Student: Jeppe Andersen Supervisor: John Howells The Intellectual Property Right Implications of Consumer 3D Printing Department of Business Administration School of Business and Social Sciences Aarhus University March 2014 Number of characters: 127.243
Abstract The recent developments in 3D printing technology have enabled consumers to print physical objects. The technology is still far from mature, however the speculations regarding the intellectual property right infringing capabilities of 3D printing have been hot topic. The legal questions have yet to be settled by the courts and this thesis will therefore answer the research question referring to legal cases regarding other technologies. Furthermore, assumptions about the future development of 3D printing technology lay the foundation for the analysis. The legality of the technology is analysed by comparing the 3D printing to the Sony Betamax technology and the 1984 landmark case. It is found that even though 3D printing technology is capable of infringing on most types of intellectual property rights it has significant non-­‐infringing uses and is therefore legal. Thus, the manufacturers of 3D printers will not be liable for secondary infringement. The implications of 3D printing technology on user manufacturing are analysed finding that the amount of products able to be user-­‐manufactured will increase, mainly due to the synergy of 3D printing technology, computer aided design software and the Internet lowering the design and production cost. Copyright is identified as one of the two types of intellectual property rights most likely to be infringed upon by users of 3D printers. The sharing of 3D print files is found likely to be distributed in much the same way as digital music files and the copyright infringement is therefore analysed by comparing the two. Several different initiatives to limit copyright infringement on digital music files are analysed. Furthermore, the likely effects of these initiatives are to have on 3D printing are discussed. Design patents are identified as another type of intellectual property right that consumer 3D printing is likely to infringe upon. Consumer infringement on design patents is not yet mainstream and commercial infringement is therefore discussed. These findings are then analysed regarding consumer infringement in order to see if the experiences can be used to limit future infringement. Furthermore it is discussed whether current intellectual property rights can accommodate mass-­‐customisation enabled by the developments in 3D printing. i Table of Contents ABSTRACT ......................................................................................................................................................... I 1. INTRODUCTION ......................................................................................................................................... 1 2. METHODOLOGY AND RESEARCH QUESTION ................................................................................... 2 2.1 LITERATURE REVIEW ................................................................................................................................................ 5 3. DELIMITATIONS ........................................................................................................................................ 7 4. TECHNOLOGY .......................................................................................................................................... 10 4.1 3D PRINTING ........................................................................................................................................................... 10 4.2 3D SCANNING ........................................................................................................................................................... 13 4.3 REALITY OR SCIENCE FICTION .............................................................................................................................. 14 5. INTELLECTUAL PROPERTY RIGHTS ON 3D PRINTS ................................................................... 16 5.1 COPYRIGHT ............................................................................................................................................................... 16 5.2 PATENT ..................................................................................................................................................................... 17 5.3 TRADEMARK ............................................................................................................................................................. 17 5.4 DESIGN PATENT ...................................................................................................................................................... 18 5.5 TRADE SECRET ......................................................................................................................................................... 19 6. THE IMPLICATIONS OF 3D PRINTING ON THE FUTURE OF MANUFACTURING ................. 20 6.1 SINGLE-­‐USER INNOVATION ................................................................................................................................... 20 6.2 PRODUCER INNOVATION ........................................................................................................................................ 21 6.3 OPEN COLLABORATIVE INNOVATION .................................................................................................................. 21 6.4 REASONS FOR USER INNOVATION ........................................................................................................................ 22 6.5 USER INNOVATION AND INTELLECTUAL PROPERTY RIGHTS .......................................................................... 23 6.6 EFFECTS OF 3D PRINTING AND INTERNET TECHNOLOGY ON MANUFACTURING AND USER INNOVATION
............................................................................................................................................................................................ 26 7. LEGAL CASES ........................................................................................................................................... 28 7.1 SONY V. UNIVERSAL CITY STUDIOS ...................................................................................................................... 28 7.2 MGM V. GROKSTER ................................................................................................................................................. 29 7.3 LEGALITY OF 3D PRINTING AND SCANNING TECHNOLOGY ............................................................................. 30 7.4 ONLINE FILE SHARING ........................................................................................................................................... 30 7.5 CEASE AND DESIST .................................................................................................................................................. 32 7.5.1 Penrose Triangle .............................................................................................................................................. 32 7.5.2 Warhammer Figurines .................................................................................................................................. 32 7.5.3 Game of Thrones .............................................................................................................................................. 33 7.6 PROBLEMS WITH THE DIGITAL MILLENNIUM COPYRIGHT ACT ..................................................................... 33 8. POTENTIAL INFRINGING USES OF 3D PRINTING ......................................................................... 35 8.1 TRADE SECRETS ....................................................................................................................................................... 35 8.1.1 Unified Production Methods ....................................................................................................................... 35 8.2 TRADEMARKS ........................................................................................................................................................... 36 8.3 PATENTS ................................................................................................................................................................... 36 8.4 COPYRIGHT ............................................................................................................................................................... 36 8.5 DESIGN PATENTS ..................................................................................................................................................... 37 8.6 FURTHER ANALYSIS ................................................................................................................................................ 38 9. COPYRIGHT AND 3D PRINTING ......................................................................................................... 39 9.1 TECHNOLOGY PROTECTION ................................................................................................................................... 39 9.1.1 Digital Rights Management ........................................................................................................................ 39 9.1.2 Infringement checking embedded in the printer ............................................................................... 40 9.1.3 Anti-­‐piracy Services ........................................................................................................................................ 41 9.2 LAW PROTECTION ................................................................................................................................................... 41 ii 9.2.1 RIAA v. Verizon ................................................................................................................................................. 42 9.2.2 Effects of Litigation ........................................................................................................................................ 43 9.3 CHANGE THE LAW ................................................................................................................................................... 44 9.3.1 Graduated Response ....................................................................................................................................... 44 9.3.2 Effects of HADOPI ............................................................................................................................................ 46 9.3.3 Graduated response as a solution ............................................................................................................ 47 9.3.4 Graduated Response and 3D Printing .................................................................................................... 48 9.4 STRENGTHENING THE LAW ................................................................................................................................... 48 9.5 BUSINESS MODELS .................................................................................................................................................. 50 9.5.5 General drawbacks ......................................................................................................................................... 53 9.6 LIMITING CONSUMER 3D PRINTING RELATED COPYRIGHT INFRINGEMENT .............................................. 54 10. DESIGN PATENTS ON 3D PRINTED OBJECTS .............................................................................. 55 10.1 CONSUMER INFRINGEMENT ON DESIGN PATENTS ......................................................................................... 55 10.1.1 Apple v. Samsung .......................................................................................................................................... 55 10.1.2 Generalisation of Apple’s Design Patent Strategy .......................................................................... 59 10.2 HOW WILL DESIGN PATENTS BECOMING STRONGER AFFECT 3D PRINTING? ............................................ 60 10.2.1 Design Patents and Consumer Infringement .................................................................................... 60 10.2.2 Digital Forming ............................................................................................................................................. 61 10.3 LIMITING CONSUMER 3D PRINTING RELATED DESIGN PATENT INFRINGEMENT ................................... 63 11. FURTHER RESEARCH ......................................................................................................................... 64 11.1 LIABILITY ............................................................................................................................................................... 64 11.2 WARRANTY ............................................................................................................................................................ 64 12. CONCLUSION ......................................................................................................................................... 66 13. LITERATURE ......................................................................................................................................... 68 iii 1. Introduction “Tea, Earl Grey, Hot” – Captain Picard This quote from Captain Picard in Star Trek telling a machine he wants tea and getting a steaming cup of Earl Grey tea conjured from thin air seconds later may be science fiction, but according to one Harvard professor may be no more than 25-­‐35 years away(Anderson, 2012). Today, the closest we get to having such a machine is the 3D printer. Objects designed on a computer materialise into physical objects by the click of a button. It may still take several hours to print relatively simple objects, but the technology is rapidly improving and experts expect the speed and quality to improve exponentially. The technology itself has been around for more than 20 years, but recent patent expirations have led to cost-­‐reductions and technology advancements, making it available to consumers. Anyone can buy a 3D-­‐printer, go on the Internet, choose between thousands of different designs and print them at home. It may currently be mostly iPhone cases and toy figurines, but experts agree on the huge potential of 3D printing technology. President Obama even mentioned the potential of bringing manufacturing jobs back to the US with the help of 3D printing in a State of the Union Speech(Obama 2013). Some experts believe that 3D printing could spark a third industrial revolution making everyone manufacturers(Economist, 2013, Anderson, 2012), while others are less optimistic about the promises of user manufacturing. Nonetheless no one seems to question the potential of the technology and like the invention of the printing press led to censorship and attempts to limit access to information, 3D printing technology will most likely spark resistance from manufacturers using current manufacturing technologies. Their main concern being the ease of which consumers will be able to copy products and potentially infringe on intellectual property rights. How will 3D printing technology in the hands of consumers affect intellectual property rights? 1 2. Methodology and Research Question The search for a research question was inspired by a good friend acquiring an Ultimaker1 3D printer. His initial prints were rather unimpressive, but as he gained experience his prints became more functional and impressive. For my birthday he gave me a lemon press and showed me a 50:1 scale LEGO-­‐man he had printed for his girlfriend. As a student of innovation and intellectual property rights I became interested in the legality of my friend’s prints and what implications the technology could have for companies manufacturing the products he was copying. The initial research into the intellectual property rights on 3D printing proved that many had wondered about the legality of 3D printing technology and prints, but little research had been conducted beyond the potential infringing uses of 3D printing technology. It was quite clear that 3D printers could be used to infringe on all types of intellectual property rights and that people around the world were aware of the infringing potential of the technology. Several people suggested that the technology could spark a third technological revolution(Economist 2013), but no one seemed to wonder what implication these developments could have on intellectual property rights. What will happen when everyone is able to print everything? It was evident that companies were apprehensive about the technology and were unsure how to address the potential intellectual property issues. A range of websites surrounding the 3D printing industry had been created due to the pending legal issues that still need to be addressed; companies developing DRM2-­‐protection for CAD3-­‐files, blogs on the legal developments4 and websites trying to keep the technology free of restrictive legislation5 were all trying to cash in on the apparent legal issues. A review of the literature on the subject of user-­‐community developed innovations revealed the potential of 3D printing becoming available to consumers. It seemed that consumers could potentially scan, design, print and distribute just about 1 3D printer for consumers -­‐ www.ultimaker.com 2 Digital Rights Management 3 Computer Aided Design 4 Law in the Making – www.lawitm.com 5 Electronic Frontier Foundation – www.eff.org
2 everything. The rise of the user-­‐manufacturer seemed likely to become reality in the not too distant future, and it seemed obvious to explore the implications of the technological developments of 3D printing on intellectual property rights. It seemed likely that the copyright war the distributors of digital music and movie files had been fighting for years would potentially enter the market for physical objects. In the beginning of November 2013, I attended a business conference regarding 3D printing, 3D Print Show, in London. The conference confirmed my thoughts concerning the interest of companies in the legal perspective of 3D printing. Out of the eight sessions at the conference, four, either directly or indirectly, discussed the potential intellectual property right issues related to 3D printing technology. Underlining the fact was a session presented by Sarah Byrt from the law firm Mayer Brown. In my opinion she only seemed to have researched the issue the night before and did not provide any information beyond the basics of Weinberg (2013), whom she referred to repeatedly. Furthermore she was very reluctant to answer my follow-­‐up questions regarding her presentation and the concerns I had encountered during my initial research on the subject. This made me conclude that Mayer Brown acknowledges a future business opportunity in 3D printing related litigation and is therefore positioning themselves in the market. The speakers confirmed that legal cases involving 3D printing were yet to reach the courts meaning that I would answer my research question without concrete legal proceedings to refer to, therefore much of my discussion would be derived from my own analysis. I also found that the session for the most part confirmed what I already knew, and did not provide me with significant new knowledge; rather it gave me a different perspective on certain parts of the subject. 3 All of the above-­‐mentioned considerations led me to the following research and subsidiary questions: Will consumer 3D printing technology undermine intellectual property rights? -­‐
