3D-printing has many implications in view of intellectual property – Paul Banwatt talks with Ken Suzan about this topic. Also we cover the reintroduction of the Innovation Act by Bob Goodlatte, pushing patent reform in the US. Lastly, we invite you to our IP Fridays Meetup in San Diego. We are also proud to be co-hosts of the Meet the Bloggers event in San Diego as well!
Rolf Claessen and Kenneth Suzan
Episode 24 – March 20, 2015
RC = Rolf Claessen
KS = Kenneth Suzan
PB = Paul Banwatt
Hi. This is Gene Quinn. I am a patent attorney and the founder of ipwatchdog.com and you are listening to IP Fridays.
KS: Hello and welcome to this episode of IP Fridays. Our names are Ken Suzan and Rolf Claessen and this is THE podcast dedicated to Intellectual Property. It does not matter where you are from, in-house or private practice, novice or expert, we will help you stay up-to-date with current topics in the fields of trademarks, patents, design and copyright, discover useful tools and much more.
RC: Welcome to the 24th episode of IP Fridays. As you know, we are hosting an IP Fridays Meetup in San Diego on the 5th of May and we can proudly say that 20 free tickets to our Meetup went away really quickly and are sold out now. So we decided to introduce a new ticket for $25.00 which is basically covering our additional costs with the Hyatt Hotel in San Diego. So if you want to attend our IP Fridays Meetup in San Diego on the 5th of May you can still do so by signing up at www.ipfridays.com/inta and you will just be required to cover our additional costs that are involved with your participation. In addition, we are very proud to be co-hosts of the “Meet the Bloggers” Event on the 4th of May, in the evening, and there will be news coming up very soon.
Today I will tell you about the reintroduction of the Innovation Act in the U.S. to fight the patent troll problem so since majorities have changed in Congress and the Senate it is expected that this Innovation Act will be passed quite quickly but before we jump into that story, we have our special guest today. Ken had the chance to interview Paul Banwatt. He is COO and General Counsel of Matter and Form Inc. which is a company focused on 3D scanning and 3D printing and Paul will talk about the legal issues around 3D printing.
KEN SUZAN’S INTERVIEW WITH PAUL BANWATT:
KS: Rolf, today we are talking about the growing trend of 3D printing with Paul Banwatt, the COO and general counsel to Matter and Form Inc., the manufacturer of a high tolerance 3D scanner.
Paul Banwatt was previously an associate at Gilbert’s LLP in Toronto, Canada. Paul’s practice was dedicated to innovative and creative industries and included software and technology, copyright, trademark and patent litigation, government relations and advocacy, global health law, and social finance. Paul’s practice also included entertainment law.
Paul is also a musician. As a musician, Paul’s bands (The Rural Alberta Advantage, Woodhands) received two 2012 Juno nominations, charted on the Billboard U.S. Top 200, played at the 2011 Coachella Music Festival, and have been featured in numerous publications including Spin, NME, Playboy Magazine, The New York Times and The Globe and Mail.
Paul has a J.D. and a B.A. in Political Science and Economics, both from the University of Toronto.
Paul is also co-founder and author of the 3D Printing law blog “Law in the Making” – www.lawitm.com.
Welcome Paul to IP Fridays.
PB: Thanks very much for having me.
KS: Paul, can you tell our listeners about your company, Matter and Form Inc.?
PB: We are a start-up from Toronto, Canada. The company was actually launched through an Indiegogo Crowdfunding Campaign back in 2013 and what the campaign was around was a 3D scanner; a new, low cost 3D scanner. When the campaign was launched, it quickly became the highest crowdfunded campaign in the history of the platform Indiegogo outside the U.S. At the time, Kickstarter, which people are probably more familiar with, wasn’t available to Canadians so Indiegogo was the only option and so the company sold about 1,000 scanners through that crowdfunding and it basically kicked off. I ended up meeting the company a little bit later. I was practicing law in Toronto and I got into 3D printing and scanning from an IP perspective as a lawyer just looking at these things as new copying devices and starting to think about some of the issues around that. I ended up being on a radio show with some of the guys from the company and we met and hit it off. After that, they became a client of mine and eventually I just jumped right in and joined the company as COO and GC. So, since then we have been selling the 3D scanner, the Matter and Form 3D Scanner, and it is number one on Amazon and top-rated and the reason is that it is kind of a disruptive technology. This ability to take any object and digitize it and basically use it as a 3D model and then you can 3D print it or put it in a video game. It’s kind of new for that kind of technology to be available to people for under $600.
