September 7, 2015
Intellectual Property Watch
By John F. Hornick
Authored by John F. Hornick
Although legal principles apply to 3D printing the same as they apply to any other technology, 3D printing has the unique potential to upset the legal status quo. It is the potential scale of 3D printing that may have profound effects on the law. 3D printing cuts across many areas of law, most types of technology, and almost all types of products. Eventually, anyone may be able to make almost anything. No one else will know they made it or be able to control it, which I call 3D printing away from control.
As industrial and personal 3D printers become capable of making more and more things, 3D printing away from control will proliferate and related laws may become increasingly impotent. For example, the Gartner group predicts that "by 2018, 3D printing will result in the loss of at least $100 billion per year in intellectual property globally."1 Similar predictions, which turned out to be accurate, were made about the music industry in the mid-to-late 1990s. Gartner's prediction seems to be based not only on IP infringement, but also on IP that will never be bought. 3D printing may result in widespread copying, not only of consumer products, but perhaps more importantly, B2B components. Companies that formerly bought replacement parts may start making the parts themselves, or repairing them. To date, little thought has been given to the effects of 3D printing on other areas of the law.
During a lecture at the American University Law School, a student asked "what areas of the law will be relevant to 3D printing." My answer was "all of them." Intellectual property law is mentioned most often, but the legal effects of 3D printing will be much broader. 3D printing will certainly affect IP law, but challenges to product safety and product liability law will probably have more relevance to most people in a 3D printed world. As 3D printing away from control spreads, product safety and liability issues will multiply, as will insurance claims and related legal issues.
Government regulators will also be challenged. Food and Drug Administration regulators will be faced with approving countless 3D printed medical devices, drugs, and human organs. In the U.S., doctors who 3D printed the trachea splints that saved several newborn babies sought and thankfully obtained emergency clearances from the U.S. Food and Drug Administration.2 Usually such approvals happen at a normal pace, such as the FDA's clearance of a Bone Tether Plate 3D printed from a titanium alloy by MedShape, Inc. of Atlanta, Georgia.3
Aircraft regulators will face similar issues with 3D printed aircraft parts. Consumer products regulators will grapple with the safety of products made within control and away from control. 3D printing away from control will also challenge governments' abilities to collect income and sales taxes, and to control the export of technology that may be used for nefarious purposes. Using 3D printing for new kinds of crime will challenge the law enforcement, investigation, intelligence, military, national security, and criminal justice systems, and inter-country relations, and lead to calls for new laws to address the Dark Side of 3D printing.
Law enforcement authorities are starting to think about these issues. I was recently asked to speak about the Dark Side of 3D printing at the annual meeting of the US States Attorneys General. One General asked "how long will it be before the average person can make a counterfeit tennis shoe in his home?"
As powerful personal 3D printers become common, as independent service bureaus open their doors and install better and better printers, and as industrial customers begin to realize they can make replacement parts, and other products, in-house, democratization of manufacturing will increase and migrate away from control. When anyone can 3D print things with virtually any functionality, away from control, many laws will suffer the Five Is (pronounced "five eyes"):
Illegal activity: when anyone can 3D print things with virtually any functionality, illegal activity away from control will proliferate.
Identification: such activity, which is away from control, will be increasingly difficult to identify.
Impractical or Impossible: it will be increasingly impractical or impossible to enforce the law against such activity.
Impotent: such laws will become increasingly impotent; they will exist and be enforceable for 3D printing within control, but will be largely irrelevant for 3D printing away from control.
Thus, as democratization of manufacturing increases away from control, applicable laws are likely to become increasingly irrelevant.
The risks to legal systems posed by 3D printing depend on the degree of democratization of manufacturing. For products that are unlikely to be 3D printed away from control, the law will probably continue to work effectively, much as it does today for traditional manufacturing methods.
However, the democratization of manufacturing may threaten applicable laws in any industry where 3D printing can be used to make parts and products, including consumer products, aerospace, automotive, and health care. In the aerospace industry, customers, especially government customers, may start to 3D print their own parts. In the consumer products and auto industries, consumers, Friends Networks, and independent fabricators will eventually print products and replacement parts.