What are the implications for companies selling products protected by intellectual property rights? -­‐
What is likely to happen to manufacturers of mass-­‐produced products when consumers get access to manufacturing technology? -­‐
What implications will 3D printing related user manufacturing have on intellectual property rights? -­‐
What types of intellectual property rights are likely to have interesting changing relationship with the development of consumer 3D printing technology? -­‐
What can be done to limit infringement on the intellectual property rights on physical objects? -­‐
What are the intellectual property right implications of mass-­‐customisation? The research and subsidiary questions of this thesis will be answered using exploratory research, as very limited information about the subject is available(Blumberg, Cooper & Schindler 2008). The research is conducted in order to provide additional insights into the questions stated above. Exploratory research usually overcome the issue of limited available information by conducting interviews, empirical studies etc. However, this thesis will refrain from this as the subject is forecasting the future and builds on several specific assumptions only described in this thesis, which would make interviews with experts with different assumptions about the future inadequate. Instead accumulated knowledge, new facts, data and trends, probable and possible developments are systematised according to precisely determined assumptions and conditions, are analysed according to the classification of technology foresight methods described by Magruk (2011). All of the above mentioned assumptions will be described in the delimitations and will be analysed according to the current intellectual property rights and infringement enabling technologies. Furthermore, Magruk (2011) suggests that a perfect research method of technology foresight is a mix of different methods according to the specific technology and available information, because in the future of complex issues a single scientific method will 4 never be sufficient to achieve the aim of the research. Thus, this thesis will utilise analytical deduction of relevant information and law in order to propose predictions on how 3D printing will affect intellectual property rights, when the technology has matured and penetrated into the mainstream consumer market. 2.1 Literature Review The subject of this thesis concerns a developing technology. This means that very little academic literature on the subject has been published. Therefore, the thesis will for the most part rely on Internet sources for information on the technology and various other subjects. I have sought to use the most reliable Internet sources available, and I have not used Internet information on subjects crucial to the understanding of the thesis. Furthermore consumer 3D printing technology is being developed partly by users and there is no academic literature available regarding those developments. Therefore I believe that the Internet sources used are the best possible alternative and regard them as legitimate sources of information. The quotes and information used from the sessions at the 3D Printshow in London are delivered by stakeholders standing to gain from the continued hype and development of the technology, and therefore need to be used with caution. However, the information was as described earlier, for the most part not novel to me, and the sessions are mainly referred to for the purpose of backing my own argument. Giblin (2013) is heavily referenced in the section analysing the effects graduated response in France. Giblin (2013) is very critical of graduated response in general and the French reports praising the results of the programme are discredited. I have read the only French report referenced that is publicly available(Danaher et al. 2012) and I agree with Giblin’s (2013) conclusions and therefore believe that her criticism is justified. Furthermore, the discontinuation of the programme supports the arguments of a flawed system. Von Hippel et al. (2011) are used to analyse the potential implications of 3D technology on single-­‐user and open collaborative innovation. It must be understood that 5 Von Hippel et al. (2011) are not focusing on innovation from a judicial point of view. Most user-­‐innovations described by Von Hippel et al. (2011) are mere adaptations of existing products and are therefore not liable for intellectual property right protection. Also they simplify a very complex situation in a simple model resulting in certain factors being left out. Furthermore, universities are left out of the model even though they invent, own and license many patents. However, the model is the best alternative for showing the effects of 3D printing technology on user manufacturing. 6 3. Delimitations 3D printing technology is rapidly evolving and has found uses in almost all branches of product development. However, this thesis will focus on the technological developments occurring in consumer 3D printing i.e. printers costing below $5000. This is, in my opinion, the area of 3D printing capable of having the biggest impact on the intellectual property rights of the manufacturing industry as we know them today and is therefore an extremely interesting area of research. The London conference sessions and, to a certain degree, my observations from walking around the show floor refuted my initial assumption that 3D printers able to print just about everything would be found in every household in the future. Dr. Phil Reeves (2013) has more than 10 years experience as CEO of the company Econolyst6 that specialises in consulting companies about the possibilities of using 3D printing. He sees another 3D printer getting funded through Kickstarter7 every month, but all they bring to the table is a slight variation of the existing technology perhaps done cheaper or engineered better. He believes the developments will happen, but not until the big electronic companies start to develop a reliable and cost-­‐efficient personal printer. I tend to agree with Dr. Reeves. However, I do still believe that 3D printers will be found in most households, but they will be used for printing relatively simple items consisting of few materials and involving little to no assembly. The amount of materials one household would have to store makes it impractical. Instead I believe more complicated multi-­‐material prints will be printed in local print shops most likely in local supermarkets or as online services shipping the printed objects to your house. Several issues need to be resolved before 3D printing can develop into a mature technology and experience widespread market diffusion. Currently the main issues are that the speed of the prints is measured in hours, even for rather simple prints. Thus, not providing a significant advantage to going to a physical shop to purchase the item. Also the number of different materials/colours needed to print sophisticated objects is a problem; it would be as if you needed a different cartridge for every colour in your 6 www.econolyst.co.uk 7 Crowd funding website for new product development. www.kickstarter.com
7 inkjet printer, except that that cartridge is considerably larger for 3D printers. Furthermore, the cost of the prints is still too high to make it cost-­‐efficient, a kilo of plastic costs around $50, which will buy the normal consumer large amounts of injection-­‐molded plastic items(Mattr 2014). Also the technological know-­‐how needed to operate and maintain the printer and for designing objects in CAD-­‐software is relatively high and the average consumer is likely to find the learning curve too steep. Most printers today come as unassembled kits and therefore require a lot of tinkering and small modifications to function. Though fully assembled alternatives are beginning to come to market these are relatively basic printers with no advanced features. Lastly, the reliability and user friendliness of the current 3D printers leave a lot to be desired(Søndergaard 2013). It seems unlikely that all these issues will be solved before a large-­‐scale manufacturer enters the market. According to Thierry Rayna (2013), this will not happen before they see the possibility of a billion dollars in revenue. Otherwise their business model will simply not comply. Though there has been rumours about most of the big electronics manufacturers are developing 3D printers, an actual product is yet to be released. However, a key patents are set to expire in 2014 and experts therefore believe product launches from some of the big electronics companies are eminent(Hornick, Roland 2013). The terms user and consumer will be used throughout this thesis for describing the same thing. A user or a consumer is considered to be consumer who purchased a 3D printer and is therefore a user of the technology. However Von Hippel et al. (2011) use the term user for both single-­‐users and single-­‐user firms, meaning firms developing products specific to their own needs with little or no intention of selling or distributing the innovation. Innovation in this thesis covers inventions or technological developments that are eligible for intellectual property right protection. Von Hippel et al. (2011) use the term for mere adaptions whose probability of intellectual property right protection are questionable. Proposed laws for extending intellectual property right protection and thereby attempting to minimise infringement will be mentioned. However, the laws are too 8 comprehensive to be discussed in detail within the scope of this thesis and will therefore only be mentioned briefly. In this thesis 3D printing will be compared to the music and movie industry. This comparison between physical objects and digital media may not seem obvious. However, the distribution of digital 3D files is likely to resemble digital music files. Thus, 3D printing is likely to experience the same issues regarding copyright infringement as the music and movie industry has been battling over a decade. All industries that have turned digital have experienced consumer piracy. We are yet to see large-­‐scale infringement on 3D digital files, but market adoption is still low and the early days of mp3s were similar(Rayna 2013a). Therefore the assumption to compare 3D digital files to digital music files seem sound and the best method of analysis when actual data concerning 3D printing are not available. The thesis will analyse the effects of 3D printing technology on consumer infringement on design patent. Since consumer infringement on design patents have not been widely possible until the development of 3D printing technology commercial infringement will be analysed in order to understand the possible implications of the technology. 9 4. Technology This section will describe the technology of 3D printing and 3D scanning in order to provide an understanding of how the technology can affect intellectual property rights. 4.1 3D Printing The technology of 3D printing can be difficult to comprehend until it has been seen in action. This section will explain how the technology works and what the scopes are for future developments. There are several 3D printing technologies available, but this thesis will focus on the low-­‐cost technology available to consumers called fused deposit modelling (FDM)(see figure 1). Figure 1 -­‐ Fused Deposit Modelling(Søndergaard 2013) 3D printing much resembles the personal inkjet printer found in most households. The inkjet printer prints pixel from the screen onto a piece of paper using ink on a XY-­‐axis. The main difference between the 3D printer and the inkjet printer is that the 3D printer prints on a XYZ-­‐axis and can therefore print in 3D. The 3D printer uses very thin strings of molten plastic going back and forth numerous times in order to 10 create a solid object. Like the inkjet printer, the printer instructions come from a digital file. On the inkjet printer, the digital file might be a document or a photo (i.e. 2D). The 3D printer uses a 3D drawing made in a Computer Aided Design (CAD) program that is then transformed into a string of coordinates. 3D printing may seem like cutting-­‐edge technology. However, it has been used professionally for several years. It is widely used in dental prosthetics(Anderson 2012) and in the aerospace industry; for example Boeing is printing 300 of their custom parts at between 25-­‐50% of the previous cost(Goldman Sachs, 2013). The most common industrial use of 3D printing is rapid-­‐prototyping, which is cheap and low-­‐tech mock-­‐
ups of products made to ensure the product functionality and design before a full-­‐scale prototype is manufactured. The common denominator is that 3D printing is being used in industries with a need for customisation. The technology is not advanced and cost-­‐
efficient enough to manufacture products in bulk compared to traditional methods such as injection molding. It is unlikely that the technology will ever outperform the traditional production methods for mass production(Anderson 2012). Supporters of 3D printing believe the scope of the technology to be infinite, others seem to think that it is just the latest technology fad hyped by the media (Anderson 2012, Rotman 2013). The Gartner Hype Cycle for technologies supports this claim. The hype cycle is measured by calculating the amount of media attention the technology is receiving, as well as distinguishing between positive and negative attention. 11 Figure 2 – Gartner Hype Cycle – 07/2013(Gartner 2013) From figure 2 it can be seen that 3D printing is believed to be at the peak of inflated expectations. At the moment there are huge amounts of positive attention in the media regarding the possibilities 3D printing technology. However, negative attention has started to develop, mainly evolving around the 3D printed gun, but also concerning the intellectual property right issue that this thesis is analysing. The idea behind the Trough of Disillusionment is that people will realise a technology’s lack of maturity and lower their expectations. The technology will then slowly evolve on the Slope of Enlightenment and finally reach the Plateau of Productivity where mainstream adoption starts to take off. 3D printing is expected to reach the Plateau of Productivity in 5-­‐10 years(Gartner 2014). Nevertheless, fact remains that scientists all over the world are experimenting with the technology and printers are able to print in more and more diverse materials from traditional materials like steel and glass to stem cells capable of growing organs(Anderson 2012). In recent years the technology have become available to consumers with companies such as Makerbot8 and Ultimaker being at the cutting edge of development for making 3D printing affordable. Printers that cost $30.000 dollars a few years ago can 8 www.makerbot.com 12 now be purchased for around $1.000(Anderson 2012). This led to an explosive growth of between 200-­‐400% a year in 2007-­‐2011. The number of units sold still remains rather low at approx. 23.000 in 2011. It is estimated that the direct economic impact of consumer 3D printing in 2025 will be between $100 billion and $300 billion (Manyika et al. 2013). At the same time companies like Shapeways9 have made it affordable for consumers to access the use of industrial grade 3D printers. Consumers upload a CAD-­‐
file on the website, pay a fee depending on size, quality and material of the print and the 3D printed object will arrive at your doorstep after a couple of weeks. 3D printers used for industrial purposes cost on average $75.000, though some machines will be upwards $1.000.000. However, these costs are also expected to decline rapidly, while the performance and speed will continue improve, not dissimilar to the developments seen in semiconductors (Moore’s law10) (Anderson 2012, Manyika et al. 2013, Fabbaloo 2011). The developments are expected to increase customisation and improve quality of certain products. Furthermore, 3D printing is expected to have an environmental impact, as the additive technology should minimise the amount of waste material accumulated in traditional subtractive production methods. 4.2 3D scanning Although the scan of a physical object is not infringement, it can be a technology contributing to intellectual property rights infringement(Weinberg 2013). This section will therefore briefly describe the technology. As is the case in 3D printing, there are several technologies for scanning 3D objects ranging from lasers to taking photos with a smartphone11. Laser scanning is by far the most advanced and precise technology and this section will therefore focus on this. Like 3D printing 3D scanning has been around for commercial use for several years, but scanners available to the public have only been commercialised recently. 3D scanners like the MakerBot Digitizer12 can be purchased for around $1.400 making it 9 www.shapeways.com 10 The number of transistors in semiconductors double every two years. 11 123D Catch -­‐ http://www.123dapp.com/catch
12 http://store.makerbot.com/digitizer 13 available to most enthusiasts(MakerBot 2014). The Digitizer consists of a turntable platform, a camera and two lasers. The way it works is by using a triangulation algorithm by knowing where the camera is and where the lasers are, it is possible to find a point in space. Putting all the points together in a software program will in theory make an exact digital copy of a physical object. Just like with 3D printing there are technical issues regarding 3D scanning making it 5-­‐10 years from becoming a mainstream technology (figure 2). These issues include slow scanning, only possible to scan smaller objects and the general quality of scans. At the moment, the time-­‐consuming and tedious task of scanning the same area multiple times to get a digital model that still need some work requiring CAD-­‐skills means that the market penetration of consumer 3D scanners is very limited. 4.3 Reality or Science Fiction The idea that everyone will have a 3D printer in their home and print out whatever household object needed seem to be an utopian thought that will not be possible in the near future. However, making predictions about the future of a technology is difficult. The brightest minds were assembled in 1993 to discuss the best application of the newly invented technology of the Internet; one of the best applications they came up with was implementing an online cookbook into a cutting board(Anderson 2012). From figure 2 it can be seen that consumer 3D printing is expected to hit the plateau of productivity in 5-­‐10 years, but that merely means that mainstream adoption will start to take off, but it could be quite a few more years before the mainstream adoption is complete. Initially, I believe that consumers will adopt 3D printing through service providers such as iMaterialise13, Shapeways and Kraftwurx14. These service providers will print your prints for you and already enable users to print in a wide range of materials(Kraftwurx 2014). 13 http://i.materialise.com/ 14 www.kraftwurx.com
14 To understand the consumer applications of the technology, industrial use of 3D printing will be analysed, as some of these applications are likely to penetrate the consumer market as well. According to Dr. Phil Reeves (2013), 80% of the products that could benefit from 3D printing technology still have not adopted the technology. Therefore, there is a big market potential and reason for further technology development. To illustrate the potential of 3D printing technology some examples of the cutting-­‐edge and rather mind-­‐blowing uses of the technology will be described. One of the industries where adoption of 3D printing is farthest along is the medical industry, which has already found several ground-­‐breaking applications for the technology. For example, a man in Great Britain had 75% of his skull replaced by one printed by a 3D printer. The special material encourages cell and bone growth around the patches. It is believed that 500 people a month in the US alone can benefit from this treatment(Ehrenberg 2013). While 3D printed skin has been around for some time researchers at the University of Liverpool are developing skin tones that will match the patient’s ethnicity, age and gender. 3D scans of the wound or burn will be made and the artificial skin can be printed directly on the patient, ensuring a healing process that is far more aesthetically pleasing than current methods(Maxey 2013). Furthermore 3D printing has revolutionised prosthetics, the often painstaking and time-­‐consuming process of casting noses, ears and even eyeballs has been simplified by 3D scanning and printing. It is now possible to make exact copies of eyeballs, a process that previously required hand painting and took months to process(Owano 2013). These are only some of the applications of 3D printing being the developed. Scientists around the world are continuously expanding the boundaries of what is possible with 3D printing technology. Thus, these developments must naturally benefit the technology of consumer 3D printing. As mentioned earlier, the technology is far from mature, but when analysing the developments in 3D printing and especially commercial 3D printing, it is difficult not to be enthusiastic about the prospects of consumer 3D printing technology. 15 5. Intellectual Property Rights on 3D Prints The potential of 3D printing was described earlier, however it is unlikely that all prints made in the homes of users will be made from their own ingenious and creative designs. There are two ways of acquiring designs of 3D objects, one is to download it of the Internet from one of the before-­‐mentioned online user communities, and another is to use a 3D scanner to make a perfect virtual copy of physical objects. This section will explain in brief the different types of intellectual property rights on physical objects. 5.1 Copyright Copyright covers an original creative or artistic expression to a tangible medium, and is in effect upon creation. Copyright provides the owner the exclusive right to: reproduce the copyrighted work, prepare derivative works based upon the copyrighted work, and distribute copies of the copyrighted work to the public(Title 17 §102 1976). Reproduction of copyrighted work covers both physical and digital copies. Derivative works covers recasting, transforming or adapting a copyrighted work, so that the modifications represent an original expression(Title 17 §103 1976). Copyright protection covers only the expression of an idea in a tangible medium i.e. not the idea itself. The Title 17 §102(b) (1976) states “In no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work.” Copyright protection does not cover functional objects. These should be covered by design patents, which will be described in section 5.4. However, there is an exception to this rule as an artistic expression can be part of a functional object. On such an objects copyright law will refer to the principle of “severability”. For example, if there is an artistic expression on a chair that artistic expression is protected by copyright. Nevertheless, if the artistic expression is the shape of the chair, this is not “severable” from the functional object, and is therefore not protected by copyright(Weinberg 2010). 16 5.2 Patent The idea of patents is to encourage innovation and ingenuity by granting a exclusive right on an invention for a limited amount of time. Patents are different to copyright in a number of ways. Mainly being that patent protection is not granted automatically and must be applied for. Furthermore, the invention must be novel, useful and non-­‐obvious(Title 35 §103 ). In order to get a patent, the inventor must disclose enough information that a man skilled in the art will be able to reproduce it(Title 35 §112 ). This is thought to inspire further development in the field for both the owner of the patent and other parties. The relatively strict criteria for patent protection, short protection period along with the cost and administrative work of applying mean that the number of copyrighted items far exceeds patents. Many functional objects are not protected because the patents have expired and can therefore be copied without the risk of infringement(Title 35 §154 ). Patent protection is in many ways stronger than copyright. Copying a patented item is always infringing, even if you were unaware you were infringing. Furthermore, there is no fair use doctrine in patent protection(Title 17 §107 1976). 5.3 Trademark Trademarks are used to protect the consumer in the market place giving them confidence in what they are buying is in fact made and backed by the manufacturer. Trademarks are used to protect brand names, logos, symbols and designs. Certain criteria of protection must be fulfilled in order for a trademark to qualify for protection, mainly “distinctiveness” i.e. the product must have a distinctive character(Trademark Act of 1946 2013). One example is “Apple”: “Apple” written on a box of apples would be “descriptive”, but “apple” written on a computer or a phone has acquired distinctive meaning, and denotes the source of the computer or phone. Unlike patent and copyright copying is not in violation with trademarks. It is the use of a trademark in commerce, thus thereby potentially confusing the consumer that is infringement. Use in commerce has a very broad definition and include “dilution” of famous marks meaning that public use, commerce or not, could be a violation of 17 trademarks. A trademarked product without any other intellectual property rights can be copied as long as the identifying marks of the manufacturer are left out(Trademark Act of 1946 2013). 5.4 Design Patent Alongside the traditional functional patents, the law provides protection for “any new, original and ornamental design for an article of manufacture” (Title 35 §171 ). This allows protection of design of functional objects. However, the design must fulfil the patent criteria of novelty and non-­‐obviousness, as well as present an aesthetically pleasing appearance that is not dictated by function. Meaning that protection is not given to “new designs” or “original designs” only design fulfilling both criteria will be liable for protection(Title 35 §171). According to Quinn (2011), the strength of design patents have increased significantly since the decision by the United States Court of Appeals for the Federal circuit in Egyptian Goddess vs. Swisa. The court chose to adopt an ordinary observer test. The test asks the jury to look at the allegedly infringing product and then look at the drawings in the patent application and determine if the product is infringing or not. This new test is widely agreed to have strengthened design patent protection, as it is now easier to prove infringement. Previously the jury had to focus only on novelty, not the totality of drawings in the patent(Quinn 2011). However, design patents are still considered to be a weak form of protection. According to surveys, 7 out of 10 will not provide the desired protection. Nevertheless, there is strength in numbers and if the owners successfully get several design patents protection will be significantly increased(Quinn 2011). Furthermore, each patent can include several embodiments displaying the product with/without certain design features. This is done by displaying the design features with broken lines if they are to be left out, and with full lines if they are to be included(Carani 2013). This feature broadens the scope of the protection because infringers cannot design around the patent be leaving out or redesigning one feature. However, if one of the embodiments included in the patent application fails the criteria the whole patent fails(Carani 2013). Design patents are used widely because of their relatively short assessment period, usually around 6-­‐8 months, in order to receive some form of protection while the utility patent is pending. 18 Also a design patent allows the use of “patent applied for” and “patent pending”, which in some cases are sufficient to scare off copycats(Quinn 2011). 5.5 Trade Secret A trade secret relates to information that when used in business presents the owner with an advantage over its competitors. The Uniform Trade Secrets Act (UTSA) defines a trade secret as; “Information, including a formula, pattern, compilation, program, device, method, technique, or process, that: derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.” -­‐ (Uniform Trade Secrets Act 1985) Unlike a patent a trade secret does not have to be novel. However, it must have value due to the fact that it is not generally known. In order to get protection reasonable steps must be undertaken to retain it as a secret(Uniform Trade Secrets Act 1985). Such steps can include secrecy agreement, securing and restricting access to trade secret information and areas in which trade secrets are used etc. Also unlike patents, trade secrets are not applied for, when a subject satisfies the definition, it is enforceable by law(Uniform Trade Secrets Act 1985). 19 6. The Implications of 3D Printing on the Future of Manufacturing According to Von Hippel et al. (2011) three main innovation models dominate new product development. The producer model have long been the model producing and selling the most innovations, mainly because they can afford large capital investments. However, recent changes in technology, specifically increased access to digitized and modular design are likely to change this. This section will explain why a shift in innovation model may be happening. The producer model builds on the assumption that a producer serving many customers can afford to invest a lot more in an innovation than a single user. According to Von Hippel et al. (2011) it is therefore assumed that the producer-­‐developed design is superior to the user-­‐developed one. However, research shows that there are two increasingly popular models: single-­‐user and open collaborative innovation. Single-­‐user innovation covers innovations made by a firm or a user specifically for their own needs and benefit. Open collaborative innovation covers Open Source where a number of users collaborate on developing an innovation(Baldwin, von Hippel 2011). According to Von Hippel et al. (2011), four factors determine which of the models are viable for developing a certain innovation, design costs, communication cost, production cost, transaction cost. Design cost is the cost of creating the design for an innovation. Communication costs are the costs of transferring design-­‐related information between different participants during the development process. Production costs are the cost of manufacturing the design (materials, labour etc.). Transaction costs are the costs of establishing intellectual property rights and engaging in compensated exchanges of intellectual property rights. However, transaction cost can be discussed, as it can be argued that these costs are necessary for the manufacturers to profit from the innovation, and therefore cannot be considered a cost. 6.1 Single-­‐User Innovation The main limiting factor for single-­‐user innovation is the design cost because a single user will have limited amounts to invest in the design. Therefore, the benefits of a customised design have to be significant in order to outweigh the cheaper cost of a 20 mass-­‐produced substitute. Communication costs do not affect single-­‐user significantly as there are few communication costs within a single firm and none at all for a single user. Production costs are also an important factor as a single-­‐user is unlikely to have a need for large amounts of an item and will therefore not experience the benefit of economies-­‐
of-­‐scale. Single-­‐user innovation will encounter some transaction costs, but because most single-­‐user innovations are not developed for commercialisation, there is little need for intellectual property rights. At most the single-­‐user firms will have transaction cost setting up trade secrecy requirements, if the innovation provides a competitive advantage(Baldwin, von Hippel 2011). 6.2 Producer Innovation Producers can take on larger design projects than single-­‐users, because they expect to spread their design cost over many consumer purchases. Producers encounter communication cost even though they are a single organisation because the consumer will have to be made aware of the product and its benefits i.e. advertisement. One of the major advantages the producer model has on the other two models is economy of scale with respect to production. Producers have the ability to manufacture a large number of units at a very low price per unit. Thus, the producer model has an advantage in production cost. However, it has a similar disadvantage to the other models with respect to transaction cost, as they are selling their innovations and therefore have a need to secure intellectual property rights and enforce non-­‐compete agreements etc. (Baldwin, von Hippel 2011). As mentioned earlier, this cost described by Von Hippel et al. (2011) can be discussed because it is a requirement for making money, and it is therefore not a cost that can be decreased or increased according to the revenue forecasts like the other costs. 6.3 Open Collaborative Innovation According to Von Hippel et al. (2011), users tend to undertake innovation in widely distributed networks of innovative contributors. In open collaborative innovation the design costs are dispersed between the different contributing actors and are therefore capable of undertaking bigger design projects, provided the project can be divided into modules. Communication costs play a major role in open collaborative 21 innovation, as the contributors need to divide the workload efficiently and piece it back together to complete the design. They must be able to communicate rapidly and repeatedly. Low communication costs are therefore critical for the open collaborative model to function. As with single-­‐user innovation open collaborative innovation will not have the benefit of economy of scale, as contributors will produce their own product from the developed design. Transaction costs do not influence open collaborative innovation as what may have been protectable by intellectual property right has been shared in networks of collaborators. It would also be difficult to determine who invented what, how it should be divided etc. 6.4 Reasons for User Innovation In order to analyse the effects 3D printing technology could have for manufacturers the reasons why user innovate must be explored. According to Von Hippel et al. (2011), the main reason for user innovation is that the existing products available do not sufficiently suit their needs. Producers mass-­‐
produce products that meet the general needs of large market segments in order to maximise profits. If consumer needs are highly heterogeneous in the market place, then the standardised products of producers will leave many consumers dissatisfied. This leaves the user with a choice between making a product that fit his or her individual needs or buying a mass-­‐produced item that only fulfils some of the users’ criteria. Furthermore, users also have the option of hiring a specialist developer, but this option also has factors that can drive users to innovate. Using a specialist company, the users will incur agency costs from monitoring and communicating with the company during product development and risk that the product will not fit the users’ needs perfectly, because the specialist wants to lower development costs and use technologies on hand(Baldwin, von Hippel 2011). In short, Von Hippel et al. (2011) believe that a user will innovate if the cost of doing so are smaller than the agency costs of contracting a specialist and the benefits of innovating is greater than purchasing a mass-­‐produced product. However research has shown that in certain industries users tend to innovate because they find it to be an 22 enjoyable activity to gain social recognition or improve their position in the job market(Baldwin, von Hippel 2011). 6.5 User Innovation and Intellectual Property Rights Research has shown that users often freely reveal their innovations to the world, which has been a big surprise for many innovation researchers. This section will analyse some of the reason behind the reveal of otherwise potentially valuable information. Harhoff et al. (2003) list several reasons why some users freely reveal innovations. Firstly, innovators freely reveal their innovation because they believe it is the best strategy or most convenient option for them. Research has found that many innovators find patents to have limited value and that copyright are only applicable to books, graphic works and software etc. Furthermore, the studies found that users and firms gained little value from licensing patents, one reason behind this was findings suggesting that 10% of patents account for about 90% of the accumulated value of patents(Harhoff, Henkel & Von Hippel 2003). The findings are supported by Anderson (2012), whose grandfather invented the timed garden sprinkler system. He licensed out the patent throughout its lifetime and only received symbolic financial gain even though the market penetration of his invention was substantial. This leaves users with two options either freely reveal to the world or keep it as a trade secret. Trade secrets are in many cases not possible because when products are introduced into the open market the trade secret will be revealed. Even in cases where the innovation is kept in house during the development phase before putting them on the market, research has shown that it will be in the hands of competitors within 12-­‐18 months(Mansfield 1985). Meaning in many cases, the innovator will only have one year before the innovation is revealed either voluntarily or involuntarily(Harhoff, Henkel & Von Hippel 2003). As mentioned before, Harhoff et al. (2003) are not the USPTO and can therefore not say what innovations are patentable and which are not. It is evident that some of the innovations mentioned in their article are mere adaptations and would therefore most likely not be patentable. 23 It could be argued that if there were any real value in the innovations made by users they would be worth protecting by intellectual property rights. However, most user innovators are employed family men with a steady income and giving that up for an uncertain entrepreneurial adventure may seem risky. Furthermore, there are advantages to freely revealing user innovations. First, users may experience by freely revealing their innovations that manufacturers reengineer user-­‐innovations to make them more robust and reliable before introducing them to the consumer market benefiting the users. Furthermore manufacturers offer related services such as maintenance and repair, things users would otherwise have to undertake themselves. These issues are some of the reasons why 3D printing technology is still a developing technology, underlining the fact that 3D printing will not mature until one of the big electronics manufacturers start distributing a 3D printer. Another incentive that researchers have found in Open Source software development, which could also be transferred to 3D printing, is the reputational incentive that can be found in collaborative innovations. The basic assumption is that by revealing a design, the user will increase his or her reputation within the user-­‐