KS: Wow, that is a great price point. Can you describe the growing trend of 3D printing and where do you think it will be in a few years from now?
PB: Well, I think one of the things that is interesting about 3D printing is, one of the reasons is it so trendy, is that this technology – like our 3D scanner – this technology of 3D printing and scanning is now available to more people than it ever has been. So, 3D printing as a concept it refers to additive manufacturing and what that simply means is that it is the process of building something up layer by layer. You can contract that with subtractive manufacturing which is like a C and C machine which takes a larger object and cuts it down to a particular shape. 3D printing is about building up. That idea has been around for a long time so there were two large 3D printing companies that were started in the late 80’s and early 90’s, they were called Stratasys and 3D Systems. They filed a bunch of patents at the time on these 3D printing technologies. One was called stereolithography and one was called FDM or fuse deposition modeling. So these two technologies, for about 20 years, were held and patented by these two companies and then in the late 2000’s, around 2009, these patents started expiring and so what happened was this new focus on low cost 3D printing exploded because suddenly companies were able to employ some of these technologies that were now off patent and provide these low cost 3D printing solutions to the market. So when you say where is it going to be in a few years, well, one of the things that that explosion of interest in 3D printing has caused is an interest in the concept of additive manufacturing applied to all kinds of things that we never thought about before. So we are talking about food, we are talking about 3D printing houses, we are talking about 3D printing anything because now that the technology is available and people are able to use it and see it up close, they are thinking what else can I do with it. So it’s kind of like asking where computers would be in a few years back in 1975. It’s where people are going to take them and it’s hard to predict in some ways.
KS: Yes. Why is 3D printing a hot topic for IP practitioners and their clients? What is it that is motivating or propelling the use?
PB: Like I said, fundamentally, these things are copying machines. They are things that can take a digital model that is on your computer and then spit out a physical object or things that can take a physical object and then create a digital representation. Anytime you invent a new copying machine, whether it’s the printing press or a computer, or a photocopier, I think you create a set of IP issues that are interesting to IP practitioners and their clients so that’s why I think this is such a hot topic. We’ve essentially created new copying machines here.
KS: Yes, and I understand that you are going to be speaking in March at an INTA Program on 3D printing?
PB: That’s right, in New York and I’m really excited. Organizations like INTA putting their focus on a subject like 3D printing and scanning is really important because, you know, there are conversations that we have to have about the implications of this technology but it is important for those conversations to be had early so we don’t have some kind of “the sky is falling” panic moment which, I think, is something like what you saw with digital music back in the 90’s and NAPSTER. You know, if we have these conversations now before things get a little too hairy, I think we can actually come up with creative solutions and ways for people to monetize their IP in light of the technology as opposed to panicking about devaluing their IP or having it stolen.
KS: That’s a good segue, Paul. I was about to ask you what are some of the ways that companies are using 3D technologies to augment or increase the value of their IP?
PB: Well, I think it really is a moment for IP rights holders, particularly companies that have 3D IP already or that have IP that could be made to 3D. An example of something that could be made 3D is if you had something like comic book characters that could be represented in a 3D form or if you are Coca-Cola and you have your Coke bottle that is 3D trademarked, I think it is time right now for companies to sort of take stock of their 3D intellectual property and then once you have done that, the time is now to think about how can I take this 3D IP and use these exciting new technologies to increase its value. So there are a bunch of really great examples out there of companies that are doing this. Nokia, for example, made it possible for people with 3D printers to print out custom phone cases for their phones and I’m not talking about just like an outer shell or a case you put on your phone, but replacing the whole back of the phone with something that you have printed off yourself and designed perfectly. So you could make it fit your hand perfectly and if you think about what that means, it’s brand new, right? And it is exciting. And someone is still going to go buy a Nokia phone even though Nokia has basically open-sourced that part of their design. So that is a way to increase your value. There are other ways, for example Hasbro has a really exciting partnership that they have announced with Shapeways which is a company online where you can go and find 3D models and have them printed off on some really great high quality 3D printers that Shapeways has and you just choose what you want and they will print it for you and send it to you. So Hasbro has teamed up with them to create something called Super Fan Art where designers can go and create new custom fan art, right now I think the only brand they have is My Little Pony, but they are looking to expand it, and they can create their own My Little Pony action figures and you can buy those and they have sort of opened it up to fans to be creative while still monetizing that IP that they have in the My Little Pony brand.
