Reality Versus Hype: Analyzing the Innovation Hype Cycle on 3D Scanning and Printing

No offense to Gartner, but I believe their analysts have gotten it wrong in the assessment of 3D printing and 3D scanners included in their 2012 Hype Cycle infographic.

Gartner concludes that both 3D printing and scanning are 5-10 years away from their Plateau of Productivity, i.e., the time when mainstream production starts to take off. While it is certainly debatable at what point the democratization of 3D capture and production technologies will unlock mass customization and the concept of a “personal factory,” 3D printing and scanning tools are being used productively right now in a wide range of businesses. Of course, I know this since Geomagic is a key player in this space, and our software is used to support many production processes in conjunction with our various 3D scanning and printing partners. It’s not hype; it’s reality. In context, then, for many applications, 3D scanning and printing technologies are already at the Plateau of Productivity.

It’s easy for a research analyst, writer, blogger, industry pundit or other predictor of ominous events to throw cold water on innovation and creativity. But the question remains, how does hype transition to a market- and game-changing shift that impacts the way people live and work?

Belief plays a big part.

No one can predict the future. Sometimes you just have to believe. Yes, the belief should be tempered with a dose of reality, but we should (really) believe nevertheless. The world would be a much more boring place without the dreamers and innovators who regularly reject reality and substitute their own creativity, drive, hope and belief.

History is littered with innovators and innovations that wouldn’t fit neatly into a Hype Cycle curve and wouldn’t give way to the nearsighted individuals and companies blind to the changing world (and unable to adapt, pivot and embrace the change). Innovators and innovations fly in the face of market research, design panels and peer reviews. They believe when no one else does.

Here are a few history tidbits about inventions and innovators who shrugged in the face of doubt:

 “Everything that can be invented has been invented.” – Charles H. Duell, Commissioner, US Patent Office (1889)

  • Yet the pace of change and innovation has only accelerated in recent years.

“A horseless carriage, why in the world would anyone want one of those?”

  • Although drivers traveled trillions of miles by automobile in the US alone in 2011.
  • “Enthusiasm is the yeast that makes your hopes shine to the stars. Enthusiasm is the sparkle in your eyes, the swing in your gait. The grip of your hand, the irresistible surge of will and energy to execute your ideas.” – Henry Ford

“Orville and Wilbur, go back to building bikes; you are stupid.”

  • In 1895 Lord Kelvin added, “Heavier-than-air flying machines are not possible.”
  • Travelers have since flown billions of air miles annually, completely re-shaping economies and driving globalization.

“There is a world market for maybe five computers.” – Thomas J. Watson, IBM Chairman (1943)

  • Intel’s Andy Grove added, “We were exposed to Apple’s early products, and I could not imagine anything except trivial applications for that.” When commenting on the rise of the personal computer, he thought it would only be good for storing recipes, the irony being that the PC would be the biggest consumer product, by far, for Intel. Click here for more information.
  • In the first quarter of 2012, 89 million worldwide PC shipments took place.

“What an incredibly stupid idea. Who is going to want to print things at home?”

  • HP and others are glad they didn’t listen to market pundits who said home printers would never be a big market. Later, considering the turn toward digital information, they predicted doom again. Why would people continue to print things?
  •  Turns out personal printing has continued to grow because, interestingly, even in the digital world, people like to print things, like photographs. I’d say that a couple billion personal printers sold over the years makes the category pretty successful.

“I can’t imagine that the benefits of digital cameras outweigh the benefits and quality of film.”

  • Kodak didn’t react quickly enough to consumer shift from film to digital camera solutions. Accordingly, they missed a huge market opportunity in favor of defending the company’s film consumables and processing business.
  • Kodak declared bankruptcy earlier this year, and the trustees have been selling its deep IP portfolio.
  • Turns out, Kodak actually invented their own nemesis: a digital camera prototype, back in 1975. But even pioneers can make mistakes. Kodak was used to making money on film not cameras. Click here for more information.

“You want to make a thing called an iPhone, what in the hell is that?”

  • What if Apple’s Board said to Steve Jobs, “Sorry, you are nuts, a creative genius, but nuts. No one believes there’s a market for an uncategorizable device that marketed as a phone (but really isn’t a very good one), has a camera, can store music, can run applications, etc. Oh, and by the way, Steve, why is this iPhone thing going to be any better than that turd of a device called the Newton?” Followed by something like, “And you want to over-invest in design and not use the cheapest materials, and you want to roll out an entirely new business model for music, and you are going to convince the music companies that downloads will work for them.”
  • Of course history has proven Steve Jobs right, propelling Apple to the highest market capitalization in the world, and the new iPhone 5 is already projected to be another record-shattering device.
  • Let’s not forget the same can be said for the iPad, but in that case others had (unsuccessfully) done it before.
  • “It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them.” – Steve Jobs (May 1998, BusinessWeek)
  • “Innovation has nothing to do with how many R&D dollars you have. When Apple came up with the Mac, IBM was spending at least 100 times more on R&D. It’s not about money. It’s about the people you have, how you’re led, and how much you get it.” – Steve Jobs (November 1998, Fortune)

“The Wii has the worst graphics ever. It is simply not competitive with the existing gaming systems in the market.”

