Afinia Responds to Stratasys II: You Are Anticompetitive and Failed To Disclose Old Patents, PrinterJanuary 31, 2014
Today, Afinia took another big shot at Stratasys’ 3D printing patents. In its amended response, Afinia attempted to bolster its claim in three ways: with evidence that Stratasys was using its patents to monopolize the market, with evidence that Stratasys failed to show the Patent Office one of its own patents that undermined the novelty of a new patent it was applying for, and with evidence that Stratasys failed to show Patent Office one of its own printers that undermined the novelty of another new patent it was applying for.
We’ve been following a patent lawsuit between the 3D printing companies Stratasys and Microboards Technology (maker of the Afinia 3D printer) since it was filed in November. This lawsuit, which involves patents surrounding technology in the printers themselves, is interesting beyond the two companies involved. If Stratasys is correct about their patents, those patents may read onto just about every desktop 3D printer in the market.
Here is background on Stratasys’ complaint in the case, and here is background on Afinia’s original response. Both of them include a caveat that is also applicable today: these are allegations made, in this case by Afinia. Afinia thinks they are true enough to use them in court, but we won’t fully know how true they are until a court takes a look. In other words, just because Afinia alleges it doesn’t make it so.
Stratasys – a company that is long established in the world of 3D printing – claims that it has four patents that cover different elements of Afinia’s desktop 3D printer. As noted earlier, as presented by Stratasys these patents are extremely broad and may arguably cover most current desktop 3D printers, including open source ones. Afinia responded to Stratasys’ complaint by challenging the validity of those very patents.
This challenge is important because Afinia is not merely responding that their printer does not infringe on the Stratasys patent. Instead, Afinia is largely responding by claiming that the Stratasys patents are not valid at all. If that is the case, Stratasys will not be able to assert these patents against anyone. That distinction – between Afinia’s non-infringement and full-on invalidity of the patents – is probably worth keeping in mind as this suit progresses. The first would be a win for Afinia and potentially any printers that work exactly the same way. The second would have a much broader impact on the wider 3D printing world.
Today, Afinia filed an amended response to Stratasys’ original complaint. As you may recall, Afinia’s original response mostly focused on ways in which the Stratasys patents incorporated technology and patents that were already in existence at the time of the application. Afinia alleged that the written record of the application process showed all the ways that Stratasys agreed to narrow the patents in order to avoid these existing elements. The end result of this narrowing was that Afinia felt that patents didn’t really cover anything (especially not Afinia’s printer).
Today’s amended response adds three additional pieces of evidence.
Stratatsys is Trying to Monopolize the Market
The original Afinia response included an allegation that the lawsuit was partially motivated by Stratasys’ desire to monopolize part of the 3D printing market. This amended complaint beefs up Afinia’s evidence to back up the allegation.
First, Afinia has actual numbers of printers sold and alleges that the now-merged Stratasys and Objet control 50% of the industrial 3D printing market. This market share allowed Stratasys to control the price for 3D printing inputs – for example, ABS plastic.
Second, all Stratasys printers came with a license. This is the Terms of Service of the printer – very similar to a TOS you might agree to when you use any web service. Part of the license required Stratasys customers to grant Stratasys and all Stratasys “customers, licensors, and other authorized users” a second license. This license was for “any patents and copyrights” that involve “3D printing equipment, the use or functionality of 3D printing equipment, and/or compositions used or created during the functioning of 3D printing equipment” developed using the Stratasys printer and is “derived from and/or improves upon the Intellectual Property and/or trade secrets of Stratasys.” (For those interested, this exact language is on page 11 of the response).
Afinia alleges that this license term is fairly simple – it means that any Stratasys customer that develops an improved 3D printing process is required to license it to Stratasys for free. Furthermore, the new improvement must also be freely licensed to all Stratasys customers. Remember – according to the earlier part of this section, that’s 50% of the market.
The end result of this condition – which Afinia calls problematic for a number of reasons – is to reduce incentives to independently innovate in the world of 3D printing. After all, if any new invention is immediately licensed to 50% of your potential customers, why bother?
Stratasys Hid A Patent
As detailed in the summary of Afinia’s original response, a big part of the Afinia’s strategy was to try and show how Stratasys had reduced the scope of its patent when it was confronted with prior art.
In the context of the ‘925 patent, that meant limiting the scope of the patent to adjusting the rate of dispensation to control porosity of a printed object – controlling infill and density. However, at the time the ‘925 patent was being applied, Stratasys already had a patent (the ‘329 patent) that referenced limiting the rate of dispensation to control the porosity of a printed object.
The end result might feel a bit like prior art, but it is actually slightly different. Because the “prior art” was a patent held by Stratasys, and Stratasys is obligated to submit to the Patent Office all relevant materials, this is considered inequitable conduct that would prevent Stratasys from enforcing the patent at all regardless of its validity.
Stratasys Had an Older Printer
In this amended response, it looks like Afinia has found further evidence of technology that predates one Stratasys patent. And they didn’t have to look far. According to Afinia, Stratasys was selling a printer (the FDM-1650) that included the technology covered in the ‘058 patent.
Like the ‘329 patent above, this is the type of thing that Stratasys is required to disclose during an application process. And like the ‘329 patent issue above, if it is true that Stratasys’ own printer would have been covered by the patent that it was applying for, failing to disclose is inequitable conduct. Such conduct would serve as a bar to Stratasys trying to enforce its patent.
What Happens Now
In many ways, we are basically where we were a month ago when Afinia first responded. Faced with a patent infringement lawsuit Afinia lawyered up and marshaled evidence it believes undermines Stratasys’ patent claims. We still don’t have any sort of judgment deciding which story – Stratasys’ or Afinia’s – is the closest to the real story. And we will need to wait for a trial or a settlement (or, I suppose, both sides dropping their lawsuits) to find out.
The big difference here is that this amended complaint includes even more evidence that Afinia believes undermines the Stratasys patents. If true, they impose major limits on the ‘925 and the ‘058 patents. They may also decrease Stratasys’ excitement about this lawsuit.
But, in the absence of additional information from Afinia, the ball is now in Stratasys’ court. They have to decide how concerned (if at all) they are about this new information, and what it means for this lawsuit.