community and thereby his or her value in the job market (Harhoff, Henkel & Von Hippel 2003). The current 3D community much resembles the Open Source community in the way that everyone is collaborating on solving each other’s technical and design related issues. The Danish 3D printing community is gathered in the Facebook group “3D Print(ere) i Danmark”(“3D Print(ers) in Denmark”)15. The discussion on the page is very diversified, from sharing of CAD-­‐files to 3D printing related news. Furthermore some members opened an online filament store16 and do all their market research on the page, first by giving out free samples and then by asking questions regarding favourite colours etc. The 3D printing industry is yet to become mainstream and the job opportunities mentioned in the research on Open Source software is yet to be seen, but being a prominent member of the premier 3D printing group in Denmark is likely to give you a head start if the technology takes of. Also many programmers may reveal their code, because they have used the freely revealed code of others and therefore feel they have a moral obligation to do so as well. Harhoff et al. (2003) believes that freely 15 https://www.facebook.com/groups/3dprinter/?fref=ts 16 www.mattr.dk
24 revealing an innovation is directly linked to increasing the diffusion of an innovation rather than through licensing or keeping it secret. A user may benefit by this diffusion in a number of ways. Among these are network effects reputational gains and other innovations induced among and revealed by users(Baldwin, von Hippel 2011). Furthermore, as it seen in the Open Source community some users are likely to innovate just because they enjoy programming this behaviour likely to be emulated in 3D printing. Research have shown that the hardware manufacturers in the 3D printing industry release and share their innovation under Open Source licenses, but these are unsuited for licensing physical products(Frandsen 2012). In this weak appropriability regime of the 3D printing industry, firms rely on other assets to accrue profits. Frandsen (2012) suggests that 3D printing firms especially have to rely on the community asset meaning they rely on the Open Source community for technological developments. Users allow access to the community assets. If the companies violate the Open Source principles, they will be heavily criticised and denied access to the community resources. Arguably the dominant manufacturer of consumer 3D printers, MakerBot, builds its printers from a foundation of Open Source technology and shared everything with the community until recently(Pettis 2012). The CEO of MakerBot, Bre Pettis, argues that the reasoning behind the company’s change of strategy is that MakerBot has changed from a hackable hobbyist toy to an educational tool for changing the world. MakerBot received a lot of bad press in the community, critics arguing that the change occurred because of greedy investors. Pettis denies this, however, fact remains that less than a year later commercial 3D printer manufacturer Stratasys bought the company. It is unlikely that the company would have been acquired if all their technology were Open Source. Furthermore, Pettis (2012) argues MakerBot’s core users have changed from being nerds demanding a hackable machine to a more mainstream consumer, whom does not have the same demand for hackable hardware and are willing to pay a higher premium for a fully assembled functional machine. This underlines Frandsen’s (2013) findings that the Open Source Protocol does not work for hardware manufacturers and they have to rely on other assets or revoke the Open Source strategy to accrue profits. 25 6.6 Effects of 3D Printing and Internet Technology on Manufacturing and User Innovation This section will analyse how Internet, CAD-­‐software and 3D printing technology may affect the balance in product development. Figure 3 – Areas of Innovation(Baldwin, von Hippel 2011) The introduction of the Internet has lowered communication cost significantly. Open collaborative innovation is not a new phenomenon, but the main reason behind its increased popularity is the ease of communication the Internet has provided. The communication cost of the producer innovator has also been lowered, as the cost of identifying, contacting and localising potential customers has been decreased significantly. 3D printing in synergy with the increased simplicity and lowered cost of CAD-­‐
software has significantly decreased the design cost. The ability to design 3D objects in virtual reality has shortened the time and reduced the amount of labour involved in the design process. Furthermore, the ability to 3D print simple prototypes, also known as rapid-­‐prototyping, has reduced the need for expensive injection molding prototypes and thereby reduced the cost of designing a product significantly. The cost reduction 26 has the biggest impact on single-­‐user and collaborative innovation as a product can now be designed at home without investing thousands of dollars in production equipment. Furthermore, 3D printing has impacted the cost of manufacturing and has the ability to do even more so when the technology matures. However as previously mentioned 3D printing is not viable method for mass-­‐production as there is no economy of scale. This will not affect single-­‐user and open collaborative innovators with a need for a limited number of copies, because they now have a financially viable method of manufacture. Open collaborative innovators especially gain benefits from this because they often are dispersed networks of collaborators located around the world. Instead of one collaborator having to commercialise the product, each individual collaborator can print their personal copy of the design. The synergy between Internet, CAD-­‐software and 3D printing technology has enabled users to have their products printed on professional equipment at the click of a button by companies such as Shapeways. Furthermore, Shapeways provide the users with a distribution channel eliminating the need for a supply chain making single-­‐users producers by the click of a button. Looking at figure 3, the change in technology means that single-­‐users can take on design projects that were previously not financially viable meaning that boundary has moved to the right. Likewise the lower communication cost of open collaborative innovation means that the boundary is moved upwards. Single-­‐user and open collaborative innovations are thus invading on the boundaries of producer innovation making the products only capable of being manufactured by producers smaller. It is likely that users will become more important in technological developments, as the technology will facilitate innovation. Furthermore, the emergence of companies like Shapeways enabling users to sell and distribute their innovations without investing huge sums of money and risk could increase the need of intellectual property rights, as more users will attempt to profit from their innovations and therefore need protection. Nonetheless the implications could also prove to be completely different as described earlier users experience several benefits from freely revealing innovations. Thus, an increase in user innovations could mean a decrease in intellectual property rights if users become a bigger part of the product development process. 27 7. Legal Cases As 3D printing is developing questions about the legality of the technology arise because 3D printers have the potential to copy products protected by intellectual property rights. The issue came to the attention of the public after the notorious digital piracy website The Pirate Bay17 added a 3D printing category in 2012(Quick 2012). This section will analyse whether the technology is legal by comparing 3D printing technology to the Sony Betamax, as this technology was also seen as potential threat to intellectual property rights at the time. Furthermore, 3D scanning will also be discussed as the technology can potentially contribute to the infringement by making exact digital copies of physical objects that are 3D printable. 7.1 Sony v. Universal City Studios The 1984 Supreme Court case between Sony Corp. of America vs. Universal City Studios, Inc. questioned whether manufacturers of home video recording devices could be held responsible for third party copyright infringement i.e. consumers recording and copying copyrighted material on VHS tapes. The main question was whether the VTRs had non-­‐infringing uses. “The Supreme Court, Justice Stevens, held that manufacturers of home videotape recorder demonstrated significant likelihood that substantial numbers of copyright holders who license their works for broadcast on free television would not object to having their broadcast time shifted by private viewers and owners of copyrights on television programs failed to demonstrate that time shifting would cause any likelihood of non-­‐
minimal harm to the potential market for, or the value of, their copyrighted works and therefore home video tape recorder was capable of substantial non-­‐infringing uses..” -­‐ (Sony v. Universal City Studios 1984) This meant that manufacturers of VTRs could not be held responsible for contributory infringement even though the product was mainly used for infringing purposes. The ruling provided a safe harbour for a large number of technologies such as 17 Swedish bit-­‐torrent website notorious for sharing copyrighted material -­‐
www.thepiratebay.org 28 the tape-­‐recorder, photocopiers, CD burners, iPods etc. that may not have become available if not for this ruling. 7.2 MGM v. Grokster Subsequently the 1984 ruling was re-­‐examined in the 2004 Supreme Court case between MGM Studios, Inc. v. Grokster, Ltd. Grokster et al. won in the district court and the court of Appeal, due to the software’s use of a decentralised network where no central server was maintained. Grokster et al. argued that even if they were to turn off all their computers and servers, users would still be able to share infringing material. However, in the Supreme Court Grokster et al. were ruled guilty of three instances of inducement18. Firstly, Grokster et al. aimed to satisfy a known source of copyright infringement by capturing former Napster users. Internal documents constantly referenced Napster and software were initially distributed through a program compatible with Napster. Furthermore, Grokster et al. attempted to divert queries for Napster onto its own website. Grokster et al.’s attempts to capture former Napster users, who were looking for a new mechanism for copying and distributing copyrighted files showed intent to bring about infringement(MGM Studios v. Grokster 2005). Second, Grokster et al. did not attempt to develop filtering tools or other mechanisms to diminish the infringing activity using their software. The court found this to underline the intentional facilitation of their users’ infringement(MGM Studios v. Grokster 2005). Third, Grokster et al. made money by selling advertising space on their software, since the companies’ income were directly influence by the use of the software which was proven to be mainly infringing, the court found it to be evidence of unlawful intent in the context of the entire record(MGM Studios v. Grokster 2005). The two cases are significantly different in the way that Sony dealt solely with distributing a product capable of infringement knowing some users would use it for illegal purposes. The case struck a balance between the interests of protection and innovation by holding that the products capability of non-­‐infringing uses should bar the manufacturers from being liable of secondary infringement. In Grokster there were 18 Advertisement or solicitation that broadcasts a message designed to stimulate others to commit violations. 29 evidence that the distributors actions were causing and profiting from secondary infringement and were therefore guilty of inducement, which was not the case in Sony. 7.3 Legality of 3D Printing and Scanning Technology 3D printing technology has the potential to infringe on all types of intellectual property rights. However, it does have significant non-­‐infringing uses i.e. it can be a manufacturing tool for both consumer and commercial purposes. Thus, following the ruling in Sony Corp. of America vs. Universal City Studios, Inc., manufacturers of 3D printers cannot be held liable for copyright infringement of third parties. Focusing on MGM Studios, Inc. v. Grokster, Ltd., manufacturers of 3D printers cannot be charged by the inducement rule, if they do not promote infringement and is therefore still protected by the Sony Corp. safe harbour. The same conclusion is reached when analysing 3D scanning. The technology can enable intellectual property right infringement, but it has significant non-­‐infringing uses making it possible to make a digital copy of non-­‐
infringing objects. The legality of the two technologies allows for further analysis of the implications on intellectual property rights of companies producing objects that are capable of being 3D printed. First, it will be analysed how 3D digital files will be shared between infringers and what the law states on the subject. 7.4 Online File Sharing 3D printable designs can be shared online, not unlike the videos on YouTube and photos on Flickr1920 meaning that users of 3D printers can post their designs online and share them with the community. However, this also means that potentially infringing designs can be shared with thousands of users. The companies hosting the communities are exempted for liability if they act in accordance with the Digital Millennium Copyright Act (DMCA). 19 Online photo sharing platform – www.flickr.com 20 Most manufacturers of 3D printers host their own online sharing platforms for example Makerbot’s “Thingivers” www.thingivers.com 30 Title II of the DMCA the Online Copyright Infringement Liability Limitation Act (OCILLA) creates a safe harbour for Online Service Providers (OSP) from copyright infringement liability, as well as from the infringing acts of their users, if certain rules stated in the Act are followed. General rules for eligibility of the limitations of liability is that the service provider “has adopted and reasonably implemented” systems that terminates users that are “repeat infringers”. Furthermore, the OSP must “accommodate and not interfere with standard technical measures”, meaning “technical measures that are used by copyright owners to identify or protect copyrighted works” (Title 17 §512 1998). In regards to user communities or “Information Residing on Systems or Networks At Direction of Users” an OSP is not liable for copyright infringement, if it “does not have actual knowledge that the material on the network is infringing or is not aware of facts or circumstances from which infringing activity is apparent or upon obtaining such knowledge or awareness, acts expeditiously to remove, or disable access to, the material”. Furthermore the OSP may “not receive a financial benefit directly attributable to the infringing activity and upon notification of claimed infringement” the OSP must “respond expeditiously to remove, or disable access to, the material that is claimed to be infringing or to be the subject of infringing activity” (Title 17 §512 1998). Online communities hosting user created CAD files are thus not liable for copyright infringement, if they follow the rules stated above. Derived from the court cases and the DMCA owners of copyright cannot sue neither manufacturers of 3D printers or online user communities hosting potentially infringing material. Copyright owners will therefore have to litigate against the individual infringer making inhibiting infringement nearly impossible, as seen in the fight against music and movie piracy. This has made both the music/movie industry, patent lawyers and NGO’s for a more open Internet call for a modernisation of intellectual property rights making them more suitable for dealing with infringement in the digital age(Quinn 2011). 31 7.5 Cease and Desist Legal cases involving 3D printing are yet to reach the courts. However, there have been several DMCA related cease and desist takedowns from online user-­‐
communities sharing CAD-­‐files. This section will analyse the different takedowns and what intellectual property rights the files infringed upon. 7.5.1 Penrose Triangle The first DMCA takedown from the user-­‐community Thingivers was a 3D printed model of an optical illusion called the Penrose Triangle created by Ulrich Schwanitz. He uploaded a video on the Internet challenging others to replicate it. Another maker not only figured out how to design it, but also uploaded the design to Thingivers. Ulrich Schwanitz then threatened Thingivers with legal action under the DMCA. The story gathered a lot of attention, because it was the first takedown involving a 3D printed design, but mainly because Swedish artist Oscar Reutersvärd created the original artwork in 1934(The Economist 2013). Ulrich Schwanitz thus had no intellectual property on the artwork, because copyright does not cover derivative works regardless of the original copyright having expired(Title 17 §102 1976). 7.5.2 Warhammer Figurines A user of Thingiverse and a fan of the game of Warhammer21, Thomas Valenty spent a week designing two Warhammer inspired figurines. He then posted them on Thingiverse for other users to download for free. Within weeks, there were several Warhammer inspired figurines available in the community. The figurines came to the attention of Games Workshop, the firm that makes and distributes Warhammer. They sent Thingiverse a takedown notice citing the DMCA(Thompson 2012). It is uncertain whether Games Workshop actually had rights to take down the design, as they were only inspired by the Space Marine Dreadnought and could therefore be argued to be an original expression and not a derivative work as argued by Games Workshop. The main mistake made by Thomas Valenty was associating his creation with Warhammer. However, that would be trademark infringement and thus not covered by the DMCA. 21 Strategy game where toy figurines are used to battle the opponent.