In health care, domestic and offshore black markets and other types of 3D printing away from control could result from democratized manufacturing, and therefore threaten the potency of laws related to healthcare products. For a scenario involving black market 3D printed human organs "a few decades from now," see Hod Lipson's and Melba Kurman's book Fabricated: The New World of 3D Printing.4
According to Melba Kurman, "3D-printing infringement will impact only a few, specific industries, and even there, 3D-printed manufacturing will have a gradual and localized effect."5 Her reasons are that 3D printing is slow, it is not as easy to make a thing as to copy a music file, consumer 3D printers print in only one material, and 3D printing can't compete with mass production. She may be right, but only for the short term because the reasons she gives are short-term shortcomings of 3D printing.
3D printing away from control will not be limited to garages, basements, and Friends Networks. Although there will be increasingly sophisticated 3D printers in most homes, 3D printing away from control may also become common in industry. Moreover, thousands if not tens of thousands of independent fabricators will spring up all over the world, and they will have 3D printers capable of making almost anything. There will be several near you and they will be as accessible as a convenience store. UPS is putting 3D printers in over 100 of its U.S. stores.6 You will be able to select from products they offer to print, walk in with a digital blueprint on a USB drive, or email them a digital blueprint and they will print it. Companies, governments, and militaries will also buy their own 3D printers.
Widespread 3D printing away from control may change everything and applicable laws may have little effect. However, if anyone who 3D prints a product away from control tries to sell it, rights owners and legal authorities may take action to stop them. But such products will no longer be away from control and will be only a small part of the problem. The immense power of 3D printing away from control is simply consumers, industrial customers, governments, and militaries becoming makers, making the things they need for their own use, rather than buying them.
Legal disruption by 3D printing away from control will probably be mostly unintentional. Consumers who 3D print products may not be aware that legal rights and obligations are involved. But 3D printing away from control may become so widespread—and it may become so common to copy things with 3D scanners, widely available digital blueprints, and 3D printers—that most people and companies will not care whether their 3D printing is legal and stakeholders may throw up their hands in defeat. In other words, 3D printing away from control, and away from the law, may become the new normal and IP protection may go the way of the dinosaur.
Some 3D printing away from control will be intentionally illegal. There will always be bad guys and 3D scanners and printers are great tools for counterfeiting almost anything. Some will scan objects without regard to IP rights, product safety, export control laws, or taxation and either use, sell, or freely share the digital blueprints. Some will use tools that mask design files, such as the Disarming Corruptor,7 so that they can be exchanged without regard to laws they may violate. Others will trade illegal digital blueprints peer-to-peer and on the internet. Others will upload and download them on black market websites, such as Pirate Bay, or on the Dark Web (the World Wide Web is only about 5% of the internet). Some of the intentional activity will not be away from control, so stakeholders may try to stop it, as they try to stop counterfeiting of other products today, but even today this is hard to do because counterfeiters operate in the shadows. Stakeholders will probably be less successful stopping illegal 3D printing away from control.
3D printing away from control may present stakeholders with massive and widespread challenges. As stakeholders are negatively affected by 3D printing, they will complain. Many will sue, especially in the U.S., where lawsuits are a national pastime, second only to baseball. For IP owners, suing customers will not be palatable and suing thousands of fabricators will not be possible, assuming they can even identify infringements away from control. Suing consumers will be even more impractical, as it was when music companies tried to do so. As MIT's Neil Gershenfeld said, "You can't sue the human race."8 IP enforcement didn't work in the music arena and probably will not work for IP infringement away from control.
Other stakeholders will try to convince legislators to enact new laws to protect their interests, for example, to protect digital blueprints and products printed from them. With respect to IP, the laws will probably become narrower, not broader, because existing IP laws are increasingly seen as hindering innovation. Any new laws should protect IP while simultaneously enabling rapid innovation and leaving the markets to operate as freely as possible. As IBM recommended in its 2013 3D printing study:9
Prepare for IP reform . . . by protecting businesses but balance this with enabling innovation by disruptive technologies and open source platforms—start by considering the revision of stifling legacy regulations.
Law professors Desai and Magliocca expressed a similar reluctance to beef up the IP laws:10
3D printing should be lightly regulated, because it enables precisely the kind of creation and progress of the useful arts and sciences that intellectual property is supposed to foster.
