The accessibility of 3D printing promises to empower both businesses and individuals to create products anywhere. For businesses, the potential to decentralise production and reduce shipping costs is immense. However, it also poses challenges to inventors and designers as the means to make infringing articles on a grand dispersed scale is enormous.
3D printing – today
The scale of opportunity is only now being uncovered; for example, a builder in China recently ‘printed’ ten homes in as many hours. In the field of medicine (‘bioprinting’), surgeons in the UK have 3D printed a cranium, as well as vertebrae, and a nose. Military applications include the use of 3D printed parts in the cockpit of RAF Tornado fighter jets. Astronauts aboard the space station have 3D printed replacement parts on demand. Consumer scale applications abound as well, with numerous businesses offering ‘customisable’ 3D printing for certain products. Accessibility of 3D printers has grown, as so-called ‘maker spaces’ have appeared, not only in repurposed ‘traditional’ copy shops, but also in public libraries.
Managing risk
The availability and increasing affordability of 3D printing could lead to an explosion of unauthorised goods being produced and sold. With decentralised manufacturing of illicit goods, identifying and pursuing infringers may be difficult, and costly. Traditional licensing of patents or design rights, often grant an indemnity to the licensee promising the licensee exclusivity to produce and sell a product. Yet imagine granting such an indemnity and then discovering that there are large numbers of small scale infringements via 3D printers. Chasing down and stopping multiple 3D printing infringers could be a considerable headache and be very costly. Not least because at the smallest scale it may not be an infringement legally, making it impossible to stop, yet the indemnity in your licence agreement may still require you to give compensation. So with the increasing access to 3D printing technology, licensors should consider the scope of the indemnity offered to licensees.
Revenue protection
As the technology continues to evolve, 3D printing will increasingly allow individuals to reproduce products in their own homes, and in many cases this will be done for their own personal use. Reproducing a patented or design protected product, for purely private non-commercial use, will not constitute an infringement of a patent or design. Whilst this exception to infringement may not be of significant concern where the occurrences are few, it is clear that that if 10,000+ customers were to 3D print their own personal copy of a patent or design this would represent a significant loss of revenue.
Manufacturers and rights holders need to be thinking what the future holds for them. Now is the time to work with their relevant trade bodies to consider how to align their business models to the 3D printing opportunities and risks. Identification now of gaps in legal protections, before technology or its use progresses to the point of posing a serious commercial risk, is the best course. There is a clear lesson from the music industry considering their initial reaction to online file sharing. The first response was traditional legal action to stop infringement but that proved costly and unable to stop the change in the market. Ultimately the embracing of paid for downloads and changing the approach to business proved the solution. Will 3D printing require the same changes from manufacturers?
New thinking on licences may be the answer. Consider for example, collecting arrangements from websites providing the downloadable 3D printing design files, or with those providing 3D printing services. Lower priced non-exclusive licences via the online providers of the designs downloaded to allow printing, may be another option. Any suggestion of the imposing of a levy on 3D printers is certain to be met with objections that technological innovation will be stifled. Yet now is the time to consider if your business needs to look at new models to protect revenue and encourage innovation in an era of 3D printing.
Maximising revenue through 3D printing
It is becoming common for consumers to have ready access to 3D printers, whether at home, at a local library, or a 3D printing service. This presents opportunities for new revenue streams by leveraging existing tools; for example the design files that manufacturers already hold and which are used for their existing (and past) product lines. One possibility is to offer customers the option to have their purchases printed at home or at a local service provider, instead of having items shipped. Service providers already exist which specialise in the encrypted transmission of design instructions from the manufacturer to the end user’s 3D printer; the customer pre-pays online for the number of products they wish to purchase, thereby ‘licensing’ copies from the manufacturer, and the 3D printer will be instructed to produce just the copies which have been ordered. Allowing the customer to have their purchase printed locally benefits both parties, by eliminating delivery time and shipping costs; as such arrangements become increasingly common, warehousing costs and retail space costs can be expected to diminish as well.
Another source of revenue may be to re-introduce products which are out of production; the market may be small but value could be there when you take out your production cost. All you need do is arrange transmission of the required design file to the customer’s printer. Online markets have already developed which focus on supplying 3D printed parts which are no longer available directly from the manufacturer. An added advantage to offering ‘on demand’ 3D printed replacement parts is that the manufacturer can maintain control over the quality of parts being used with their products.
The opportunity is here. Now is the time to re-think licensing, to embrace making available of old product lines, and seize the opportunity of distributed manufacturing. Now is the time to take a lead and be the innovators in a new 3D printing economy.