Legal and Regulatory

The fight isn’t over yet: Markforged files civil complaint against Desktop Metal

A year after seemingly settling their differences over metal 3D printer IP ownership, Markforged and Desktop Metal are at the center of a new legal complaint. This time, through undersigned attorneys Quinn Emanuel Urquhart & Sullivan LLP, civil action has been taken by Markforged. The nature of its complaint is that Desktop Metal has breached the prior contract between the two companies in which both parties agreed to cease disparaging each other’s businesses and products – “a promise that,” according to Markforged, Desktop Metal has “steadfastly ignored starting even before the ink was dry on the Settlement Agreement.” It also accuses Desktop Metal CEO Ric Fulop of “surreptitiously” incorporating his company while sitting as an active director of the board at Markforged.

In a fever of fierce competition between the Markforged’s Metal X 3D printer and the Desktop Metal Studio System, Desktop Metal has been accused of acting like “like proverbial schoolyard bullies,” disseminating false information about the Metal X, and “engaging in a persistent pattern of unfair and deceptive conduct.”

For this alleged offence, Markforged is seeking a jury trial to award three times actual damages to its business, punitive damages, litigation costs and any other relief deemed fit, as well as a permanent injunction against Dekstop Metal, it’s executives, and its employees.

Markforged and Desktop Metal

The history between Desktop Metal and Markforged is deeply entwined. When company CEO Greg Mark founded Markforged in 2013, Fulop was appointed as a founding board member while working as a General Partner of venture capital fund North Bridge. Through North Bridge, Fulop helped lead Markforged’s seed and series A funding rounds, which would finance the development of its carbon fiber 3D printers.

Fulop remained on the board at Markforged until September 2015 and formally founded Desktop Metal in October 2015. Prior to this foundation, Fulop also expressed his intentions to start a new company and enlisted a third party, the CEO of Onshape and Markforged advisor, to review his plans for Desktop Metal and determine any IP infringements. As the Case Filing states “No issues were raised to Mr. Fulop.” According to Bloomberg however Desktop Metal was incorporated August 25th 2015, prior to Fulop’s departure from the board. This activity has become a bone of contention in the latest complaint from Markforged, however it is not the real crux of its issues with the company.

The Metal X 3D printer from Markforged. Photo via Markforged
The Metal X 3D printer from Markforged. Photo via Markforged

Markforged’s complaint

A lot of other activity between the two companies has happened since Fulop left the board at Markforged, and this led to the filing of the IP infringement allegations made by Desktop Metal in March 2018. As previously stated, the two companies managed to reach a settlement over their issues, with the court ruling “Both Markforged and Desktop Metal acknowledge that neither company, nor the individuals named in the litigation, misappropriated any trade secret or confidential information belonging to the other.”

In the new complaint, Markforged alleges that Desktop Metal has not kept its word with regard to this settlement, referencing a set of flyers that Desktop Metal reportedly sent to its resellers. In the flyers, Desktop Metal presents comparisons between its Studio System and the Metal X, which Markforged’s lawyers have deemed “false” and a “violation” of their agreement. As such, the legal team has been sending letters to Desktop Metal, requesting $100 thousand in damages for each reseller and potential customer that has seen the leaflet containing the false statements. Unable to reach a settlement, the case has now escalated to a dispute for the court.

In a statement on behalf of the company, Markforged has said, “Metal 3D printing is on pace to change manufacturing as we know it, and Markforged is leading the charge. We believe healthy competition is good for the industry, innovation, and—most importantly—customers,”

“Unfortunately, as alleged in our complaint, Desktop Metal has chosen to compete by spreading false information. Markforged is taking this necessary step to ensure customers are making their buying decisions on facts, not lies.”

Desktop Metal’s response to the allegation has been as follows: “We are aware of the filing by MarkForged and believe the claims are without merit. We will be addressing the allegations in the appropriate forum.”

Desktop Metal Studio System prepares for shipping. Photo via Desktop Metal.
A Desktop Metal Studio System prepares for shipping. Photo via Desktop Metal.

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Featured image shows sintering a 3D printed 17-4 stainless steel sprocket 3D printed on the Metal X. Photo via Markforged.

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