  • “Nintendo must be looking backward, thinking that history is going to repeat itself, over and over again. Sorry guys, the rest of us are looking for improvement. Hence why the other two 7th generation systems are so visually appealing with improved graphics and HD/Blu-Ray options. Colorful bubbly shaped characters are for little children and cartoons.” – From the www.wiisucks.com website.
  • Yet nearly 97 million Wii consoles have been sold through the middle of 2012.
  • The Wii was ultimately widely successful from its launch in late 2006, in spite of poor graphics, because of the entirely new and fresh way of interacting with games. It turned gaming into a truly social activity that spanned generations.

Sure, there are plenty of failures and examples that fit into a hype cycle. For example, you certainly wouldn’t want to be the Dutch tulip grower who, on April 26, 1637, paid “two wagon loads of wheat, four loads of rye, four fat oxen, eight fat swine, twelve fat sheep, two hogheads of wine, four barrels of beer, two barrels of butter, 1000 pounds of cheese, a marriage bed with lines and a sizeable wagon” for one tulip bulb. Likewise, Betamax, despite being better technically, lost out to the VHS format. But even in the face of failure, I’ll bet the innovators, like the Betamax engineers at Sony, believed up to (and even past) the bitter end. I bet they still believe that theirs was better.

Sometimes explosive growth takes a convergence of technology and market acceptance. Sometimes price changes enable a new class of purchasers. Sometimes it is just blind luck. Sometimes the people promoting change just have to believe and convince others as well.

For those of you who know me, I am a fairly conservative guy in many areas. In a self-assessment I’d say my skill set is more in tune with execution rather than pure innovation.

light-shade-3d-print.pngI do believe, however, that we are at unique place in time, a time in which technology, market acceptance and demand are converging to catalyze change in the 3D capture and 3D printing space, carrying the space down-market from current industrial use cases. In the future, design professionals, students and children will be able to easily take innovation and inspiration from the real articles and objects that surround them, mash them up, and create entirely new designs along with a new creation and innovation cycle. What is needed is a simple-to-use, integrated end-to-end solution that allows people to easily capture, interact with, modify, manipulate and reproduce real-world 3D content. I believe we are not too far away.

(Image: 3D printed lamp shade. Credit: Materialise (http://www.flickr.com/photos/imaterialise/)

I was prroud to work at a company that is focused on this space and powered by a team of passionate, creative individuals. Ultimately, I could be proven wrong in my belief that the democratization of reality-capture technologies, interaction tools and 3D printing devices will shift the market and change our very lifestyles beyond the manufacturing ecosystem that already profitably leverages these technologies.

But even if I’m wrong, I’ll still believe.

You can read a shorter version of this post on the Materialise Blog at: http://i.materialise.com/blog/

[This blog was originally published on October 11th, 2012 – Gartner has subsequently published a revised Hype Cycle curve which separates and differentiates consumer 3D printing from enterprise use of 3D printing]

A renewed call for a harmonized “Community” License for 3D Content.

In a two-part blog in March 2012, I made the argument that a “Community” license type is required for 3D content.

In these blog posts I first gave a little background on applicable intellectual property principles, reviewed how service providers were addressing these issues currently, and then made a proposal for what can and should be done in order to remove at least some of the legal grayness that exists (and that varies substantially from country to country).  I believe that it doesn’t matter which side of the argument you are on (e.g., intellectual property protection is already overbroad versus rights holders who believe more protection is needed), the conclusion is still the same: we have a looming problem.

Since writing those entries the need for a harmonized approach has only grown. The pace at which the capture/create/modify/make ecosystem is changing is only accelerating. New market entrants are pushing the boundaries of content acquisition, while established players are moving down market with new consumer-oriented 3D printers intended for consumer/hobbyist use. Start-up companies are developing new technologies and approaches to round-trip data from the physical to digital and back to physical again. These are exciting times, and while intellectual property questions should certainly not stifle innovation or the pace of change, a framework should be established now for how to address issues that have arisen and will inevitably arise in the future.

In today’s update I review and summarize the terms of service applicable to Autodesk’s 123D Catch and Kraftwurx, and I refresh the reviews I have completed previously. I encourage people to read the prior blog posts in conjunction with this one. One macro-level trend that I did not note previously is that many of the sites restrict the use of downloaded content solely for non-commercial purposes. While on the one hand this might be understandable from the perspective of the site and content owner, from the perspective of the content user, this is perhaps an unexpected “gotcha,” which makes them unwitting copyright infringers if they use downloaded content as part of a commercial endeavor.