Others will look for creative, positive approaches and trust in the free market system. It would be nice to think that the stakeholders will work out their problems in proactive, creative, and amicable ways. As Hod Lipson and Melba Kurman wrote, "Wise companies will embrace 3D printing to enrich the users' experience, not embark on quixotic IP battles against their own customers."11 These wise words apply to all legal disputes in the 3D printing space, not only those involving IP rights. But it is more likely that 3D printing will be as much of a full employment program for lawyers as the internet has been.
In a recent interview, I was asked if illegal activity away from control will be a bad thing. My answer was that it may not make sense to judge it as good or bad. Taking the music industry as an example, widespread illegal file sharing led to revamping the industry's business models. People like iTunes and similar businesses and many people use them rather than sharing illegal music. So was widespread illegal file sharing bad? Arguably, no. It resulted in the market finding its own solution.
Law enforcement worries about 3D printing away from control because 3D printing could become the devil's playground. Like anything else, 3D printing has a dark side and some people will be called to it. Guns have already been 3D printed, some within control and some away from control. Thieves are already using these machines to 3D print new types of crime. Counterfeiters, drug dealers, black marketeers, gangsters, terrorists, and other criminals will not be far behind. For more on this, see my video "3D Printing: the Dark Side and the Bright Side".
So should the 3D printing of guns be banned? Banning any new technology is a knee-jerk reaction based in fear and the incorrect assumption that the bad guys will obey the law. In the early days of radio, some people feared that new invention would be used to explode bombs at a distance. Lucky for the future, no one banned radio because of such fears.
As the Dark Side of 3D printing comes to light, legislators, regulators, and courts will grapple with new kinds of legal problems. For example, if it is not currently illegal to 3D print false fronts for ATM machines and provide 24 hour support for criminals who use them—as some people are now doing—it soon will be.12 Although I don't generally favor more laws of any kind, probably no one would disagree that outlawing such things is okay. The question is how far should the law go in addressing such problems? As Spiro Dhapi observed in his article urging European policy makers to prepare for a 3D printed world:13
Consumers' private use poses new challenges for the industry and for legislators in identifying the rules and legal framework that will combine growth and innovation, without suffocating development within society, increase in standards of living and respect for citizens' individual freedoms.
There are powerful forces at work in 3D printing. It can feed the human drive to make things and democratize manufacturing, while doing so away from control may neutralize distrust of government, overly restrictive laws and regulations, and the ever-encroaching Nanny State.
One risk to the development and adoption of 3D printing is that governments will try to regulate the machines themselves. For example, there have already been calls to require 3D printers to recognize and refuse to print gun parts. Such efforts are the wrong approach. When the Industrial Revolution led to the mass production of weapons, governments did not react by requiring that machines be rendered technically incapable of making gun parts. Instead, they regulated the sale and use of such weapons. As I said to the U.S. States Attorneys General, "don't blame the technology." Instead, blame the people who misuse it.
This principle is important for another reason. Trying to control what types of things 3D printers are technically capable of printing is ultimately doomed to failure because the very idea is grounded in a pre-3D printing paradigm that assumes 3D printed things will look and feel anything like things made by traditional methods. Guns need not look like guns, so any efforts to make 3D printers incapable of making things that look like guns could render them incapable of making anything.
The better approach is to regulate the use of illegal objects that emerge from them. Although 3D printing away from control could rob such laws of some of their bite, such an approach makes people responsible for their actions without trying to control what the machines can and can't do. As U.S. Supreme Court Justice Antonin Scalia said during a recent speech, "Legal constraint, the opposite of freedom, is in most of its manifestations a cure for irresponsibility." Justice Scalia also quoted James Madison's famous edict "If men were angels, no government would be necessary."14 Laws should regulate human action, not machines.
3D printing industry analysts fear that court decisions, laws, and regulations related to IP could hinder innovation. The same could be true of the judicial and legislative response to any legal issues raised by this disruptive technology. New laws could evolve so as to foster the technology, or to stifle it. As Melba Kurman observed.15
The bad news is that as more design and manufacturing migrates "away from control," the temptation arises to encourage the passage of laws whose primary intent is to blindly protect today's established "brick and mortar" business models. Instead, our goal as legal professionals, policymakers, businesspeople, academics and 3D printing experts and enthusiasts should be to seek disruption. Ideally, the correct legal framework would actually accelerate the development of a 3D printed manufacturing economy so it can live up to its full disruptive potential.
