billion by 2021 from $2.2 billion last year.

“We’re at the tipping point,” Darrell Mottley, a patent and trademark attorney at Banner & Witcoff Ltd. in Washington, said in an interview. “The technology has got to where it’s not that expensive. If you’re a manufacturer and people start making their own replacement parts, what does that mean?”

Falling Prices

3-D printers build an object by churning out thin layers of plastic one on top of the next, following instructions from a computer-drawn blueprint. They eliminate the need for older manufacturing techniques such as injection molding. Designers can craft their own schematics or download patterns online.

The latest consumer machines from companies such as 3D Systems Corp. (DDD) and Stratasys Ltd. (SSYS) sell at retail prices of less than $3,000, making the technology accessible to people who wouldn’t shell out more than 10 times that amount for industrial versions. More than 45,000 low-end models have been sold in the past three years, according to Todd Grimm, a board member of Additive Manufacturing Users Group.

3D Systems, a printer maker based in Rock Hill, South Carolina, is projected to post a 42 percent surge in revenue this year to $503.2 million, according to the average of analysts’ estimates compiled by Bloomberg. Consumer models such as the CubeX are starting to make a “meaningful contribution” to growth, Chief Executive Officer Abraham Reichental said last month.

MakerBot Buyout

Sales at Stratasys, based in Eden Prairie, Minnesota, are estimated to more than double to $462.6 million this year, according to data compiled by Bloomberg. The company agreed to buy Brooklyn-based 3-D printing startup MakerBot in June for at least $403 million to expand sales to consumers.

Nuproto’s Sosa uses a machine from Delta Micro Factory Corp., which charges from $899 to $1,649, according to its website. HBO is focused on protecting its copyrights no matter how objects are produced, according to Jeff Cusson, a spokesman for the network, which is owned by Time Warner Inc.

“We’re indifferent to the technology,” Cusson said. “If you are going to infringe on our copyright, we are going to take steps to prevent you from doing so.”

‘Right Safeguards’

As 3-D printing becomes more ubiquitous, websites that help people profit from their creations are being asked to remove some designs, according to Pete Weijmarshausen, CEO of New York-based Shapeways Inc. The company, which prints made-to-order products based on blueprints uploaded by users, has had five requests to remove items so far this year, he said. That’s about as many as Shapeways got in 2012.

Weijmarshausen is on the defensive to keep that number from climbing.

Many more legal disputes have been prevented by his team of engineers who vet every design, making sure nothing violates copyrights, trademarks or patents. If it raises a flag, Shapeways takes it down, he said.

“We have to be diligent about it,” Weijmarshausen said. “We have to put the right safeguards in place.”

In cases that do escalate, two things could tip the scales in designers’ favor: websites can protect themselves from litigation by warning users against transmitting blueprints for copied products; and, corporations may not want to risk the backlash of taking their fans to court.

Cautionary Tale

“They could spend years and millions of dollars suing customers, or they could make it easy for people to access their stuff online,” Michael Weinberg, a vice president at digital advocacy group Public Knowledge, said in an interview. So far, 3-D printing disputes have been playing out as cease-and-desist orders — no lawsuits have been filed.

The music business offers a cautionary tale, he said. The Recording Industry Association of America sued more than 35,000 people it accused of illegally sharing songs online, only to reverse course in 2008 and chase only the worst offenders.

Mindful of potential litigation, several startups are developing software to protect designs distributed on 3-D printing sites. Mountain View, California-based Authentise is developing SendShapes.com, which will stream instructions directly to 3-D printers, eliminating file downloads as a way to curtail the type of file-sharing that became rampant in the music industry.

‘Legal Alternative’

Another startup, Sweden-based 3DBurrito.com, is developing software that would safeguard designs sold on its marketplace. The company plans to negotiate licensing agreements to sell blueprints from corporations that sell everything from toys to movies.

“It’s important that they adopt this technology and work with marketplaces like ours to offer consumers a legal alternative,” CEO Max Fodérus said in an interview.

In the meantime, some corporations are embracing 3-D printers, as long as the machines aren’t being used to produce objects for sale.

Lego A/S, for example, is well aware that its fans use 3-D printers to create new bricks to enhance the sets it sells. One popular design on Thingiverse enables kids to adapt Lego bricks so they can connect to wooden train tracks made by Brio AB.

While personal use of these hybrid toys is fine, their sale may cross a legal line, Roar Rude Trangbaek, a spokesman for Lego, said in an e-mailed statement.

“We will definitely want to pursue infringements as and when we see them, in order to ensure the protection of our brand and ultimately the consumers,” he said.

Nokia Oyj (NOK1V), the mobile-handset manufacturer, goes even further in sanctioning 3-D printing. At the Mobile World Congress earlier this year, Nokia used a MakerBot machine to print custom cases for its Lumia 820 phone.

In a blog post interview in January, Nokia executive John Kneeland touted 3-D printers as a tool that may one day let consumers customize devices.

“You want a waterproof, glow-in-the-dark phone with a bottle-opener and a solar charger?” Kneeland said on the blog. “Someone can build it for you — or you can print it yourself!”

To contact the reporters on this story: Olga Kharif in Portland at okharif@bloomberg.net; Susan Decker in Washington at sdecker1@bloomberg.net

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: