At around the turn of this century, the music industry panicked. The sudden rise of peer-to-peer file-sharing Internet services was threatening the heart of the multi-billion dollar record industry. Listeners no longer had to purchase CDs from record stores, but instead could download songs for free. This new disruptive technology triggered various lawsuits that led to injunctions and ultimately the shutdown of numerous peer-to-peer outfits, most notably Napster, which shuttered in mid-2001.

But the damage had been done. By 2008, U.S. music industry revenues had fallen from $14.6 billion in 1999 to a mere $8.5 billion – a decline of some 40 percent. The film industry also suffered because of Internet piracy. Although economists disagree over the actual extent to which peer-to-peer file sharing harmed certain industries, the correlating revenue declines are unmistakable.

A similar disruptive technology – known as 3-D printing – is now upon us. The technology has existed for more than 30 years, but recent advances and publicity have caused the general public to take notice.

How does 3-D printing work?

3-D printing generally involves creating objects out of plastic or metal materials. The objects can range from busts of famous people or miniature action figures to parts for engines or medical implants designed to replace bone. The process to create these objects can involve additive manufacturing (building objects by adding material, often layer by layer) or by subtractive manufacturing (sculpting objects by removing material). As one would expect, each of those broad categories involves subclasses, such as stereolithography (applying an ultraviolet laser to a vat of reactive liquid resin), laser-sintering (applying a high-powered laser to a thin layer of plastic or metal powder) and extrusion (pushing through a nozzle heated plastic or metal that immediately hardens).

Much of the current buzz has been caused by the shrinking price of desktop plastic printers. Industry experts now believe such micro-systems will become increasingly common and encourage home use. At the other end of the spectrum, the high-end plastic and metal additive machines currently used by world-class manufacturers for prototyping products cost hundreds of thousands of dollars and require special training and expensive materials to operate. It is these industrial systems that must become ubiquitous and used for production, instead of just for prototyping, for the technology to be truly disruptive.

Recent developments in industrial printing technology and the consumable materials the systems use have made printing for production not only feasible, but potentially profitable. Objects with unique physical and chemical properties can now be consistently and reliably printed, and because of their complexity, some of them can only be created with 3-D printing. The use of printing for full-on production is just starting to gain steam, as well-heeled manufacturers, like General Electric, have recently announced plans to use additive machines in some of their production processes.

The impact of 3-D printing on patents

What changes can we expect from the widespread use of industrial 3-D printing systems? We will continue to see the creation of new types of objects, which could not be created efficiently before. For example, lighter and stronger objects may be created for medical uses, exhibiting varied-density properties similar to bone, made with alloys or resins with unique properties. Life expectancies and quality-of-life measures may also get a boost, as personalized medical devices and tools become more common. Other industries, particularly aerospace, will certainly cross previously unachievable thresholds. But putting aside general societal improvements, how could widespread use of the technology be disruptive?

As occurred with the rise of peer-to-peer file sharing, the rise of 3-D printing technology could make patent infringement easier to achieve, more widespread and more difficult to detect. If industrial printing matures into a common manufacturing process, increased demand for printers and materials will drive economies of scale that lower the costs of procurement and use of industrial printers. As costs fall and printers become affordable for smaller businesses, the ability to protect patented products could become much more difficult.

For example, someone wanting to infringe a utility or design patent covering a particular product would merely need to scan the object into its digital characteristics, and then use the resulting digital file to print an identical replica. Existing barriers that currently minimize someone’s practical ability to infringe may disappear, as extensive tooling, casting, machine shops and the attendant skilled labor, would no longer be required.

Moreover, if the falling costs of industrial 3-D printing make patent infringement easier to do and harder to detect, non-traditional players may be encouraged to become small-scale infringing manufacturers. For instance, small businesses such as mechanics, gunsmiths, repair shops, jewelers, craftsmen and toy stores may start building infringing objects in-house instead of buying licensed versions. In addition, the operations of existing infringers could become more prolific. Combined, such behavior could have sweeping consequences.

Patent owner protection

So, how will patent owners discourage nearly invisible manufacturers from making infringing objects with impunity? First, we may see lawsuits targeting online facilitators, if digital files containing 3-D models of infringing products proliferate (recall Napster). Patent holders may then decide to encourage others to practice their patents by selling digital files of their patented objects for a small fee (analogous to Apple’s iTunes, or similar services). If the problem becomes sufficiently severe, political pressure may cause Congress to pass laws to  regulate the sale and use of 3-D printing technology. Of course, whether such laws would ultimately benefit society depends in large part on how the laws are drafted, and whether they strike the right kind of balance.

The 3-D manufacturing paradigm is likely years away. However, patent owners would be wise to consider the issue now, assess the risks and develop an appropriate patent protection strategy.