Review of Services

123D Catch

For those of who you do not know, 123D Catch is an Autodesk photogrammetry application (consisting of a client application, whether on a desktop, phone or otherwise) and a web service for the creation of 3D models from uploaded photographs. It is the content capture piece of the 123D product family, descriptions of which can be found here: http://www.123dapp.com/create.

The terms of service can be found here: http://sitesupport.123dapp.com/entries/20059427-terms-of-service (last updated July 26th, 2012). Other terms of service are incorporated by reference into this agreement. They can be found here: http://usa.autodesk.com/adsk/servlet/item?siteID=123112&id=17784802.

The site provides for a “Gallery” function where people can upload and share models (see:http://www.123dapp.com/Gallery/) as well as connect to various fabrication services (i.e., currently laser cutting and 3D printing). iMaterialise, Ponoko, and Shapeways, among others, are listed as partners.

The terms of service applicable to 123Dapp.com (the location of the cloud service that provides support for 123D Catch and other Autodesk applications) incorporate a CCL (Creative Commons License) model for content shared amongst users but which differs when defining Autodesk’s rights. Section 3 (“Your Content”) outlines the allocation of IP rights in the service. It generally provides that if you agree to upload content to a public area of the service, you are allowing Autodesk to use that uploaded content for whatever purpose they desire (commercial, non-commercial, or otherwise). See specifically Section 3(b)(i). This section also provides that by uploading the content you warrant that you have all rights to do so.

Section 3(b)(ii) outlines the rights granted to other users of the service (and not to Autodesk) and provides that if you upload content to a public area of the site, you have agreed to grant other users of the service the right to re-distribute, re-use, modify, adapt, create derivative works, etc. for non-commercial purposes based on your uploaded publicly shared content in a manner that is consistent with the Creative Commons Attribution Non-Commercial Share Alike License (see: http://creativecommons.org/licenses/by-nc-sa/3.0/).

It’s interesting that Autodesk reserves the right to make commercial use of uploaded “public” content but restricts use to “non-commercial” purposes by other users’ (by incorporation of the CC BY-NC-SA 3.0) license schemes.

Kraftwurx

I apologize for not covering Kraftwurx in my initial run through of various service providers. Kraftwurx positions itself as “the Original community & marketplace for quality custom products, printed in 3D.” Kraftwurx is based in Houston, Texas, and the company’s vision “is to empower consumers for mass customization by 3D printing anything they could imagine.” Kraftwurx describes itself as both a “marketplace and community.”

The Kraftwurx terms can be found here under the heading “Non-Exclusive License”:http://www.kraftwurx.com/nonexclusive-license-agreement as well as here: http://www.kraftwurx.com/terms-of-service defining terms of service.

According to the Terms of Service (ToS), by uploading content to Kraftwurx you agree that it does not violate the intellectual property rights of third parties. Per the Terms of Service, under the heading of “Content,” while Kraftwurx disclaims ownership rights of uploaded content, Kraftwurx claims a broad license grant to uploaded content, without restriction to commercial or non-commercial purposes and in perpetuity.

The allocation of rights in the “Non-Exclusive License” relating to “Designs” is inconsistent with those in the ToS.  Here, under the section titled “Licenses,” Kraftwurx claims a license to publicly display, market, etc. the user-submitted designs for the purposes of creating products, and the user has the right to remove the design at any time (provided that Kraftwurx can continue to use it for marketing or other purposes, just not production). The applicable Royalty Rate can be set by the User (either as a % or a fixed dollar amount)

Under the section titled “Representations” at the very end of the “Non-Exclusive License,” a user must represent among other things that: (a) he/she owns the design or it is in the public domain; (b) no one else claims ownership in the design (knowledge qualified); (c) the design doesn’t infringe on the moral, privacy or other rights of third parties; and (d) Kraftwurx can produce physical representations of the design without infringing on the rights of third parties or requiring permission to do so.

Finally, Kraftwurx has a DMCA (Digital Millennium Copyright Act) notice here –http://www.kraftwurx.com/copyright-a-intellectual-property. Note that the DMCA, or safe harbors, would also apply to 3D printing service providers.

Trimble (was Google) 3D Warehouse

In April 2012 Trimble purchased the SketchUp business from Google – including the 3D Warehouse – along with a curious allocation of rights to content that had already been submitted (with a closing that apparently happened on or about June 1st, 2012).  See: http://www.sketchup.com/intl/en/usernotice.html. Continuing use and access to the 3D Warehouse will now be governed by Trimble’s terms, a preliminary set of which were linked through in the “User Notice” referenced above. However, the link resolves to an old set of Google 3D Warehouse terms (which are unchanged), see: www.sketchup.com/intl/en/3dwh/preview_tos.html.

Ponoko

No material changes noted. As I described before, Ponoko has clearly thought through the implications of IP on the capture or create/modify/make ecosystem with a very clear and explicit licensing scheme.

Thingiverse

No material changes noted. As with Ponoko, Thingiverse uses a range of Creative Commons licenses as part of a drop-down license picker.

There is some current controversy about whether Makerbot is moving to a closed-source model, and people have reviewed the ToS, found them objectionable, and have stated that the terms are recently changed (implying that this is consistent with some broader Makerbot business pivot to a closed-source model).

I can confirm that the ToS have not changed since at least February 12, 2012 (I have a hard copy print out of them).

GrabCAD

No material changes noted. Section 4 of their terms of service still provides that uploaded content may still only be used for “non-commercial” purposes – obviously a significant limitation if the user/contributor is looking to use or submit content as part of a commercial or fee-paying project.

Sculpteo

No material changes noted.

Shapeways

No material changes noted. Shapeways marks the license with the last change date, and this was February 2012.

Cubify (from 3D Systems)

Since the last review, 3D Systems has modified, cleaned up and tweaked the Cubify landing pages. When previously reviewed, Cubify was in the process of launching. The Cubify terms of service can now be foundhttp://cubify.com/info/learn/terms_of_service.aspx.

Substantively the terms are similar as before. Cubify will allow for the download of hosted models under several license types, see Section 6 of the Terms of Service, specifically Sections 5(d), (e), and (f).  These are a “standard royalty free license,” “editorial license only” and “royalty free license with model release.” In Section 6(7) 3D Systems disclaims IP responsibility for uploaded content and content delivered from third-party services and sources.

Section 7 now specifically covers Intellectual Property. Section 7(1) requires that a user only upload content that it owns the rights to (and agrees not to upload content that might be subject to third-party claims). Section 7(2) outlines rights granted to 3D Systems in order to display, market and ultimately produce content that has been uploaded, and it also grants third parties the right to view the content (in order to make a purchase decision, for example). Section 7(3) provides that if a user downloads and uses content from the site, they are SOLEY responsible for any intellectual property and other legal or clearance issues – 3D Systems does not represent that the content hosted has been fully cleared or is moral/legal to produce in the jurisdiction of the person who downloads it.

To be able to become a contributor, a user must become a “Cubify Artist,” see:http://cubify.com/learn/faq.aspx#CubifyArtist.

iMaterialize (from Materialise) 

No material changes noted.

Summary of Approaches

ccl-3dip.png

This blog was originally published on September 24th, 2012.

Congratulations to Exa Corporation – Another Engineering Tech Oriented Company Goes

You may not have noticed in the run up to the 4th of July week, but Exa Corporation went public in late June, signaling again that engineering oriented companies can have a route to the public markets – (NASDAQ:EXA).

The mid-point IPO range was to have been $12/share, but instead Exa Corporation went public at $10/share.  Exa’s FY12 revenues were $45.9M, of which $38.7M was generated from license revenue.  Exa is trading roughly at $10/share as of this blog post, and that equates to roughly 2.8x TTMR (Trailing Twelve Month Revenues).  As of April 30th, 2012, Exa had 203 employees.  Exa was venture backed (FMR LLC, Boston Capital Ventures and InfoTech Fund I LLC).

Exa is based in Burlington, MA and provides software products and services for “simulation-driven” design.  Exa markets a suite of fluid flow, heat transfer and acoustic simulation solutions used to optimize the performance of products.   Exa works to drive simulation earlier into the design process so that engineers can more accurately predict product performance – reducing later stage design changes.

tom_1.jpg

Exa’s business model is subscription oriented (like most analysis and simulation companies) and interesting indeed.   Exa sells usage of their PowerFLOW simulation suite on an “annual capacity-based model.”  Simulation capacity can purchased to be run on the user’s own computers or it can be purchased as a SaaS application called “PowerFLOW OnDemand.”  PowerFLOW OnDemand is run out of a data center owned by IBM and located in New Jersey.  Their model is very sticky.  In 2011 their license renewal rate was 91%, and in 2012 it was 97%.

tom_2.jpg

Exa has not moved much from its IPO price.  They are most certainly suffering from the general post-Facebook fall out, but the market is also likely discounting them because while they have a great recurring revenue model, most of that revenue is concentrated within the automotive industry (which they describe as the “ground transportation market”).   Exa also disclosed that they may be subject to license payments to MIT for the use of certain patented technologies.

