Our thought leadership series on the future of 3D printing continues with insights from Dr. Andreas Leupold, lawyer for emerging technologies and IT and editor/author of the book 3D Printing: Law, Business & Technology from Leupold Legal, Germany
While nobody has a magic crystal ball to predict which frontiers 3D printing will move in the future and where this revolutionary manufacturing method will be in five to ten years, it is completely safe to say that the industrialisation of 3D printing is already an integral part of the plans of many businesses, has found its first steps into different industries and will continue to gain momentum The constructional freedom in creating parts and products, the redundancy of injection mold tools, the shorter time to market and cost savings made by printing spare parts as needed instead of warehousing them in large numbers are all driving forces for this.
And naturally the technical and legal challenges that 3D printing brings with it will go hand in hand with these developments: If a company wants to secure its future in 3D printing, it will need to safeguard its own intellectual property and business secrets, avoid infringements of industrial property rights, tackle the question of data ownership in the digital supply chain, reach industrial security agreements with all recipients of 3D printing data, minimize its exposure to product liability and adhere to new technical standards. All this with changing requirements due to the fast moving developments in 3D printing.
Safeguard your intellectual property
As new processes and algorithms are freeing manufacturers from limitations that kept them from harnessing the advantages of 3D printing for large volume production, their exposure to product piracy will also increase. 3D printing will continue to make it easier than ever for counterfeiters to create exact copies of products, as all that is needed for this are the 3D model, a 3D printer and sufficient experience with additive manufacturing processes. 3D printing will also continue to be a highly digitalised process. As such the 3D model can be snatched from a company server or 3D printer of the owner without him even noticing. Companies considering themselves safe because they are not (yet) working with 3D models and printers should better think twice as their products too can be copied by means of a 3D scanner and then manufactured with a 3D printer. Any company offering products that are in high demand and/or innovative must therefore check whether its intellectual property policy is still up to the task of making the most of the protection granted for three dimensional trademarks, product designs, copyrighted works and patents in the advent of 3D printing.
As most companies still lack the expertise needed for 3D printing themselves, they will continue to outsource their additive manufacturing to service providers which will own the rights to all improvements that they make to the products should the company fail to secure rights to all improvements and alterations by means of sound, suitable and intelligent development and licensing agreements.
Avoid infringements of industrial property rights
But protecting one´s own products from counterfeiters will not remain the only legal challenge of 3D printing. The flip side of this is also avoiding infringements of other parties´ IP rights. Before venturing into 3D printing spare parts for products from other manufacturers, companies will therefore need to carry out a comprehensive “Freedom to Operate” analysis which serves the purpose of identifying third party industrial property rights that may only be printed with the prior consent of the respective rights’ holder. This can pose a significant challenge when the design of spare parts has been protected for the original manufacturer since national laws in EU member states still prevents anyone from printing these parts if they cannot be considered “must fit” parts that need to have a predefined shape in order to replace the original part in a more complex machine. This issue has long been dormant, but 3D printing has lent it new prominence prompting the EU Commission to consider an overhaul of the legal framework for the protection of designs. The discussion of whether anyone should be free to 3D print spare parts of any kind, has, however, only just begun and the outcome is still uncertain.
Deal with data ownership
As industrial 3D printing relies on data that is turned into products, data will become the new crown jewels of companies. Data in a 3D printing file or 3D model often contains the blueprint for a new product and machine data often gives a sensitive insight into confidential production parameters. Both should of course be subject to strict confidentiality. But the movement of data for the printing processes also raises the question of who legally owns the machine data generated during additive manufacturing processes and the man-made data needed for 3D printing. It may come as a surprise that the current legal regimes in most countries do not actually provide for a data ownership in the legal sense but only allow for the ownership of physical things. For this reason, the European Commission is evaluating the introduction of a new data producer right. It will take quite some time before this can become a reality, but even then, companies wanting to keep full control of their 3D printing data will have to suitably secure their data rights in all of their agreements with suppliers and service providers.
Enter into industrial security agreements
3D printing on an industrial scale rarely is a closed shop process but often requires the exchange of manufacturing data with suppliers, R&D partners and other recipients. The need for a free flow of data will grow significantly once distributed manufacturing in close vicinity to the locations where spare parts or other industrial goods are needed, becomes the rule. We already can observe efforts in this area. Research done by UPS shows that decentralized 3D printing has a measurable positive impact on the supply chain, 3dhubs has a global network of 5,343 manufacturing services that can be used by its customers and major players in the 3D printing market such as Materialise and DMG Mori Spare Parts have joined forces to create a software based platform that will allow companies to manufacture spare parts decentrally. Such business models require the secure, tamper-safe storage and transmission of all data needed for initiating the printing process and the creation of fail-safe solutions for ensuring the traceability of 3D printed products. Companies engaged in additive manufacturing must ensure a uniform level of security throughout their entire supply chain by planning ahead and concluding legally sound industrial security agreements. These need to address the technical and organizational measures for a safe production and distribution environment before exchanging any 3D models or other data with external partners. This is also needed to claim protection for business secrets since the new EU Directive on the protection of undisclosed know-how and business information has defined prerequisites for granting protection to confidential information. From 2018 onwards, the iconic “for your eyes only” rubber stamp will therefore no longer suffice to protect the most valuable assets of a company. Contracts will also be key to safeguarding company interests. And confidentiality agreements and NDAs will have to achieve more than conventional agreements have done so far.
Minimize your exposure to product liability
New manufacturing and distribution models like distributed manufacturing and the increasing use of 3D printing service providers and novel feedstocks will likely give rise to an increasing product liability of hard and software suppliers, manufacturers of raw materials and many other stakeholders in the digital supply chain. While it is not possible to exclude own liability for damages arising from product defects for consumers, it is well possible to agree on a right of recourse against suppliers of printing materials, machines, software or finished parts that cause such damages. CEO´s may also become personally liable, if suitable clear agreements are not achieved on all measures that must be taken to ensure product safety with everyone in their supply chain.
Adhere to new technical standards
Without doubt, technical standards are very much needed for securing the future of industrial 3D printing because they serve the purpose of providing important guidance on material properties, data formats, test methods and systems reliability to name but a few examples. The joint efforts of the American Standards Organization (ASTM) and ISO to create such standards are therefore to be welcomed. Adhering to these new technical standards, however, will only exonerate European companies from product liability if these standards are transformed into harmonized European standards. Until this happens, technical standards are merely non-binding recommendations that may or may not reflect the state of the art in science and technology that every manufacturer must reach to avoid product liability. Companies will therefore need to give up the widespread belief that they are safe from any product liability as long as they adhere to generally accepted technical standards or customary 3D printing processes that the future may still bring and instead need to ensure themselves that their products are created and manufactured according to the constantly evolving state of the art in science and technology.
In conclusion, I would say that 3D printing is giving companies new freedoms to construct and to operate and making an impact on logistics. All of this is exciting and good for business, but we should not forget to include our legal advisers and in-house counsels in these evolving processes. Identifying areas that need to be reworked to be legally secure is key to keeping company know-how safe and maintaining valuable market positions. And no doubt 3D printing will continue to pose new legal questions as its development proceeds.
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