I agree with Kurman: seek disruption, which is another way of saying "seek change." Most people fear change, especially if it may upset their applecarts. 3D printing may upset many applecarts, but an incredible amount of good can come of it. New laws will not protect the apples anyway. The very nature of 3D printing away from control is that it can't be controlled, so new laws to prevent 3D printing away from control would be futile.
Where safety is an issue, balanced legal efforts to make 3D printed products safe is probably good for society. But for issues other than safety, keeping legal noses out of 3D printing and allowing the marketplace to decide may be better for society. In other words, let's let the market find its own solutions.
Although 3D printing away from control may challenge policy makers to cope with disruption of the status quo, this technology also presents incredible opportunities for nation-building through thriving economies.
America has been bleeding factory jobs since World War II, as have other countries with high intellectual capital and high standards of living, which mean high labor costs. The UK is in a similar pickle. As its empire slowly faded, so did factory jobs. During a speech in Australia, I heard the same laments we have heard in the U.S. for years: jobs are being lost to countries with substantially lower wages. And factory job shrinkage is not confined to the English-speaking world. In the 1980s, Japan was America's manufacturing nemesis and seemed economically unstoppable. But it now shares our boat.
3D printing can reverse these trends, changing where we make things by distributing manufacturing all over the world, fueling a manufacturing renaissance in countries with high intellectual capital and high manufacturing costs, repatriating jobs by enabling companies to make things, profitably, at the point of need without concern for economies of scale, eliminating boom and bust economies, replacing large companies with thousands or tens of thousands of small companies, putting most countries on a sustainable path of regional manufacturing, and making some jobs obsolete while creating new types of companies and jobs that never existed before (for a fuller explanation, see my video "3D Printing and the Future (or Demise) of Intellectual Property".
In its 2013 3D printing study, IBM found that "a substantial portion of manufacturers may be caught off-guard by the rapid changes underway."16 The same will probably be true of government policy makers, who may be distracted by the potential effects of 3D printing away from control and the Dark Side of the technology, or 3D printing simply may not be on their radar screens.
So how can policy makers be ready and undistracted? When the Attorney General of one of the U.S. states asked me how to prepare for the Dark Side and the Bright Side of 3D printing, my possibly-too-glib answer was "hire me to advise you." Here are more constructive suggestions.
To be ready and undistracted, policy makers can follow this roadmap:
1. Form a task force of to identify stakeholders, then invite them to:
Stakeholders should be drawn from all relevant departments and should have some level of clout.
2. Aided by outside consultants with expertise in the 3D printing industry, the task force should oversee initiatives in four basic areas: Analysis, Education, Investment, and Implementation:
Many opportunities are lost because government moves too slowly.
According to Engineering.com, skilled 3D printing-related jobs soared 1384% from 2010 to 2014 and were up 103% percent from 2013 to 2014. The jobs most in demand were industrial and mechanical engineers and software developers.19
According to the U.S. Bureau of Labor Statistics, the U.S. will have about 9.2 million jobs for skilled workers in 2020. But according to the National Science Foundation, there will not be enough qualified people to fill them.20
Policy makers' guiding principle should be that 3D printing is about jobs. Adoption of this technology means more jobs. Thus, all initiatives, legislation, and regulation, should be subjected to what I call the Adoption Test: Does it help or hinder the adoption of the technology? If the answer is yes, fast-track it. If the answer is no, go back to the drawing board.
Endnotes
1 Press release; "Gartner Reveals Top Predictions for IT Organizations and Users for 2014 and Beyond"; October 8, 2013; http://www.gartner.com/newsroom/id/2603215.
2 Staff writer; "Baby's Life Saved With Groundbreaking 3D Printed Device From University Of Michigan That Restored His Breathing;" Health System University of Michigan; May 22, 2013; http://www.uofmhealth.org/news/archive/201305/baby%E2%80%99s-life-saved-groundbreaking-3d-printed-device.
3 Andrew Wheeler; "MedShape Inc. Receives FDA Clearance for 3D Printed Titanium Medical Device;" 3D Printing Industry News; February 3, 2015.