While Exa has a ways to go (and grow) before it is trading at a multiple close to a peer group competitor like Ansys  – it is still great to see other tech companies joining the manufacturing tech renaissance we are currently in.  For examples, see Protolabs’ recent IPO (which I blogged about here:http://www.geomagic.com/en/community/beyond-the-box/proto-labs-sets-range-for-ipo-manufacturing-is-exciting/) , the Stratasys/Objet planned merger and 3D System’s recent $107M raise via a secondary (see here: http://www.3dsystems.com/press-releases/3d-systems-announces-exercise-over-allotment-option-public-offering-common-stock)

Exa’s final updated and amended S-1 can be found here, it is a good read:http://edgar.sec.gov/Archives/edgar/data/890264/000119312512273272/d214313ds1a.htm

This blog was originally published on July 18th, 2012.

The $40 (or $20) million helmet. Or not.

A Refresher

As I’ve blogged about previously, copyright protects a wide variety of items – regardless of whether 2D or 3D, so long as that content is not “functional” or “utilitarian”, and is original.  Ideas are not protectable, but the expression of ideas generally are.  In case you missed that blog entry (and you will want to read before continuing), see: http://www.geomagic.com/en/community/beyond-the-box/the-tale-of-two-spoons-and-copyright-law/

Back to Our Very Expensive Helmet

Picture from http://www.bbc.co.uk/news/uk-12910683

Andrew Ainsworth thought that he was doing nothing wrong. In 2002 he started selling helmets and body pieces from Stormtrooper uniforms to help cover schooling costs.  He had previously done work for Lucasfilm and helped to create the original Stormtrooper costumes for the Star Wars film.  He had been asked by George Lucas at Elstree Studios to make a prototype based on original drawings from Ralph McQuarry.  After two days and a prototype Lucas allegedly ordered 50.  When a helmet and a few other pieces pulled in nearly $100,000 for a sale at Christie’s he knew he was on to something.  He dug out the old molds and started selling them.  After roughly 20 had been sold in the United States, someone else noticed – namely Lucasfilm.

Lucasfilm sued Shepperton Design Studios Limited, and Andrew Ainsworth, in the United States District Court for the Central District of California on May 6th 2005.  The complaint alleged that Mr. Ainsworth had violated Lucasfilm’s copyrights in their Stormtrooper and TIE fighter pilot characters as well as Lucasfilm’s “Imperial” logo trademark.

Plaintiff alleges that Defendants copies Plaintiff’s copyrighted artwork and Plaintiff’s fanciful characters in Plaintiff’s 1977 Star Wars Film, that Defendants prepared three-dimensional copies of Plaintiff’s depictions, that Defendants publicly distributed those copies and that Defendants also publicly display them on Defendants’ website, all without Plaintiff’s consent.

In September 20th 2006 the United States District Court granted a default judgment to Lucasfilm and awarded in excess of $40 million1 in damages (for $5M for copyright, $37.5M for trademark infringement as well as an award of attorney’s fees).  But there was more than a little problem.  Because Mr. Ainsworth had no assets in the United States, Lucasfilm had to take their judgment to the UK courts for enforcement.

Across the Pond We Go

Lucasfilm wanted to enforce the award in the UK, and so it went to enforce its judgment.  Seems simple right?   Lucasfilm owned a valid copyright in the artistic/sculptural StormTrooper uniforms, Ainsworth violated it by creating copies or derivative works, and he was not authorized to do so.   Open and shut case, right?

Wrong.

Something strange happened in the U.K. courts.

First, lower courts held that Lucasfilm couldn’t enforce the California judgment. They also found that uniforms and helmets were not protectable by copyright because they were not sculptures — and even though they were copies Ainsworth had other defenses – all of Lucasfilm’s claims in the U.K. courts were dismissed.

Then the U.K. Supreme Court took up consideration of the case and handed down a fairly surprising ruling.  On July 27th, 2011 they upheld the lower court rulings that the Stormtrooper uniforms were not in fact artistic or sculptural elements protectable by copyright, but instead, they were utilitarian and functional objects because they were a necessary element of the film that was being produced.  They were a “mixture of costume and prop.” As a result, they were not protectable by copyright.  They did this while also resolving an outstanding controversy of whether U.K. courts could decide if non-U.K. copyrights had been infringed.

My Personal View

The U.K. Supreme Court got it wrong.  While you can’t help to personally feel for Mr. Ainsworth in his battle with Lucasfilm, the logic is twisted in achieving their desired result.  For the U.K. Supreme Court’s analysis on why the uniform and helmet were not “sculptures” under U.K. law, see the discussion starting at Section 28 in the Court’s opinion.  Much of the discussion and focus is to the particular production methods used to make the helmet and uniform rather than what is really at the heart of the matter – is it artistic or creative however created?  Read it and form your own opinion.