32 7.5.3 Game of Thrones Fernando Sosa and his company nuPROTO designed a replica of the Iron Throne used in HBO’s hit show Game of Throne as an iPhone charger. Shortly after preordering for the dock began nuPROTO received a cease and desist notification from HBO. The site had a disclaimer expressing that the product was not an officially licensed product and was thus not infringing on the Game of Thrones trademark. The dock is clearly a replica of an item used in the TV show and should therefore be covered by copyright. However, as described earlier functional objects cannot be copyrighted. A chair, throne or an iPhone charger for that matter must be considered a functional object. The question is then if the artwork from the Iron Throne can be severed from the throne. Weinberg (2013) explains that there is no golden rule to this test for severability and should therefore be decided by the court. One could argue that in the show the throne is described as being made from sword, so if you sever the artwork, the swords, there would be no throne i.e. no severability, thus no copyright protection. During her session at the 3D Printshow, Dr. Ludmila Striukova used the Iron Throne as an example of copyright infringement, but when I confronted her with my observations after her presentation, she agreed it was questionable whether the throne was copyrightable. The questionable takedowns propose that there are problems with the DMCA that will be discussed next. 7.6 Problems with the Digital Millennium Copyright Act The three cases illustrate a deficiency in the DMCA when it is applied to physical objects. The DMCA was designed in 1998 with typical copyright infringement in mind. When it is applied to music, movies and books in most cases, there will be little doubt whether it is copyright infringing yet there are numerous examples of Google receiving takedown notices for legitimate and clearly non-­‐infringing websites(Google 2014). If these four examples are a testament to what can be expected in the future, the number of illegitimate 3D printing related takedowns are likely to rise. Google reached its record number of 6.5 million DMCA takedown requests in late September 2013(Google 2014). The amount of takedown notices make it difficult, if not impossible, for Google to scrutinise every single request. 33 One problem is that users generally do not have the required legal knowledge about copyright to know if their creations are infringing. Furthermore, it is unlikely that users will challenge huge corporations behind the cease and desists and face a substantial team of lawyers in a court case that could bankrupt them. It seems that no one will contest the cease and desists before a group of users or an organisation within the field of interest decide to make a statement in a landmark court case. The issue has not gone by unnoticed and has led to a call for the revision of the DMCA, both from the supporters of stronger intellectual property rights and the supporters of a more open Internet(Quinn 2013). The problems with the DMCA are not only user related copyright owners also experience litigation issues. The sheer scale of consumer copyright infringement makes it nearly impossible for copyright owners to issues DMCA take down requests against all infringers. This will be discussed further in section 9 on the possibilities of limiting consumer copyright infringement. 34 8. Potential Infringing Uses of 3D Printing As previously described in section 4, 3D printing is becoming more advanced. With the technological developments follow an increased potential for infringement on intellectual property rights. This section will analyse some of the potential infringing uses of 3D printing technology. 8.1 Trade Secrets 3D printing should not be affecting current trade secrets as they usually cover highly technical solutions, manufacturing processes or recipes. It could be argued that if the trade secrets could be discovered by reverse engineering using 3D printing, competing companies would have discovered them by now. 3D printing becoming available to consumers should not be the source of more trade secrets being unravelled. 8.1.1 Unified Production Methods An issue regarding 3D printing technology that can have an effect on intellectual property rights is the unification of production methods. This section will analyse the potential effects of unified productions methods and discuss in which industries these effects could potentially be problematic. Companies currently have customised machinery for manufacturing their products, but as 3D printing technology develops to incorporate more materials and the speed of printing is increased, it is likely that more companies will adopt 3D printing as production method. As previously mentioned, according the Dr. Phil Reeves only 20% of the items that could benefit from 3D printing production are utilising it, leaving a huge market potential for future growth. When more companies realise the opportunities and start to rely on the same production method, copying of products will become extremely easy, as there will be no need for investing in specialised machinery or technology and the products can be scanned using a 3D scanner. The production methods often is the trade secret and when all companies use the same production method, there will not be any trade secret to be kept. With a natural barrier against 35 trade secrecy infringement broken the importance of other intellectual property protection will be emphasised. Companies in danger of this increased copying are manufacturers of highly customisable or niche products, as previously described 3D printing will never be a feasible production method for mass-­‐produced products, as 3D printing does not allow for economies of scale. 8.2 Trademarks Trademark protection does at the moment not seem to be an issue for 3D printing. The level of customisation available in the different CAD programs mean that identifying marks of companies can easily be removed from the objects. As mentioned earlier a trademarked product without any other form of intellectual property rights can be copied as long as the identifying marks are left out(Weinberg 2010). Furthermore the requirement of dilution is hard to justify if people are printing and using the infringing products in their homes i.e. not in a commercial or public context. 8.3 Patents User infringements on patents could prove difficult, as they often cover very technical solutions requiring an advanced production process that 3D printers are not capable of replicating. Furthermore, patents often cover items in need assembly, which the average user is unlikely to undertake, as it requires a certain amount of technical skill. Due to the relatively short protection period, some of the products we use today can or will relatively soon be able to be printed at home legally. 8.4 Copyright The type of intellectual property rights most likely to be infringed on is copyright. One of the reasons is that it is granted upon creation i.e. does not require any registration at the patent office(Title 17 §302 1976). Furthermore, the protection covers 70 years beyond the creator’s death and is therefore less likely to have expired(Title 17 §302 1976). 36 Copyright infringement on physical objects has largely been restricted to 2D objects such as books, pictures, paintings etc. Part of the reason being the labour intensity associated with copying 3D objects. With the introduction of 3D printing technology this could change. 3D scanners for personal use, like the Makerbot Digitizer, and apps for smartphones make it possible for consumers to create digital copies of 3D objects in a short amount of time using minimal labour. The digital file can then be printed on a 3D printer for an exact copy of the original. The files can be distributed just as easily as any other digital files and copyright infringement is therefore extremely likely to be the norm. This seems likely to be the biggest legal implication of 3D printing becoming available to consumers, as it has previously been the case with other technological developments. Legal issues appear to be inevitable, but have yet to see the light of day, and they are not likely to happen until the infringement becomes commercial(Vogel 2013). However, there has been cases of DMCA cease and desists that were analysed previously. 8.5 Design Patents Consumer infringement on 3D objects is still a relatively new phenomenon and mainstream infringement seen in copyright is yet to happen. However, because design patents are the only design protection alternative for functional objects it is highly likely that it will start to happen. The patent only covers the one shape provided in the application, but the protection covers the shape in any material and even if it is made using another technology. Quinn (2011) argues that design patents are likely to become increasingly important, as they are relatively easy and cheap to acquire. One design patent may be easy to circumvent but if the company has several, it may be harder to design around the patent, especially after the change in judicial process described earlier. However, litigation against the individual consumers may still prove to be difficult. 3D scanners enable making exact digital copies of physical objects. Many physical objects will be covered by copyright, but because functional objects cannot be covered by copyright and may not fulfil the strict patent requirements, design patents may be the only viable form of protection for certain products. Thus, increasing the 37 importance of design patents as predicted by Quinn (2001) but mainly for technological reasons in 3D printing. 8.6 Further Analysis After analysing the infringing uses of 3D printing technology on intellectual property rights, it is clear that copyright and design patents stand out as the most likely to be infringed upon. The patent criteria are too strict to be fulfilled by objects that can be 3D printed, mainly because many of the patented items require many elements and after-­‐production assembly. As previously argued, trademarks does not influence consumer 3D printing as most prints will be used in private and are therefore not infringing on trademarks. Trade secrets can, as previously argued, not be a trade secret if it can be 3D printed. This thesis will therefore focus on copyright and design patents to analyse companies’ options for limiting infringement. 38 9. Copyright and 3D Printing As previously described in section 8, 3D printing technology enables consumer copyright infringement on a wide array of products, this section will analyse the different approaches to minimising infringement. This will be done by analysing the measures that have been implemented in the music industry as the distribution of digital music files and 3D print files are likely to happen in much the same way. 9.1 Technology Protection This section will analyse whether technology can help minimise copyright infringement on physical objects. 9.1.1 Digital Rights Management Digital Rights Management (DRM) is used by companies to control the use of digital content after sale. DRM is a set of access control technologies that restrict copying and distribution of copyrighted digital files. It can be used on different types of media ranging from music and movies to eBooks. What DRM basically does is that the file, in theory, cannot be opened by anyone without authorization. Companies are already looking into developing the DRM-­‐technology to accommodate CAD-­‐files22. This section will analyse if this is a viable solution to the intellectual property right issue regarding 3D printing. This will be done by analysing the effects of DRM technology on digital music. DRM for digital music files has been around since the late 1990’s i.e. before Napster23 made music piracy mainstream. With this in mind it is difficult to prove that DRM has had any effect on minimising copyright infringement on digital music files. There are several reasons for this. Firstly, there were always unprotected files around and these were distributed throughout the file sharing community. Also, there is no such thing as unhackable. This can be seen in all technologies from PlayStations, smartphones to encryption(Johns 2009). In fact, there are a number of easy-­‐to-­‐use software programs that let you remove DRM on digital music files by a click of a 22 www.authentise.com 23 Napster was first peer-­‐to-­‐peer file sharing software to be adopted by the mainstream users.