4 Hod Lipson and Melba Kurman; Fabricated: The New World of 3D Printing; John Wiley & Sons; 2013; p. 3.
5 Melba Kurman; "Carrots, Not Sticks: Rethinking Enforcement of Intellectual Property Rights for 3D-Printed Manufacturing;" 3D Printing and Additive Manufacturing; Vol. 1, No. 1, 2014, p. 45, 47.
6 "3D Printing Services Expanded Across Nation;" ups.com; last visited June 22, 2015; http://www.theupsstore.com/small-business-solutions/Pages/3D-printing.aspx.
7 Kyle Maxey; "Hiding Contraband in Encrypted 3D Models;" Engineering.com; November 7, 2013; http://www.engineering.com/3DPrinting/3DPrintingArticles/ArticleID/6599/Hiding-Contraband-in-Encrypted-3D-Models.aspx.
8 Lipson and Kurman, Fabricated, id., p. 229.
9 Paul Brody and Veena Pureswaran; "The New Software-Defined Supply Chain;" IBM Institute for Business Value; July 2013, http://www-935.ibm.com/services/us/gbs/thoughtleadership/software-defined-supply-chain/; p. 12.
10 Deven Desai and Gerard Magliocca; "Patents, Meet Napster: 3D Printing and the Digitalization of Things;" 102 Geo. L.J. 1691; October 9, 2013; http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2338067; p. 58.
11 Melba Kurman, Hod Lipson; "The Truth About 3D-Printing Piracy;" Popular Mechanics, June 2014, p. 73.
12 Jelmer Luimstra; "Criminals Use 3D Printers to Mass-Produce Skimming Devices;" 3D Printing.com; March 24, 2014; http://3dprinting.com/news/criminals-use-3d-printers-mass-produce-skimming-devices/.
13 Spiro Dhapi; "EU Policy Makers Begin to Address Challenges of 3D Printing to Prepare Society for Changes"; The Parliament Magazine; June 2, 2015; http://inside3dprinting.com/eu-policy-makers-begin-to-address-challenges-of-3d-printing-to-prepare-society-for-changes/?utm_source=Daily+3D+Printing+News&utm_campaign=3e7f0ec7b7-Latest_3D_Printing_News_06_03_2015_6_2_2015&utm_medium=email&utm_term=0_861dc04374-3e7f0ec7b7-226645849.
14 U.S. Supreme Court Justice Antonin Scalia; "Commencement Address Stone Ridge High School;" Washington. D.C., June 4, 2015; http://www.businessinsider.com/justice-scalias-graduation-speech-at-stone-ridge-high-school-2015-6 (video).
15 Melba Kurman; "Intellectual Property in the Age of 3D Printed Manufacturing;" US Congressional Briefing; August 5th, 2014; Washington, DC; reprinted as Melba Kurman; "How To Build A 3D Printing Economy: Intellectual Property, Industry Standards And Consumer Safety;" International Trademark Association 3D Printing/Additive Manufacturing: Cutting-Edge IP and Business Implications Course Materials; New York; March 10-11, 2015; p. 1.
16 Paul Brody and Veena Pureswaran; "The New Software-Defined Supply Chain;" IBM Institute for Business Value; July 2013, http://www-935.ibm.com/services/us/gbs/thoughtleadership/software-defined-supply-chain/ ; p. 5.
17 Fabricated at p. 35; Kurman: Carrots, Not Sticks at p. 50, citing www.census.gov/econ/susb.
18 Staff writer; "The Stats;" Money; March 2015; p. 24.
19 Sandra Helsel; "Analysis: Demand for 3D Printing Skills Soars;" Inside 3D Printing; September 12, 2014; http://inside3dprinting.com/analysis-demand-for-3d-printing-skills-soars/?utm_source=Inside%203D%20Printing%20Latest%20News&utm_campaign=268be65f09-Inside_3D_Printing_Daily_News_09_12_2014_9_11_2014&utm_medium=email&utm_term=0_861dc04374-268be65f09-226645849.
20 Neil Gershenfeld; "How to Make Almost Anything;" Foreign Affairs; Vol. 91, No. 6; Nov.-Dec. 2012; pp. 57.
Originally printed in Intellectual Property Watch. This article is for informational purposes, is not intended to constitute legal advice, and may be considered advertising under applicable state laws. This article is only the opinion of the authors and is not attributable to Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, or the firm's clients.
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