Lucasfilm issued a statement after the U.K. Supreme Court ruling stating in part that the ruling “maintains an anomaly of British copyright law under which the creative and highly artistic works made for use in films – which are protected by the copyright laws of virtually every other country in the world – may not be entitled to copyright protection in the U.K.”  I agree.

The Implications Are Strange

Disagreeing with the U.K. Supreme Court’s conclusion doesn’t take away from the fact that it is valid law in the U.K.

If the frame of reference is a fantasy or virtual world, or a movie, or even perhaps a play, props are absolutely functional – they are required to produce or deliver the creative work.  In that context, a Stormtrooper helmet is “functional.”  Outside of that frame of reference (i.e. the real world we live in) individual elements appear to be distinctive, creative works in their own right.  Outside of the Star Wars film universe – who can really deny or argue that the uniforms and helmets were creative and therefore protectable?

How would the U.K. courts ruled if the helmets and uniforms in question had not been used in a movie? Quite differently I suppose.

So there we have it.  The same Stormtrooper uniform. The same helmets.  Completely different conclusions.  A United States court finds that they are protectable by copyright and awards millions in dollars of damages. The U.K. Supreme Court finds that they are not protectable by copyright.  Uh oh.

What is truly interesting is to consider how this ruling will apply to objects which might be reproducible by 3D printers – particularly as it relates to elements used in films or live stage productions.  For example, the “cube” in the Super8 film might be viewed as content protectable by copyright in the United States but in the UK viewed as utilitarian (because a necessary element of the film it was used in).

For more information, see the following:

Default Judgment of the United States District Court in the Central District of California in the matter of Lucasfilm Ltd. V. Shepperton Design Studios Limited and Andrew Ainsworth

http://www.supremecourt.gov.uk/docs/UKSC_2010_0015_Judgment.pdf (the U.K. Supreme Court Judgment in Lucas Films Limited and others (Appellants) v. Ainsworth and another (Respondents) – all forty glorious pages of it!

1 It is worth noting that in various press articles, as well as the UK opinions, that the damage award under the Default Judgment was $20 million. This is incorrect.  On the Lahnam Act (trademark) claims the court awarded $2.5 million in license fees and $10 million for damage to reputation and goodwill and then tripled those damages.  This would result in $37.5 million for the Lanham Act claims alone.

This blog was originally published on May 24th, 2012.

“Grand Challenges” in 3D

I am fascinated about the profound changes impacting the create/modify/make ecosystem. In a prior blog I outlined some these profound shifts ultimately resulting in a true democratization of 3D and technologies.

See – http://www.geomagic.com/en/community/beyond-the-box/the-storm-clouds-on-the-horizon/. In many ways Geomagic technology fits squarely at the intersection between the democratization of these technologies.

Yesterday [this blog was originally published on April 16th, 2012], Thomas Kalil, the Deputy Director for Policy, the White House Office of Science and Technology Policy, gave a speech and presentation outlining the historical context of “Grand Challenges”.  You can find the “Grand Challenges” microsite here  – http://www.whitehouse.gov/blog/2012/04/12/grand-challenges-and-what-if#gov20 – it is absolutely worthwhile to watch his presentation, or at the very least read through the text and skim the slides which are linked through here.

In this speech Mr. Kalil first gives historical context for how prizes (public and private sector) have long spurred innovation, what the attributes are and what benefits result from “grand challenges” when properly run.

In the second part of his speech, he highlights various “what if. . .?” scenarios.   These cross many industries and needs, but I found two particularly interesting, where he asks what if:

We reduce the time required to design, build and test manufactured products by a factor of 5, while dramatically increasing the number of product designers and entrepreneurs who make things?

We put the tools to design and make just about anything (e.g. 3-D printers, TechShops, Maker Sheds, FabLabs) at the fingertips of every child?

These two questions are of course interrelated and thought provoking.

Enabling and empowering a generation of “makers” will serve to spur the creative juices of an entire new crop of product designers who know how to, and what to, make “things.”  Getting 3D capture, modeling and manufacturing technologies into the hands of students will unleash the next generation of entrepreneurs and demonstrate, in a very tangible way, that education in STEM (science, technology, engineering and math) subjects is not only interesting, but incredibly fun as well.   Letting students “feel” their digital models, through haptic touch enabled devices, and then letting them “print” actual physical representations of those creations will unlock imaginations and unleash creativity.

We are in very exciting times – I can’t wait to see what my 9 and 10 year olds will design and produce next!

The call for a harmonized “Community” License for 3D Content – Part II

Ponoko, Cubify, 3DWarehouse, oh my!

Let’s start first by reviewing one of the older services available to host 3D content and see how they address the issue. I am assuming for purposes of this review that all of the terms of service are in fact enforceable (which might be a big assumption!).