39 button 24 . Though circumvention of DRM-­‐software is illegal according the DMCA, consumers are already pirating illegal files so the fact that removing DRM is illegal is unlikely to stop users from doing it(Johns 2009). It is difficult to imagine that this will be any different with digital 3D-­‐files. Secondly, DRM is very frustrating for legitimate users because it often requires download of special software, entering of passwords or a limited amount of platforms. These restrictions may actually encourage piracy or slow down adoption. Thirdly, the technology is expensive to develop and manage(Johns 2009). DRM technologies are yet to prove a decrease in copyright infringement in digital music, it is therefore highly unlikely that it will decrease infringement when added to 3D print files. 9.1.2 Infringement checking embedded in the printer A patent was recently granted for a 3D printer with an integrated system enabling the printer to check infringement on intellectual property rights(Regalado 2012). The printer will connect to an online search engine of 3D objects and search for similar objects protected by intellectual property rights. There are several problems related to this technology beyond the ones described in the previous section about DRM. The first being the availability of other technologies without restricting technology, as long as this is the case, consumers will choose the option without restrictions. The technology has to become the industry standard for 3D printing either by agreement within the industry or by government interference. The latter is the most likely as the industry rarely restricts itself. However, governments around the world did not interfere in digital music, so interference in 3D printer would also be unlikely. Secondly, the technology forces users to upload their creations to the Internet even if they are not infringing. Uploads could be an item you would not want to have shared online e.g. a scan of your child’s face. Some users would therefore argue that the implementation of this technology would be an infringement on their privacy. In recent years there has been several attempts to pass laws in the U.S. and Europe 24 www.tunebite.dk 40 limiting the privacy online, but they have been met with widespread opposition. The laws will be analysed in section 9.4. 9.1.3 Anti-­‐piracy Services Brand protection services like MarkMonitor25 provide anti-­‐piracy protection for some of the biggest companies in the world including Google and Facebook. The anti-­‐
piracy protection includes monitoring, detecting and responding to piracy and related promotional activities. According to themselves more than half of the Fortune 100 protect their brand online via MarkMonitor(MarkMonitor, 2013). Anti-­‐piracy services may have an application towards battling digital piracy, but the company’s promise that it will survey millions of peer-­‐to-­‐peer networks for infringement and issue DMCA cease and desist notifications seem overly optimistic. In the company’s own case study on the WWE26 where one of the main concerns of the organisation were peer-­‐to-­‐peer file sharing. Peer-­‐to-­‐peer is only mentioned in the context of analysing how big the problem is and not actually proposing a solution(MarkMonitor 2010). Furthermore, it would be surprising that a private company would experience greater success battling online file sharing than the RIAA27 investing millions of dollars in counter infringement suits or the HADOPI programme run by the French government, which will be discussed later in section 9.3.1. 9.2 Law Protection It was described previously how the law protects 3D printed items. Intellectual property rights were developed in an era where consumer infringement on physical objects was very difficult. As previously described 3D printing technology is potentially changing this and this section will analyse whether the current intellectual property rights can be utilised on consumers by comparing piracy (consumer infringement) with counterfeiting (commercial infringement). 25 www.markmonitor.com 26 World Wrestling Entertainment
27 Recording Industry Association of America 41 The main difference between piracy and counterfeiting is the number of infringers. There are a relatively low number of counterfeiters. Meanwhile the number of consumer infringers could be millions. Furthermore, counterfeiters infringe by producing and/or selling in the public sphere, which mean that identification of infringers is relatively easy. However, consumers use the infringing material primarily in the space of their own home making identification extremely difficult without overstepping the boundaries of the private sphere. The profit gained from infringement by counterfeiters is relatively high and litigating provides the right holders with positive benefits from restoring business turnover. Litigating against consumer infringers is often an expensive and time-­‐consuming process with little benefit both financially and in limiting infringement. Finally, there are possible social benefits of litigating against counterfeiters because the company will be seen as a victim, unlike when companies litigate against individuals where they are perceived as a big corporate machine going after the little man(Rayna 2013b). 9.2.1 RIAA v. Verizon In RIAA v. Verizon (2003) Verizon refused to provide the personal details of account holders who appeared to be trading large numbers of mp3 files on peer-­‐to-­‐peer networks to Copyrights owner under the DMCA. On account of the facts that, “1. §512(h) does not authorize the issuance of a subpoena to an ISP acting solely as a conduit for communications the content of which is determined by other; if the statute does authorize such a subpoena, then the statute is unconstitutional because (2) the district court lacked Article III jurisdiction to issue a subpoena with no underlying “case or controversy” pending before the court; and (3) §512(h) violates the First Amendment because it lacks sufficient safeguards to protect an Internet user’s ability to speak and to associate anonymously.” (RIAA v. Verizon 2003) RIAA v. Verizon held that ISPs could not be subpoenaed to give up to the names of the owners of specific IP addresses under the DMCA, if the infringing file was not stored on the ISPs servers. Consumer infringement on copyright is almost always done in the space of their own home without storing the material on an ISP server. The ruling 42 meant that RIAA and other owners of copyrighted items had to go through the ordinary channels to obtain a subpoena a much more labour-­‐intensive method than issuing it under the rules of the DMCA. 9.2.2 Effects of Litigation As previously described ISPs cannot be held liable for third party infringement as long as they follow the requirements stated in the DMCA. Thus, copyright holders have to litigate against direct infringers. In the case of copyrighted digital music files, this number could be in the millions for popular artists. Popular 3D prints could be shared to the same extent making litigation against direct infringers very time consuming and expensive. The RIAA started litigating individuals heavily in the years 2004-­‐2008 targeting some 18.000 individuals. Most of them settled out of court for a few thousand dollars rather than facing potential Copyright Act fines of up to 150.000$ per download music track. Only two defendants chose to defend themselves and lost massively(Kravets 2010). During the campaign the RIAA spent an enormous amount of resources on the litigation but even though they won all of their suits, they gained little monetary compensation and thus abandoned the strategy. 3D file sharing is likely to experience much the same scenario if the litigation strategy is chosen(Rayna 2013b). When the RIAA started litigating against individual infringers the public opinion was that the big corporate machine was going after the little man and the record labels experienced a lot of bad press for being greedy. The band Metallica experienced the same amount of bad press when they sued file sharing platform Napster resulting in 300.000 people being banned from the network. Metallica was accused of being in bed with the record labels and for being greedy(Blabbermouth 2013). Big manufacturing firms are likely to experience the same amount of bad press and negative social benefit if they choose to litigate against individual infringers. Furthermore, it is likely that many consumers being litigated will resort to the Fair Use limitation to the exclusive right. Unlike digital music files, 3D digital design are likely to be modified in such a manner that “the amount and substantiality of the portion used in relation to the copyrighted 43 work as a whole and the effect of the use upon the potential market for or value of the copyrighted” (Title 17 §107 1976) can be questioned making it harder for companies to prove infringement. 9.3 Change the Law In the previous sections, it was established that neither the current law nor technology has had the ability to seriously impact digital piracy. This has led to a call for revision of the copyright laws making them more suitable for the digital age. This section will analyse the laws implemented in several countries trying to fight digital piracy. 9.3.1 Graduated Response Graduated response has been implemented in several countries around the world including the US. However, the law was not implemented until 25 February 2013 and the organisation administrating the scheme has yet to release substantial information on the number of allegations sent to users. The lack of information released by the organisation could indicate a lack of evidence supporting the efficiency of the US Scheme(Giblin 2013). Due to the lack of concrete evidence and short implementation period of the US law the French implementation will be analysed, as it was in effect from 2010 and it therefore has the longest period of implementation of the available countries(Giblin 2013). The French graduated response scheme is known as HADOPI (“High Authority for the Dissemination of Works and the Protection of Rights on the Internet”). Under HADOPI, copyright owner representatives provide allegations of copyright infringement. Most of the allegations centre on peer-­‐to-­‐peer networks 28 as this technology enables easy detection of an infringer’s IP address29, which is generally not feasible in the case of client-­‐server direct download30 and streaming sites31 (Giblin 2013). 28 File sharing network without a central server 29 Internet Protocol address assigned to any device connect to the Internet
30 The infringing file is stored on a server and is only accessible if you know the direct link 44 After an allegation is reviewed, HADOPI will contact the user via their ISP and issue a warning that their Internet connection should not be used for infringing purposes. The notice is required to inform the user about the consequences of continuing infringement along with information on legitimate ways of acquiring copyrighted material. If another allegation is made within 6 months, HADOPI can send a similar notice along with a registered letter with the same information. If yet another allegation is made within a year of the second notification, HADOPI will investigate the matter and decide whether to request a suspension of the Internet connection or a monetary fine. A judge will then consider the request and determine which sanction, if any, should be imposed. The sanctions ranged from a limited suspension of Internet access to a fine of up to 1200€(Giblin 2013). President Hollande commissioned a report on cultural policy shortly after being elected. The Lescure report was published May 2013 and included an evaluation of the role and future of the HADOPI programme. The report concluded that HADOPI had not reached its goals. Furthermore, it concluded that while it may have reduced peer-­‐to-­‐
peer infringement the traffic had been diverted to other infringing sources harder to detect rather then legitimate ones. The report recommended closing HADOPI and transferring the responsibility elsewhere, lowering the maximum fine to 60€ and abolishing the suspension of Internet as a punishment. On 8 July 2013, it was announced that the agency administrating HADOPI would be abolished and the responsibilities were to be allocated elsewhere. It was also announced that suspension of Internet was no longer an appropriate remedy and that the focus of law enforcement would be on commercial infringers(Giblin 2013). It was reported that HADOPI had received 18,380,844 infringement allegations by July 2011. However, by July 2013 only 2,004,847 first and 201,288 second notices had been sent and only 710 investigations had been initiated. As of September 2013, only four cases had gone to trial of those only two were convicted. The harshest punishment was a 600€ fine and a 15 day suspension of the Internet connection(Giblin 2013). 31 Sites illegally streaming sports events, movies, music etc. 45 9.3.2 Effects of HADOPI The administrative body of HADOPI was quick to claim that the law had a reductive impact on the number of copyright infringements in France. It cited four different studies claiming that the peer-­‐to-­‐peer “audience level” declined 17% according to one study and 29% to another. The other two claimed reductions of 43% and 66% in “illegal data sharing”. However, there are several issues regarding the studies cited by HADOPI. Firstly, the quote of 17% does not exist in the cited report. Secondly, the quote of 29% is from a report not publicly available and HADOPI presented no details on the methodology. Thirdly, the last two figures claiming 43% and 66% reductions in “illegal data sharing” were developed by companies that develops detection systems used in graduated response systems and the other was developed by the French equivalent of the MPAA32. Thus, both authors stood to gain from verifying HADOPI’s effectiveness. Again both studies are not publicly available and no methodology was provided. Furthermore, none of the studies take into consideration the impact of streaming services such as Spotify that gained increasing popularity during the research period(Giblin 2013). The difference between the number of first and second notices has been used by HADOPI to prove that the scheme is working. The first issue regarding using these numbers is time lag. When a user receives a first notice and then does not receive another notice within six months he or she will receive another first notice if an allegation is put forward making the number of first notices naturally higher. Equally if the user does not receive a notice within a year after getting a second notice, he or she will receive a first notice if an allegation is put forward making both the number of first and second notices proportionally higher than investigations. It is very viable that within the 34 months the scheme was in force, users would receive several first and second notices(Giblin 2013). Another issue to consider is the amount users receiving a first or second notice that chose to change their infringement method to a less detectable one. Furthermore it seems that very few of the allegations put forward by the copyright owners lead to actual notices (only 12% using the numbers provided by HADOPI). Even if the user did not change his or her infringing behaviour, there were only a 12% chance of receiving another notice and it would have to occur within six 32 Motion Picture Association of America 46 months. In the cases that went to court, HADOPI received 150 allegations against one user and 100 for another. Thus it seems very hard to receive second notices or undergo investigation under HADOPI making the reasoning behind the conclusion that HADOPI is reducing infringement extremely flawed(Giblin 2013). 9.3.3 Graduated response as a solution Graduated response has been criticised for breaching privacy, freedom of speech and for failing to comply with fundamental legal aspects(Suzor, Fitzgerald 2011). Furthermore there is little evidence supporting the hypothesis that graduated response is reducing copyright infringement in France or any of the other countries that have implemented similar schemes(Giblin 2013). One explanation behind the failure of graduated response is the massive strain put on the administrative body from the enormous scale of copyright infringement. As previously described HADOPI received more than 18 million allegations in the first year of operation. The amount of trained professionals required to individually verify every single allegations is unrealistic, not to mention the cost of the operation. France spent tens of millions of Euros on HADOPI during its lifetime with only two convictions as a result (these being convicted of not securing their Internet connection properly rather than actual copyright infringement). Furthermore, graduated response is skewed in the way that it mainly protects copyright holders with a large portfolio of rights. Smaller independent labels or producers are simply not a part of the scheme and in New Zealand the “3-­‐strikes” has to be against the same rights holder meaning it is harder for independents with fewer rights to get the three strikes(Giblin 2013). The reasoning behind graduated response has often been mentioned to be making infringers change to legitimate options. The recording industry reported to have their best year since 1998(IFPI 2013). The Digital Music Report 2013 does not indicate that the change has occurred due to graduated response as the report is built on a survey conducted in nine countries representing 80% of the global music sales. The change can rather be attributed to the change in business models seen in the music 47 industry in recent year, as the change is also occurring in countries that have not implemented a graduated response scheme(IFPI 2013, Giblin 2013). 