Editorial Board

3-D Printing: the Ultimate Intellectual-Property Threat?

Spend a few minutes on Shapeways.com, an online marketplace, and you get a glimpse of a very odd future. You can buy mustache cuff links, a pencil topper shaped like a Roman halberd, a pixelated bust of a glowering Steve Jobs, or a set of dice modeled on the Deathly Hallows of “Harry Potter” fame. All the items are designed by the site’s users and can be manufactured by Shapeways using 3-D printing technology. And they’re all for sale.

The Internet is now alive with creative physical objects like these. Although most may seem whimsical to the casual browser, they reveal some serious intellectual-property quandaries that will only deepen as the era of 3-D printing unfolds.

One is copying. Using 3-D scanners, it won’t be difficult to translate the exact dimensions of an existing object into a digital file and upload it for sale. That means you could replicate all kinds of physical things that others have created -- many of them unpatented and not subject to copyright -- and profit from them. You might be able to counterfeit expensive designer sunglasses and sell them at a steep discount to the originals. Or, as the Harry Potter dice indicate, you could appropriate your favorite pop-culture artifacts and apply them to new products.

Such repurposing may soon be routine. And it will be difficult, maybe impossible, to stop. In response, established companies attempting to curtail such practices -- or simply leveraging flaws in the intellectual-property system -- might overreact, suing a promising new industry with such vigor that they forestall legitimate innovation.

Stopping Meddlers

First, for established companies worried that digital meddlers might copy their products for profit, it’s possible that new technology could help. A team at Virginia Tech University, for instance, is experimenting with embedding quantum dots into 3-D printed material. Companies could tag products with identifying markers to help prevent counterfeiting. It may be decades before such technology is in common use, however, and the history of digital-rights management in other fields suggests that plenty of challenges will arise along the way. For example: It might not work.

Lawsuits, of course, offer another strategy, and they may often be justified. But most industrial designs aren’t patented, and large companies that do have IP protection for their merchandise would be wise to consider the lessons of the music industry before rampantly suing. The analogy is inexact but instructive: Record companies spent years and millions of dollars alienating customers while failing to prevent pirated use of their work. Belatedly, iTunes, Spotify and other services made paying for music easy. Although the industry’s revenue hasn’t recovered, music companies have found a way to adapt to disruption.

Which brings us back to the Harry Potter dice. Let’s say the dice are a hit on Shapeways, and Warner Bros. -- which manages the Harry Potter brand -- thinks they represent an infringement. The company could demand that Shapeways take the dice down. It could sue. Or it could find a mutually beneficial way to profit -- say, by negotiating a license.

Even better, argues Michael Weinberg, a vice president at the digital-advocacy group Public Knowledge, Warner Bros. could simply publish a general license that would allow any inventor to make Harry Potter products, provided they notify Warner Bros., give it a percentage of the revenue and adhere to certain parameters. That won’t sit comfortably with companies that want to maintain tight creative control over their products. But given that 3-D printing may lead to an explosion in copied goods, such an agreement could offer a competitive advantage over companies that prefer expensive (and possibly ineffectual) litigation.

New Model

One of the big differences with the music business, however, is that 3-D printing won’t just pit huge corporations against small-time users; it may pit everyone against everyone. If you’re a small manufacturer of 3-D printed gadgets, you may not have the resources or time to apply for IP protection while the whole Web is copying your ideas and profiting from them. And you may not have the money to start suing.

Here’s where more flexible intellectual-property laws may help. One option to consider is a utility model. Like patents, utility models, which exist in Germany and many other countries, grant the holders the exclusive right to produce, use and market their inventions. But there are a few crucial differences. They’re cheaper to obtain and their term is shorter (usually seven to 10 years, as opposed to 20 years for most utility patents). They’re also nonrenewable. The patent office doesn’t examine the invention in detail to see if it complies with the requirement of being “new, nonobvious and useful,” so the registration process is much faster. But anyone can challenge, for a fee, whether your invention actually does meet those standards -- and the losing party pays for the proceedings. The utility model is weaker than a patent, but would offer small companies a fast and low-cost way to shield their inventions and start seeking investment.

Innovators would also benefit from legislation that discourages companies from amassing broad patents on inventions that they don’t intend to bring to market but nevertheless hope to profit from via lawsuits and threats. The Shield Act -- a bipartisan bill introduced in the House that would force such “non-practicing entities” (more commonly called trolls) to pay defendants’ legal costs if they lose a lawsuit -- isn’t perfect, but it’s on the right track toward curtailing abuse.

As Shapeways makes clear, 3-D printing is already revolutionizing product design and customization. It seems certain to disrupt a lot of entrenched businesses, and to present our intellectual-property system with novel and complicated challenges. We’ll need to confront those challenges with flexibility and innovation.

(This is the fourth editorial in a four-part series. Read part one, part two and part three.)

    To contact the senior editor responsible for Bloomberg View’s editorials: David Shipley at davidshipley@bloomberg.net .

    Before it's here, it's on the Bloomberg Terminal.