Google 3D Warehouse

Google has been publicly hosting and re-distributing 3D content (primarily in their .SKP file format) for a long time by Internet standards, since at least 2006.   Have you ever thought to read the Google terms applicable to the 3DWarehouse service?  If not, you can find them at:http://sketchup.google.com/intl/en/3dwh/tos.html.

Under Section 5.7.3, you agree not to upload any content which violates the IP of a third party.  That part is not necessarily surprising.  Google wants you (as the user) to be responsible for the content you post.

What might be surprising is that if you do decide to upload content to the service that under Section 11.1(b) you grant Google “the perpetual, sublicensable, irrevocable, worldwide, royalty-free, and non-exclusive license to reproduce, adapt, modify, translate, publish, publicly perform, publicly display and distribute any [c]ontent or derivative works thereof which you submit, post or display on or through, the [s]ervices.”  This license grant is of the typical type associated with works protected by copyright (but not necessarily other IP types). By virtue of Section 11.2, you grant Google the right to extend this right to other companies or organizations which use the services, and under Section 11.1(c), you grant these rights to other users of the services.   Under Section 11.6 you warrant that you have the right to grant the licenses in this section.

While you are not restricted from providing the content you upload to the service to others under different terms (see Section 11.3(a)) even if you remove the content from the service and terminate your relationship with Google, the license granted in Section 11 continues.

OK, as a practical matter, what does this mean?

It means that once you upload content, you have granted virtually an unlimited right for Google, and third parties, to distribute your work, as well as to create derivative works, without any clear attribution rights back to you.  Google does not provide a selective licensing mechanism to allow people who upload content to pick how much (or how little) of their rights they want to grant or extend to downstream users.  If it turns out that you uploaded something that you didn’t own the rights to, by operation of Section 5.7.3 and 11.6 you could be found to be in breach of contract with Google (as well as subject to an independent infringement action from the actual rights holder).

Ponoko

Ponoko has clearly thought through the implications of IP on the capture or create/modify/make ecosystem.  They walk contributors through a list of Creative Commons license types (for an example see herehttp://www.ponoko.com/make-and-sell/sell-eps) depending on how the user chooses to sell products or product plans.  The Ponoko terms of use can be found here – http://www.ponoko.com/about/terms-and-conditions and a statement on intellectual property here http://www.ponoko.com/about/copyright.

Unlike the Google approach, Ponoko makes it clear that they do not obtain any underlying rights to objects which are uploaded to their service other than a right to display them to market the objects for sale.  Even this right expires six (6) months after the item has first been uploaded.

Thingiverse

Thingiverse  is the community hosting site for 3D printable content run by Makerbot Industries.  The terms of service can be found here – http://www.thingiverse.com/legal.   Thingiverse follows the same general scheme as Ponoko.  In addition to the limited right granted to Thingiverse necessary to incorporate contributed content into the site and services (found in Section 3.2), the contributor is asked to select which Creative Commons license type they want to share their content under, see Section 3.3.  Thingiverse’s DMCA take-down notice can be found here – http://www.thingiverse.com/legal/ip-policy.

GrabCAD

GrabCAD bills itself as a community site offering 3D models for mechanical engineers (and roughly 29K models in early March 2012).  GrabCAD’s terms of service can be found here: http://grabcad.com/terms.

GrabCAD generally follows the Google model, and places the burden on IP clearance issues and concerns with the content contributor, see Section 2 “Responsibility of Contributors.”  GrabCAD does include a DMCA notice as well at Section 7.

Shapeways

Shapeways provides a shop to print existing uploaded 3D content, a pathway for “advanced” users to upload their own models for production, as well as a pathway for “Easy Creators” which allows for the simplified personalization of stock content (suck as cuff links, customized sake set, etc.), see:http://www.shapeways.com/creator/.

Shapeways’ terms and conditions, last updated in February 2012, can be found here –http://www.shapeways.com/terms_and_conditions.  See the subsections titled “user generated content” and “intellectual property rights in the 3D design”.  Except for 3D Designs, if you upload content to the Shapeways site you grant Shapeways a royalty-free right to use, including create derivative works, based on the uploaded content.  By uploading it, the contributor represents that the content does not infringe any other IP rights. This is consistent with the Google approach.

With respect to uploaded 3D designs, the contributor grants Shapeways the limited right to use the design to manufacture the model to fulfill legitimate orders as well as to display it on the website.  It is possible to change the rights allocation so that the model is only displayed on the website (but cannot be produced).  Shapeways approach to uploaded 3D designs is similar to that of Ponoko.

Cubify (from 3D Systems)

Cubify is in the process of launching – they don’t expect to launch until later in 2012.  Their current terms of service can be found http://cubify.com/info/service.aspx and http://cubify.com/learn/faq.aspx#BuyersLicense.