9.3.4 Graduated Response and 3D Printing As previously argued the digital piracy of 3D printing is very likely to emulate the way digital music is shared illegally. The platforms used to share music are also capable of sharing 3D files. As shown above graduated response has had a limited effect on digital piracy on music files, and the result is likely to be the same for 3D files. It can be argued that the amount of 3D prints a user will download will be significantly smaller than the amount of digital music files thereby somewhat overcoming the issue with an overburdened administrative body. However, the less likely to infringe the less likely it is to get caught again within a six-­‐month period to get the second and third notice. Furthermore there is still the option of switching to a less detectable method of infringement. Also the issues of impeding on privacy will not be any different in relation to 3D files. 9.4 Strengthening the Law Another option available is to strengthen to the law. This section will discuss some of the different initiatives for strengthening the law. The Stop Online Piracy Act (SOPA) was a law proposing to expand the ability to combat online copyright infringement and online trafficking of counterfeit goods. SOPA was shelved mainly due to massive protests from multinational firms and the general public. The opposition climaxed with “Blackout day” on the 17 January 2012 where some big Internet companies, non-­‐profits, public interests groups and thousands of individuals removed their websites from the Internet. Furthermore, thousands of citizens wrote their representatives expressing their opposition towards the laws. Less than a week later SOPA was tabled by the Senate(Coleman 2013). Though firms and users had completely different motives they joined forces in the opposition against the law. Users were afraid for their online privacy, while firms opposed SOPA because it proposed to weaken the safe harbour protections under the DMCA so that Internet companies could be held responsible for particular forms of user infringement. Meaning 48 that companies like Google, Facebook, YouTube etc. would have a greater responsibility to monitor their sites for infringing material. As discussed earlier the sheer volume of infringing material shared on these sites would according to some experts mean the end of the Internet, as we know it today(Sohn 2011). SOPA’s “sister” act Protect IP Act (PIPA) proposed to enhance the enforcement of websites with infringing content by blocking the access to them. Widespread criticism towards the act emerged, mainly surrounding the fact that the enforcement was too broadly defined and would limit the freedom of speech. Another argument focused on the technical issues the act was built upon. The method for blocking the allegedly infringing website was DNS blocking, which is a simple technology that diverges the Internet traffic from one domain name to another(Public Knowledge 2012). This type of blocking have actually been enforced on ISPs in Denmark resulting in being redirected to a page containing information about why the webpage is blocked and a link to legitimate ways of acquiring copyrighted material, when you try to access www.thepiratebay.org. DNS blocking can, however, easily be circumvented by downloading a simple add-­‐on 33 to your Internet browser. Therefore the whole foundation of the law was cracked(Napolitano Jr. 2011). Anti-­‐Counterfeiting Trade Agreement (ACTA) was proposed in 2011 and initially had support from the US and the EU. The Act was like SOPA/PIPA heavily criticized by experts and public organisations for limiting freedom of speech and infringing on privacy. The EU revoked their backing for the agreement and the other parties followed suit(Rejnholdt 2013). The latest attempt at strengthening the law on digital piracy is Cyber Intelligence Sharing and Protection Act proposed in late 2011. Critics believe it was a second try at passing SOPA. The bill passed the House of Representatives but stalled before it came to a vote in the Senate possibly because President Obama had threatened to veto the bill if it was passed(BBC News 2012). 33 https://hola.org/ 49 All the attempts have one thing in common and that is the criticism of inhibiting freedom of speech and impeding on the privacy of the individual. There is a critical balance between extending intellectual property right protection without overstepping people’s fundamental rights. One explanation for the failures of the proposed laws could be powerful intellectual property rights owners that lobby the politicians into strengthening the law too much so when the general public is informed about the changes, they protest and politicians are forced to listen to the public as they are the ones electing them for the next term(Higgins 2013). Experts agree that an update of the current intellectual property rights is needed. However, the opposition believes the way the previous agreements have been negotiated has lacked openness and have failed to include all stakeholders(Directorate-­‐General For External Policies 2011). Until this is done, it is unlikely that an agreement will be reached. Even after the implementation of new and stronger law protection is implemented only time will tell if it will actually make a difference in the fight against digital piracy. Therefore it seems a better option to learn from the music industry instead of implementing graduated response or strengthening the law by choosing a business model that provide a better legal online alternative to infringement. 9.5 Business Models In the previous section, it was shown that neither the law, technology or changing the law helped fight Internet piracy of digital music files. It was not until the distributors of the music industry changed their traditional business models that they saw a positive change and experienced the best year since illegal downloading became mainstream(IFPI 2013). Experts on the subject agree and believe that the most likely distribution channel for 3D printing files will be online stores like iTunes, a streaming service like Spotify or an online marketplace like eBay(Rayna 2013b, Striukova 2013, Giblin 2013). This section will analyse the different business models in order to establish the best fit for the distribution of 3D print files. 50 9.5.1 Online Streaming Service An online streaming service business model works by letting the customer access unlimited digital content for a monthly fee. The content is never physically stored on the customer’s computer and all content have to be continuously streamed to be printed. This business model has both positive and negative capabilities regarding the distribution of 3D print files. The fact that the 3D print file is never actually stored on the computer means that piracy will become more difficult. Also having a large database of producer-­‐developed 3D print files will ensure the quality of prints. However, the streaming business model suffers from a big drawback. The consumption on a monthly basis, when streaming music can be hundreds of songs a day justifying a 10$/month fee. However, the consumption of 3D prints is likely to be significantly lower. How often would a user go out and buy physical objects? Also the user will on average consume the same amount of music a month every month. When printing 3D prints the consumption will fluctuate significantly depending on the user’s specific needs that month. Furthermore, in the online streaming service business model, it would be very difficult to distribute the earnings to the distributors from the printed prints. There will also be no way of differentiating between big and small object. It would be the same price to print a print that has required a lot of R&D and something simple and relatively obvious. 9.5.2 Platform-­‐based (iTunes Model) The iTunes business model is based on a store dependent on a specific product i.e. the content from the store can only be used on this specific product. The only way to put music on an iPod is through the complimentary software iTunes, which incorporates a music store. The convenience of the store and the necessity of using iTunes for music transfer along with iTunes being one of the first music stores to allow downloads of single tracks at a very low price means that it is one of the top grossing online music stores currently responsible for 63% of digital music sales(Covert 2013). 51 The iTunes model eliminates some of the obstacles in the Spotify model by allowing the customer to purchase one song at a time as well as allowing for differentiated pricing of items. However, Apple’s success with the iTunes music store was built on the overwhelming success of the iPod reaching a market share of up to 75% before the market changed and consumers started using smartphones as music players(Heiskanen 2007). As of September 2012 350 million iPods were sold, all of which required for the user to use iTunes software to transfer files to the device(Costello 2012). The likelihood of a 3D printer gaining the same amount of market share is small and therefore restricting which printer the content can be printed on is likely to limit sales. 9.5.3 Online market place (eBay model) The eBay business model is based on an online market place model. eBay allows users to sell items on the Internet for a small fee. Items can be sold either auction style or at a fixed price. The seller is responsible for storing and sending the item to the buyer. eBay merely provides the platform available. Although the business model will look slightly different this is the most likely distribution model of 3D print files. The auction style selling method will not make sense as the 3D print file is digital and can be copied indefinitely without extra cost. Furthermore, there will be no need to send and store products. It will be uploaded on the website of the distributor. The business model seems viable for distribution of 3D print files and does not have some the drawback described in the earlier models. The current distribution channels of 3D print files look a lot like this although the prints are currently free as they are developed by users and are not advanced enough for people being willing to pay for them. However, it is unlikely that this business model will limit infringement unless the consumer receives an added incentive for choosing the legitimate option. 9.5.4 Mass-­‐customisation Mass-­‐customisation has long been a dream for manufacturers(Economist 2001) and now that dream could become reality. Small degrees of customisation have long 52 been possible when purchasing for example the NIKEiD 34 shoe. However, the customisation is limited to the colour scheme and not to the actual physical properties of the product. The company Digital Forming is trying to change this by allowing companies to upload design that are customisable for customers within set boundaries ensuring that they are buildable, functional and stays within brand aesthetics. The interface uses easy-­‐to-­‐use design software ensuring that even the least computer savvy customers can utilise the tool35. There are obvious copyright issues regarding the customisation of consumer products. The original CAD-­‐file made by the designer will obviously be copyrighted if it fulfils the requirements mentioned earlier. However, when the design start diverging from the original, it will be more questionable if it can be copyrighted as the design will be computer generated i.e. not copyrightable, yet it would still be infringing on the original copyright as long as it is significantly similar(Weinberg 2013). This will force the designer to limit the level of customisation ensuring protection. Whether a product is copyright infringing is decided by the courts and it would be well advised to stay well within the boundaries of protection. It is impossible to copyright functional objects many of the customisable products are likely to be just that, thus, there is a need for further protection -­‐ design patents. Design patents on mass-­‐customised products will be discussed in section 10.2.2. 9.5.5 General drawbacks There are several drawbacks for companies switching to these business models but they will have to ask themselves what the alternative is. Companies are likely to receive a much lower price for a 3D print file, than if they were actually manufacturing, distributing and selling an item but when the alternative is fulfilling the needs of an increasingly small segment without access to a 3D printer, companies are likely to join the business model. On the positive side, the business 34 http://store.nike.com/us/en_us/pw/mens-­‐nikeid/1k9Z7pu 35 See video for further explanation -­‐ http://vimeo.com/64062775 53 model eliminates the need for production facilities, storage, logistics etc. Essentially all a business needs is an R&D and marketing department. Manufacturing companies are facing similar challenges as the music industry has for years, when a music track has been purchased it can be copied and shared with everyone. The added drawback in 3D Printing is that customers only have to purchase e.g. one cup even though there is a need for five because they can be scanned and printed. Thus, the customer is automatically getting an 80% discount. Another issue is that many of the products available will not be protected by copyright due to the fact that they are functional objects. When a customer has purchased a 3D print file nothing legally, unless some other contractual agreement has been signed, is inhibiting the customer from printing multiple copies and selling them on. Only if the manufacturer has additional rights on the product like trademark or design patents, the product can be protected. 9.6 Limiting Consumer 3D Printing Related Copyright Infringement This section analysed the different alternatives for limiting consumer 3D printing related copyright infringement. It was found to be unlikely that any of the alternatives would have a limiting effect on infringement unless it provides the user with an added incentive for choosing the legitimate option. Design patents as mentioned earlier might be the safe harbour that manufacturers of 3D printable products have been looking for. The reasons behind this will be analysed in the following section. 54 10. Design Patents on 3D Printed Objects Design patents have historically been regarded as a weak form of protection, but have been getting increasing amounts of attention after the successful lawsuits of Apple v. Samsung. This section will analyse the effects of consumer digital piracy on design patents. This is partly done by analysing Apple’s design patent strategy that ensured a strong design protection and eventually a win resulting in Samsung having to pay damages of $1,05 billion. Furthermore this section will discuss how Apple’s strategy could be utilised on 3D prints and why design patents on 3D prints could potentially become more important. 10.1 Consumer Infringement on Design Patents The different attempts at limiting copyright infringement were discussed earlier concluding that the fight against digital piracy is a losing battle, and the main reason the recording industry has had it’s most successful year since the beginning of piracy-­‐era is the changing of business models. 3D printing technology enabling consumers to copy functional objects could mean that companies will need extra protection in form of design patents. However, consumer infringement on design patents is yet to happen. Therefore, the most recent landmark case regarding commercial design patent infringement will be analysed. 10.1.1 Apple v. Samsung Apple sued Samsung in April 2011 alleging infringement of several Apple patents. The case was tried on 30 July 2012 and on 24 August the jury returned the verdict largely in favour of Apple(Apple v. Samsung 2013). The jury found that 26 Samsung smartphones and tablets infringed on one or more of six Apple patents(Apple v. Samsung 2013). This analysis will focus on the part concerning the alleged design patent infringement and only use two phones and a tablet as example. As earlier described, a design patent will only cover what is in the patent, however, design patents allow for broken lines in the drawing. These broken lines should not be included in the verdict. This rule means that a design patent application 55 can include several embodiments of the same design. Apple’s D593’087 design patent includes six embodiments of the front face of the iPhone. Figure 4 – Embodiments in Apple’s Design Patent D593’087(Carani 2013) As seen from figure 4, there are three design features defining the front face of the iPhone: The speaker, the screen border and the home button. Apple filed for all possible combinations of these three design features (see figure 5) e.g. embodiment 1 has broken lines around the speaker and screen border but the home button is drawn with a full line. Thus an infringer can change the dimensions of the screen border and the speaker but if the product has a circular home button and a similar shape with a bezeled edge, it will infringe on embodiment 1 in Apple’s design patent. Figure 5 – List of claimed and unclaimed design features in the Apple design patent(Carani 2013) 56 The embodiment that ultimately ensnared Samsung’s Galaxy S 4G was number six that does not include the home button as Samsung does not use circular home buttons (see figure 6) (Carani 2013). Figure 6 – Galaxy S 4G(Left) and Infuse(Right)(Carani 2013) Apple also sued Samsung for infringement on their design patent on the Infuse 4G model (see figure 6) but the jury found that slightly less round edges and the general geometry of the bezel around the screen was significantly different from the iPhone and was not found to infringe on the patent. Underlining the fact that the design patents only cover exactly what is in the drawings. A further example of this is Apple’s suit against Samsung Galaxy 10.1 Tab for infringing on the iPad design patent. Even though the judge called the two devices “virtually indistinguishable”, it was rejected due to fact that the drawings in the iPad design patent made it look like it had a glass back, when it is actually brushed aluminium(Carani 2013). 