KS: That’s fascinating. Paul, can you also speak to the role of 3D printing as it relates to counterfeiting. I understand that this is going to be a growing trend in the market.
PB: Yes, absolutely, and I mean as much as I do like to emphasize the positives here, there are certain risks that everyone should be aware of and 3D printing certainly creates a risk when it comes to counterfeits. What it does is it opens the possibility of, you know, if you think about it in the world of counterfeiting, we are worried about things like border measures. But what if you can transmit a file from one place to another and then print out a physical object across that border without ever having to physically take the object across the border? You enter into a whole new world of counterfeiting when it is possible to print something out, to transport something essentially, from one place to another without actually having to physically take it there. So, I mean, I think there is major risks and, like I said, these are in many ways duplicating machines – once you can 3D print one thing you can 3D print a thousand of them. Once you take this capability into people’s houses, their ability to print out something that is a counterfeit is pretty extreme and the first places you might see it in this world of low cost 3D printing are things made out of the kinds of materials that these low cost 3D printers are using, so, plastics essentially, if you think about toys. This is an issue that hasn’t really been dealt with yet. If I was to go on a popular 3D printing file hosting service like there is a site called Thingiverse where you can download models for free and share them for free, I could go and in two seconds I could find an Imperial Star Destroyer that looks just like the one from Star Wars and I can take it and I can print it in plastic and it will look like a little plastic Star Destroyer toy that I now have and it’s a tough question about what are you going to do about that if you are Lucasfilm or Disney or whatever empire owns the rights to the Star Destroyer right now. You know, how are you going to deal with the fact that people can just print out their own at home?
KS: Would the size be the same when they did the printing or would it be a little miniature given the materials that are in the printer?
PB: Well, it depends. So each printer has its own capabilities. A typical low cost 3D printer is probably going to print you something that is maybe 6 to 9 inches by 6 to 9 inches. That would be roughly the size that you would be looking at. But more expensive ones can print larger objects. Like I said, there are 3D house printers out there so the sky is kind of the limit depending on how much you are going to pay for one of these things. But for $500 or less I could get a 3D printer that could print me a little toy, certainly.
KS: Wow. Now what steps can trademark owners take to protect their IP in this world of 3D printing?
PB: It’s a tough question. I would say that that is one of the struggles that we are currently dealing with in this world is, what should we be doing? If you look at copyright and the solutions that have been put into place for a copyright and digital violations of copyright such as the DMCA creates a mechanism similarly in Canada the Copyright Modernization Act was passed to create a similar mechanism. The DMCA has notice and takedown. In Canada we have something called notice and notice where a notice of a violation is still passed along to the person who made the infringement. You know, that kind of thing, that kind of automated system doesn’t really exist in the trademark world. But, on the other hand, most of these sites have created ways for trademark owners to submit a notice of potential infringement. The service providers, I think, are going to be critical here. Sites like Thingiverse, sites like Shapeways and Cashew which is a service that my company is about to launch which is similar in some ways, most of these sites are creating ways for trademark owners to at least submit a notice of a potential infringement and it then becomes incumbent on the site to take whatever steps are necessary because, to be honest, as a company that is going to put one of these sites into existence, we are just as worried about issues of secondary liability and we certainly don’t want to be hosting infringing content.
KS: That’s right. Now we have been talking about the sites that allow for sharing of designs and enable the printers to actually print things, are there other important legal issues in connection with this process? Are there ways that one could implore say a digital watermark or some other mechanism so that if someone tried to infringe, the printer would be disabled, for example?
