So finally a spat that started back in 2012 has been put to bed, unusually for the 3d printing industry it has been done, on the surface at least, with the minimum of fuss and with what appears to be a mutually beneficial outcome.
The case hinged around alleged patent infringement by Formlabs on one 3D Systems myriad of stereolithography patents, their IP catalogue in this area is extensive and back in 2012 the Rock Hill headquartered giant warned they would protect the interests and it appears they have stood there ground and done so.
On Tuesday night we spotted a filing with the District Court announcing an agreement and this morning we note an SEC filing, although interestingly not a press release that contains the following:
On December 1, 2014 the registrant's subsidiary 3D Systems, Inc. ("3D Systems") and Formlabs, Inc. ("Formlabs") agreed to the entry of an Order dismissing all claims and counterclaims with prejudice in an action 3D Systems filed against Formlabs for infringement of United States Patent Nos. 5,554,336, 5,569,431, 5,609,812, 5,609,813, 5,762,856, 5,779,967, 5,785,918, and 5,814,265 (together, the "Subject Patents"), captioned as 3D Systems, Inc. v. Formlabs, Inc., 1:13-cv-07973-RWS, in the United States District Court for the Southern District of New York.
The Order was entered into pursuant to the terms of a Settlement and License Agreement (the "Agreement") dated November 25, 2014 between 3D Systems and Formlabs under which 3D Systems granted to Formlabs a worldwide, non-exclusive, royalty bearing, license, without the right to sublicense, to make and sell Formlabs products under the Subject Patents. In consideration of the license and releases granted by 3D Systems, Formlabs agreed to pay 3D Systems a royalty of 8.0% of net sales of Formlabs products through the effective period.
So, it is a decent royalty, although in truth not much more than a commission on sales. It would be interesting to know if it is backdated for all sales of Formlabs machines? I guess it depends on how amicable the discussions were, and it gives 3D Systems a nice addition to the bottom line going forward which the shareholders will appreciate.
Formlabs do seem to be one of the new kids on the block that are going to stick around, particularly now this dispute has been settled, they are already a consistent presence on the 3D Printing show circuit and although the Kickstarter funded startup is still in its early years they already have a significant profile, helped in part by their inclusion in the film Print The Legend, which also looked closely at this dispute whilst it was in play.
It is hard to say for sure what this means for the sector, and indeed the relationship between the companies in the future, 3D Systems are known for being acquisitive so this model may well signal a shift in their approach. For Formlabs it clearly frees some shackles and 92% is better than nothing!
One final thing to throw in is that does this precedent open the door for many more variations on the SLA theme, I for one would not be surprised if we see many more SLA type machines emerging, as companies chance their arm for 92%.