57 Apple were successful with suits concerning two other patents; one regarding the black glass front of the iPhone and one regarding the Graphic User Interface (GUI) of Apple’s operating system (iOS) (see figure 7). Apple was awarded a total of $1.05 billion for the infringement of the three patents. The reason for this huge amount is found in the patent act: “Whoever during the term of a patent for a design, without license of the owner, (1) applies the patented design, or any colourable imitation thereof, to any article of manufacture for the purpose of sale, or (2) sells or exposes for sale any article of manufacture to which such design or colorable imitation has been applied shall be liable to the owner to the extent of his total profit, but not less than $ 250, recoverable in any United States district court having jurisdiction of the parties.” (Title 35 §289 1952) Thus Samsung had to pay Apple the entire profit made from products infringing on Apple’s design patents. Not only the part attributed to the design features. Design patents can therefore, if infringement can be proven, be very lucrative patents. Apple subsequently moved for a permanent injunction to enjoin Samsung from importing or selling any of the 26 infringing products in the US. The trial is still on-­‐going on the infringed utility patents but have been rejected regarding to design patents and trade dress, due to Apple’s inability to prove the “Irreparable Harm, Inadequacy of Legal Remedies, Balance of Hardship and Public Interests” requirements needed for such an injunction to be granted(Apple v. Samsung 2013). However, this discussion is beyond the scope of this thesis. 58 10.1.2 Generalisation of Apple’s Design Patent Strategy 1. Design must fulfil the patent criteria The criteria of design patents of non-­‐obviousness and novelty do not seem to be as strict as for patents. Apple received a design patent with six embodiments on flat black glass surface with a metal bezel around the edges. Furthermore Apple received a design patent for the GUI of the iOS home screen (see figure 7). Design patents are relatively cheap patents to acquire and there is no need for reissue during the 14-­‐year duration of the patent(USPTO 2013). Figure 7 -­‐ Apple GUI 2. File for a design patent with several depictions of the design The 3D design file should be depicted with all the different possible compositions of design features. This will ensure a broader scope of the claimed design. However, it must be emphasised that design patents can only have one single claim, but it can have multiple embodiments. However, if one embodiment is found to be invalid, all embodiments fail(Carani 2013). Furthermore, the design should be patented on all the different design elements that make up the product e.g. Apple patented the front design, the black glass front and the GUI(Carani 2013). Design patent application on 3D prints should be relatively easy, as a CAD file of the design already exists. 3. Monitor the market/web for infringers Not all design patent infringements are as publicly displayed as the Samsung smartphones that were being distributed throughout the world. Thus, an important part of policing a companies intellectual property rights is monitoring the Internet for infringement. As described earlier companies like 59 MarkMonitor and Degban 36 provide monitoring services, Degban being the organisation sending the most DMCA notifications to Google(Google 2014). Nowotarski (2013) argues that these service providers are useful for identifying commercial infringers. 4. Litigate against infringers The litigation process against infringers can be a time consuming and expensive task because each case has to be conducted in the country of the infringer. Therefore many smaller companies struggle to protect their intellectual property rights in countries outside of the western world, both because of the lack of knowledge of the local laws but also due to the small monetary gains they can expect to receive. Trademarks are good for policing the Internet, while design patents are effective for shutting down importers(Nowotarski 2013). 10.2 How will design patents becoming stronger affect 3D printing? Apple proving the strength of a substantial design patent portfolio may be the answer to the intellectual property problem manufacturers of functional objects that can be 3D printed will be looking for. 10.2.1 Design Patents and Consumer Infringement Due to the lack of consumer infringement on design patents this section was forced to review commercial infringement. This section will discuss whether consumer infringement on design patents will be significantly different from copyright infringement. Reviewing the design patent strategy of Apple generalised in the previous section, it is clear to see that the model suffers several deficiencies when it comes to limiting consumer infringement. It was established in section 9 that MarkMonitor and services like it cannot monitor the peer-­‐to-­‐peer networks and other platforms enabling 36 www.degban.com 60 infringement due to the fact that the amount of consumer copyright infringement is simply too high. There is no reason to believe that this would be any different for design patents meaning that litigation against individual consumer infringers is equally difficult in design patents. Thus, as such design patents becoming stronger will not affect consumer 3D printing significantly but it does mean that companies are likely to have better protection against commercial 3D printing related infringing. The solution for limiting copyright infringement on digital music and movies was a change of business model. The possibility of changing business models in order to limit infringement on functional objects covered by design patents will be analysed in the following section. 10.2.2 Digital Forming In the copyright section, the business model of Digital Forming was discussed and proved that there were intellectual property right problems regarding the customisability of copyrighted objects. This section will analyse whether design patents will experience the same intellectual property problems with customisability. As previously described, design patents only cover the shape depicted in the patent. Thus, design patents will experience the same intellectual property problems as copyrighted objects when it comes to the customisability of the product dimensions and general look of the product. However, Digital Forming proposes a different way of mass-­‐
customisation that could potentially be covered by design patents(Digital Forming 2014). 61 Figure 8 -­‐ Digital Forming Interface(Digital Forming 2014) Using the method in figure 8, rather than the more customisable one seen in the earlier video example, it is easier to protect the company’s design patents. For the example in figure 8, the company could argue that the handles are not part of the patented design and they could be illustrated with broken lines. Thus, the company would only need to file for design patents on the little dish and four legs design. Another option could be to file the two design patents with the three embodiments vertical handle, side handle and no handle. However, it is most likely in this example that the company would have to apply for patents on all four different designs, as the designs significantly differ from each other. However, many products with less significant design features, i.e. the iPhone patent would be able to have all the different design embodiments in one design patent as previously described. Design patents are inexpensive and relatively easy to acquire so the need for four design patents instead of one should not be a significant problem as long as all the designs fulfil the patent criteria. Unless the colour is specifically mentioned in the patent application it is not important. However, the sort of customisation in figure 8 is nothing new and it could potentially be cheaper to manufacture the six different cup designs in the traditional way. 3D printing as manufacturing method will only make sense, when there are a lot more customisation options, this could entail a need for far more design patents and that could be problematic. 62 Although 3D printing allows for true mass-­‐customisation, the current intellectual property rights are not flexible enough to incorporate it. Design patents only cover the shape drawn in the patents meaning that when consumers are given the option to customise products, it has to involve very strict limitations in order to stay protected by the patent. This calls for an update of the intellectual property laws to follow the technological development. However, the update is not straight forward as a design patent on all the shapes that can be created from changing the dimension on a patented product would probably provide too wide a protection from both a competing business and consumer standpoint. Furthermore, the customisable products being sold will have to have a competitive advantage over the ones consumers are able to print at home on their personal 3D printers. Otherwise, the before-­‐mentioned problem with consumers buying one and scanning the product and then printing the remaining number of needed copies themselves. This could for example be the espresso cup in figure 8, which is printed in ceramics a material that is unlikely to be found in the stock household printer and the consumer is forced to buy it online. The business model of Digital Forming can limit consumer infringement on design patents, however, only on products too complex or manufactured in materials not available to the mainstream consumer. Nevertheless, consumers will still be able to copy such products if they are printing in a local print shop with the appropriate equipment and materials for replicating it. This problem is beyond the scope of this thesis but will be briefly discussed in the following section. 10.3 Limiting Consumer 3D Printing Related Design Patent Infringement As in the case of copyright on 3D prints design patents have no obvious method of limiting consumer 3D printing related infringement. The scale of infringement is likely to be too high to litigate against individual infringers. 63 11. Further Research The development 3D printing and the complementary technology leave a lot of questions unanswered. This section will list some of the question that will benefit from further research in order to give an understanding of the potential challenges the development of the technology will bring. 11.1 Liability Many experts believe that the future of 3D printing will mean having local 3D print shops as well as online 3D print service providers. There are already many examples of this available. However, using these print shops, either physical or in the cloud, propose a liability question more or less like ISPs having infringing material on their servers. Who will be liable for litigation when users upload prints to online 3D print service providers? Many of the uploaded prints will be easily distinguishable as infringing others will be far less obvious. In the DMCA, it was solved by making copyright owners responsible for notifying the ISP about infringement. If the ISPs acted accordingly they would not be liable for third party infringement. The content on ISP servers are in most case publicly available and can therefore be accessed by the intellectual property right owners. When users upload designs to an online 3D print service provider the designs will only go from the user to the server making detection of infringement very difficult. Geometric detection systems that in theory should be able to detect infringing designs are being developed but a working system is yet to be displayed. And what will the implications be? 11.2 Warranty When buying a product in a physical shop a consumer will receive a warranty on the purchased product. When a print is purchased online and printed at home, what kind of warranty will there be on the print? Current 3D printers are very susceptible to changes in temperature and other parameters that can affect the print quality. Furthermore, there are huge differences in quality of the different plastics used. If the companies set up requirements for the print conditions, it will be difficult for the companies to prove that the user did not meet the conditions. This could mean that 64 certain print would have to be printed by an approved physical print shop in order to acquire a warranty on a purchased product. It could also mean that consumers will be less likely to print the products one of the main factors will unquestionably the price difference between the two alternatives. 65 12. Conclusion In this thesis the potential implications of consumer 3D printing technology on intellectual property rights have been analysed. The implications for companies selling products protected by intellectual property rights are that a completely new segment of potential infringers have appeared after the introduction of consumer 3D printing technology. Consumer-­‐infringement has changed from mainly being possible in the digital world to being possible in the physical world as well. Therefore the companies have to rethink their intellectual property strategy considerably in order to accommodate this new threat. 3D printing allows for personal customisation of products. Manufacturers of mass-­‐produced item will only experience user manufacturing when the user needs differ significantly from the mass-­‐produced products as 3D printing technology will not be viable production method due to the lack of economy of scale. Manufacturers in markets with very homogenous user needs will most likely not experience user manufacturing. It is unclear what implications 3D printing related user manufacturing will have on intellectual property rights as the technology enables consumers to innovate on a grander scale, which could lead to a surge in intellectual property right applications. The thesis however also found that users experience a range of benefits from freely revealing innovations and it is there unclear if consumer 3D printing will lead to an increase, stagnation or decrease in intellectual property right applications from users. This thesis analysed the types of intellectual property rights most likely to have interesting changing relationships due to the development of consumer 3D printing. It was found that copyright and design patents were most likely to be infringed upon. Furthermore, it argued that design patents would have an increasing importance as 3D printing functional objects and potentially infringing upon them becomes more widely available to consumers. Different methods for limiting copyright infringement using 3D printing were discussed by analysing copyright infringement in the digital music industry. It was 66 found that the change of business model that helped the music industry overcome much of the copyright infringement would not help against 3D printing enabled infringement mainly due to the relatively low consumption of 3D prints compared digital music files anticipated. Thus, no obvious method for limiting 3D related copyright infringement was found. Design patented products are expected to be infringed upon in much the same way as copyrighted products. There is no evidence of consumer infringement on design patents and the consequences were analysed using commercial infringement as an example. As was the case with copyright infringement, this thesis did not identify a conclusive method of limiting 3D printing related design patent infringement. 3D printing technology enables mass-­‐customisation. However, this thesis concludes that current intellectual property rights are not designed to accommodate this kind of product customisation and companies will therefore be hesitant about commercialising true mass-­‐customisation. Consumer 3D printing is not undermining intellectual property rights per se, but as seen in digital music files and the like current tools of intellectual property right protection are inadequate for litigating against individual user-­‐infringers due to the sheer scale of infringement. The introduction of 3D printing merely extends the infringement from digital files into physical objects. Furthermore, the infringement will be limited to relatively simple products without a need for extensive assembly. Therefore the industries affected by the infringement will remain limited. 67 13. Literature Anderson, C. 2012, Makers: The New Industrial Revolution, 1st edn, Crown Business, New York.
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