PB: You know there is always the possibility of those kinds of systems. The issue is that the kinds of files that people are dealing with, this world of 3D printing, it has been very open from the beginning so there has been no DRM built into this system, sort of baked into this system, in fact there has almost been the opposite. So to create some sort of closed system now would require you to create your own separate little eco system that is almost apart from what everybody else is doing. So while it is certainly possible to create a printer that will only print files that are locked down by some kind of DRM, you wouldn’t really be participating in the whole 3D printing community the way it exists. I think that is one solution, but I think it would be a difficult one. On the other hand, there are other things that sites are trying to do. One challenge that you face is when you have a 3D model hosting site, to display that 3D model on a person’s computer in a secure way is actually very difficult because you end up having to stream the actual data that comprises the model to the person so it’s easy for them if they were so inclined to steal that model even if you don’t necessarily want them to. It’s kind of like video that way where people are able to capture a stream and then save a local copy even if that wasn’t the site’s intent. But there are technologies coming down the pipe that might help in that regard.
KS: Interesting. Now, Paul, if a company sees its design on a 3D online printing online platform, is there a sort of checklist or steps that they should take once they discover this?
PB: Like I said, there are some sites that are basically following a DMCA style notice for other kinds of IP infringement that might occur. So if it is copyrights, a certain DMCA style notice is in place on almost every website that hosts 3D content. But with other kinds of IP, even patents, are something worth thinking about. We haven’t actually seen a test case involving patent infringement hosted on one of these sites but I’m sure the day is coming. There was a blog that I used to follow where the guy was basically taking expired patents and taking the drawings from them and creating 3D models that you would then put up on Thingiverse and certainly you can’t say with certainty that the patented subject matter resided in the model that he was creating, but it’s entirely possible. I remember one was just a chess set that was portable and had some portable features to it. Certainly I would suspect that had that been a valid patent still, that model would have been something that could have infringed the original patent. So that day is coming and I think the best thing that right owners can do is insist that these kinds of hosting sites have at least a mechanism for notice of infringement.
KS: Paul, this has really been truly fascinating. Thank you so much for joining us today on IP Fridays.
PB: Thank you so much for having me.
RC: If you want to learn more about Matter and Form Inc., you can go to www.matterandform.net.
So the U.S. Congress now reconsiders the Anti-Patent Troll Law. Many Acts have been introduced during the last year but the first person who actually introduced such reform for the patent law was Bob Goodlatte last year and this year he reintroduced a slightly amended version of his Innovation Act on the 5th of February. Bob Goodlatte is the Chair of the House Judiciary Committee and the Bill, the Innovation Act, actually passed the House of Representatives last term very easily but then the Senate really didn’t consider the Act so now Bob Goodlatte reintroduced this Act, the Innovation Act, on the 5th of February. Many observers think that this Innovation Act will pass quickly but there is also a lot of opposition to this Bill. One important change centers around fee shifting so the Court could award attorneys’ fees and litigation related expenses to the prevailing parties absent of finding that the position and conduct of the non-prevailing party or parties were reasonably justified in law and effect or that a special circumstance make an award unjust. So that presumes that the favor of fee shifting may discourage some of the patent owners to litigate their patents and in fact I am a German patent attorney and in Germany we have the fee shifting so we have the awarding of costs to the prevailing parties and we don’t really see any substantial activity of patent trolls or let’s say non-practicing entities in Germany. Of course, there has been some activity, but by far not to the extent like in the U.S. Some argue that the fee shifting is already case law since the decision of the Supreme Court in April 2014, Octane Fitness, LLC against Icon Health & Fitness. Some of you might have attended a SXSW last week. Why am I mentioning this? On Sunday the festival featured a session titled “How Public Policy Protects Patents and Startups” that was hosted by Twin Logics Strategies, a lobbying shop in Washington. The panel featured not only Yahoo’s Governmental Affairs Director but also the Senior Counsel for the House of Judiciary Committee in Congress which in turn is led by Republican Bob Goodlatte who introduced the Innovation Act. So I found that to be an interesting move by the lawmakers to attend SXSW and discussing these issues. Let us know what you think in the comments to this episode.
I hope you enjoyed this episode and I will talk with you next time.
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