Geo Week News

May 28, 2013

3D Systems gets 6-month stay for settlement talks over patent lawsuit


Smaller competitor FormLabs sued over alleged patent infringement; Kickstarter stays out of settlement discussion

A federal district court judge has okayed settlement talks between 3D printing giant 3D Systems, Inc. and its smaller competitor, FormLabs Inc., granting a stay in the six-month old case.

3D Systems claims the defendants’ infringed at least one of its U.S. patents covering methods for creating physical 3D objects using solid imaging techniques, including stereolithographic techniques.

Headquartered in Rock Hill, S.C., 3D Systems (NYSE: DDD) manufactures and markets commercial and consumer 3D printers, printing materials and software services as well as CAD modeling, reverse engineering and inspection software tools.

Last September, Cambridge, Mass.-based Formlabs launched an online sales campaign with crowdsourcing platform, Brooklyn-based Kickstarter, with a goal of raising $100,000. By the end of the campaign a month later, Formlabs had been pledged nearly $3 million from just over 2,000 backers, who pledged as little as $5 for an .STL file to as much as $10,000 for a Form 1 3D printer.

The majority of the funds for Formlabs were raised by sales of 1,028 Form 1 3D printers to be delivered February to April 2013. The printers were initially sold at $2,299 before prices were increased to $2,999.

3D Systems claims Formlabs and its sales agent Kickstarter knew or should have known about, “or were willfully blind to,” 3D Systems’ extensive patent rights in the area of 3D printing and stereolithography, including but not limited to 3D Systems’ U.S. Patent No. 5,597,520 which covers methods of stereolithographically forming a 3D object.

Formlabs promoted its 3D printers saying they used “stereolithography (SL) technology,” a technology patented in 1986 by 3D Systems’ founder Charles Hull. Formlabs said it did not infringe on the patent.

3D Systems sued Formlabs and Kickstarter on Nov. 20 in Case #: 0:12-cv-03323-TLW.

“3D Systems invented and pioneered the 3D printing technology of stereolithography and has many active patents covering various aspects of the stereolithography process,” said Andrew Johnson, 3D Systems’ general counsel said at the time in a press release. “Although Formlabs has publicly stated that certain patents have expired, 3D Systems believes the Form 1 3D printer infringes at least one of our patents, and we intend to enforce our patent rights.”

Since then, the defendants sought a motion to dismiss the case, which was mooted by an amended complaint filing from 3D Systems in April. The two sides agreed to engage in settlement talks soon after.

Earlier this month, 3D Systems and Formlabs agreed to negotiate what is being called “an alternate dispute resolution protocol.”

That means the two sides will have to meet a series of deadlines over the next four months resolve the legal complaint. Kickstarter is not participating in settlement talks but believes “a stay is appropriate to permit discussions between 3D Systems and Formlabs.”

Chief U.S. District Court Judge Terry Wooten in South Carolina has stayed the litigation until Sept. 3, when the two sides will have another 30 days to answer, move or otherwise plead in response to 3D systems’ amended complaint if the matter is not resolved.

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