November 20, 2014

Patent Monetization in the 3-D Printing Era

3 min

There has been a lot of talk recently about the proliferation of 3-D printing and the impact it will have on intellectual property rights holders, particularly in the consumer products space. The time has come when consumer products and other goods can easily be reproduced on an inexpensive household 3-D printer. Many have equated this phenomenon to the digital revolution in the music industry, where record companies eventually transformed from selling physical products such as compact discs and DVDs, to selling electronic data files online.

Before switching to the online model, record companies attempted to enforce their intellectual property rights against file-sharing websites such as Napster and Grokster. However, after years of litigation, the record companies joined in on the digital revolution and licensed their rights, resulting in legitimate music download services such as iTunes.

Some predict that companies that manufacture and sell products will skip over the IP enforcement phase attempted by the record companies, and instead proceed directly to a licensing model. Indeed, Hasbro recently licensed some of its intellectual property rights to Shapeways, the world's largest online 3-D printing service. Under the agreement, fans of Hasbro brands such as My Little Pony can design, 3-D print, and sell their own My Little Pony creations online. In addition, rumor has it that one of the major players in the aerospace industry recently granted its customers access to the 3-D files for various spare parts, providing customers near on-demand access to those spare parts, and reducing aircraft down time. This trend will increase as 3-D printers become ubiquitous.

Licensing patent rights in the foregoing "digital" scenarios can prove challenging under conventional patent claiming practices. Companies looking to generate revenue by licensing their patent rights to 3-D file distributors, 3-D printers, and other similar entities, should consider alternative patent claiming strategies in addition to the conventional strategies already in place. For instance, with traditional patent claims, the act of 3-D printing the patented article by an end consumer would constitute direct infringement, but the act of storing or transmitting the underlying 3-D file would likely constitute contributory infringement, which is harder and more complicated to prove than direct infringement. Since the file distributors are easier to track and are thus better potential licensees or infringement defendants than the end consumers, patent owners should consider patent claim strategies that would capture the acts of file distributors as direct patent infringement. Innovators might consider patent claims directed to digital files containing instructions to 3-D print their inventions, as well as patent claims directed to electronic transmission of instructions to 3-D print their inventions. These strategies will put patent owners in a better position to license, and if necessary, enforce their patent rights once 3-D printing becomes ubiquitous.