September 2014
Managing Intellectual Property, Chinese edition
By E. Robert Yoches; Shaobin Zhu
Although starting only in the 2000’s, many Chinese companies are now making 3D-printing-related products such as 3D printers, materials, and manufactured articles. Because these companies have started exporting their products, they need to understand and comply with the intellectual property laws of different countries. To avoid problems in the United States, where Chinese companies have already faced lawsuits, Chinese companies should consider several IP strategies to protect themselves and minimize IP risks.
U.S. companies have been using IP to protect their market for several years. Recently, two leaders in 3D-printing in the United States, Stratasys Ltd. and 3D Systems Inc., sued competitors offering low-cost printers. In November 2012, 3D Systems sued Formlabs, a U.S. start-up 3D printer manufacturer, and Kickstarter, Formlabs’ crowdsource funder, for infringing a patent relating to stereolithography. Although 3D Systems voluntarily dismissed the first case, it filed a new lawsuit in November 2013, asserting eight patents covering methods and apparatus for stereolithography. The case is pending.
In November 2013, Stratasys sued Afinia, a mid-sized manufacturer of 3D-printers, for patent infringement, asserting Afinia’s desktop H-Series 3D Printer infringed four patents relating to Fused Deposition Modeling (FDM).The complaint indicates Afinia’s H-Series 3D Printer is a rebranded and repackaged UP! printer made by a Chinese company, and resellers and manufacturers such as Afinia import, rebrand, and repackage the UP! printer. Commentators viewed this lawsuit as Stratasys’s business strategy to curb its competitors, including Chinese competitors, from flooding low-cost 3D printers into the U.S. market. The case is pending.
How can a Chinese 3D-printing company minimize the risk of being sued for IP infringement? The biggest problem is patents. A company can analyze the patents of its competitors and seek to avoid them. It can do this itself by searching several databases for U.S. patents, or it can engage an experienced U.S. IP attorney to work with to find patents and to analyze the risks of infringement by certain designs. That attorney can also advise the company on alternatives, such as licensing, buying from licensed suppliers, and options to invalidate troublesome patents. The best way to identify patents is to monitor the news and learn which patents have been involved in litigation.
Another way to reduce risks of patent infringement from components and materials the company purchases is to require from suppliers a warranty against infringement and indemnification in the case of lawsuits. This only works, though, if the supplier is financially stable enough to meet any commitments it makes.
Avoiding design patent infringement requires ensuring that the company’s product does not have too many of the design features in a competitor’s patent. Avoiding trademark problems involves searching for trademarks that might be similar to those the company is considering, and avoiding similarity that may cause confusion. U.S. attorneys can help with this as well.
Avoiding trade secret and copyright problems is the simplest task. Those issues require copying, so abstaining from copying removes these threats.
Chinese companies should, at the same time, establish effective IP strategies to protect their innovations and features using patents, trademarks, trade secrets, and copyrights.
(1) Design Patent: A company can acquire a design patent to protect a shape or surface ornamentation of a printed article or even a 3D printer, and to claim an entire object or only an innovative part. A design patent is less expensive and quicker to obtain and easier to show infringement than a utility patent.
(2) Utility Patent: A company can acquire a utility patent to protect functional aspects of a 3D printer, a material, and a printed article. The utility patent provides broad protection, including products unknown at the time of the invention and covering many different embodiments of a single invention.
(3) Trademarks and Trade Dress: A company can protect its brand name by registering a trademark or service mark, which is a word, phrase, design, or expression that identifies the source of a 3D printer or a printed article. A mark excludes others from using an identical or confusingly similar mark. Also, a company can register a trade dress to protect packaging and design of a printed article or even a 3D printer.
(4) Trade Secret: A 3D-printing company should take reasonable measures to protect its trade secrets, such as engineering information, processes, know-how, formulas, business and financial information, computer programs, customer and supplier lists, or other information that is not generally known or reasonably ascertainable, by which a business can obtain an economic advantage over competitors or customers. The reasonable measures include documenting trade secrets in paper or electronic form, marking a notice of confidentiality on each document, storing the documents in secure locations requiring sign-in and sign-out procedures, limiting access to the documents, signing a nondisclosure agreement with a party accessing trade secrets, etc.
(5) Copyright: A company can use copyright to protect creative expression (but not functions) of an instruction file, a printed article, or even a 3D printer. A copyright owner has exclusive rights to reproduce and distribute the copyrighted work.
(6) Digital Rights Management: A company can use digital rights management (“DRM”) measures to control access to its copyrighted instruction file. Circumventing these measures violates the Digital Millennium Copyright Act (“DMCA”). A copyright owner can request a service provider to remove an instruction file posted on the Internet via a DMCA takedown procedure.
As Chinese companies sell more 3D printing products, they face increasing challenges from IP owners, especially in United States. In view of recent US IP litigation, Chinese companies should take necessary precautions to minimize IP risks.
Copyright © Finnegan, Henderson, Farabow, Garrett & Dunner, LLP. 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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