Cubify will allow for the download of hosted models under several license types, see Section 5 of the Terms of Service, specifically Sections 5(d), (e), and (f).  These are a “standard royalty free license”, and “editorial license only” and “royalty free license with model release.”  To be able to become a contributor, a user must become a “Cubify Artist”, see: http://cubify.com/learn/faq.aspx#CubifyArtist.

iMaterialize (from Materialise) 

iMaterialize is the service run by Materialise with the primary focus of providing a location for designers (mostly well known, rather than community developed) to host unique, 3D printable objects.  The models themselves are not downloadable so that derivative works can be made from them.  The FAQ is here: http://imaterialize.com/faqand the legal terms are found here: http://i.materialise.com/legal/terms.  Whether this site develops over time to be more like Ponoko or Thingiverse remains to be seen.

The FAQ, in refreshing non-legalese, states that: “The person who placed the initial order is considered the owner of the model and has the IP rights for that model. By accepting the vendor terms and conditions, you give i.materialise the right to produce copies of the model in return for a designer’s fee. Normally, the owner is also the designer. That is why we call it a designer’s fee. If you didn’t design the model yourself, but want a special designer’s page for the person who did, please contact us for permission to set up a designer page for this designer.”

The iMaterialize website has a very clean UI in order for a designer to set-up a virtual shop, see:http://i.materialise.com/blog/entry/how-to-open-your-own-shop-at-i-materialise.

Summary of Approaches

Service License Type Other notable
Google 3Dwarehouse Unique Might be surprising to learn that once uploaded you grant Google a right to share and even commercialize with others.
Ponoko CCL Elegant drop down license “picker” as part of upload process.
Cubify Unique New site and service, full terms likely under development.  Unclear why 3D Systems did not gravitate towards the CCL scheme rather than developing their own nomenclature.
Shapeways Unique Shapeways, in its terms and conditions, makes explicit distinctions between user uploaded content which is a 3D model versus that which is not.
GrabCAD Unique Contributed content is intended for “non-commercial” use unless otherwise specified by the contributor.  Unclear specifically then what an engineer who downloads content is allowed to do with it.   See Section 4.
Thingiverse CCL Thingiverse expressly states that they will share the CCL selected by the contributor with other sites, but that they are not responsible of that secondary site or service fails to adhere to those terms, see the last sentence of Section 3.2
iMaterialise Unique Not a hosting and community site per se.  Intended to provide a commercialization avenue for unique creations from designers.  Very interesting material selector pages –http://imaterialize.com/materials/compare.  Geared towards creating a physical model, not facilitating the sharing and modification of models for downstream uses.

Various Approaches and Interests

As you can see from our view from the trenches, vendors are approaching IP concerns in the create-capture/modify/make ecosystem differently.

This is an area that the folks at Creative Commons are clearly watching (the folks behind the CCL), see the post titled “CC and 3D Printing Community.”  http://creativecommons.org/weblog/entry/30605.

The challenge with the current CC licensing schemes is that they were never intended to cover functional content (that which might be covered by IP rights other than copyright).    As the blog above notes –

With the exception of CC0, the Creative Commons licenses are only for granting permissions to use non-software works. The worlds of software and engineering have additional concerns outside of the scope of what is addressed by the CC licenses. 3D printing is a new medium which encompasses both the creative domains of culture and engineering, and often 3D printed works do not fall neatly into either category.

So what does this mean?  Well, basically, that despite best intentions, services that have tried to create a structured approach to IP issues in the 3D printing community by relying on the CCL scheme have done so prematurely.  Creative Commons does not apparently believe that the CCL scheme, as currently drafted, “works” here.  Uh oh and oh no.

What is Needed?

An integrated, harmonized approach to dealing with all IP considerations in the create-capture/modify/make ecosystem is required.

This is a topic which is already being actively examined for remedy in the CCL 4.0 release cycle.http://wiki.creativecommons.org/4.0/Games_3d_printing_and_functional_content.  Far beyond me (as there are domain and policy experts considering the interplay of these various schemes) to make a specific, actionable, proposal – other than to highlight that one is in fact desperately needed.  One that the current stakeholders can work together to formulate and adopt from a policy perspective – and then implement as close to uniformly as possible in their offerings.

The answer may come in the form of a new CCL type (but as the above discussion highlights, there are some distinct incompatibilities between the CCL scheme entirely and combined functional and creative works).  The answer may also come in the form of a new rights scheme applicable broadly to this type of content.   What should not acceptable to anyone is where we currently are – a distinct, explicit shade of grey.

This blog was originally posted on March 22nd, 2012.

The call for a harmonized “Community” License for 3D Content – Part I

It doesn’t matter whether you believe that the current boundaries of intellectual property protection do not go far enough to protect the rights of content creators or if you believe that copyrights, patents and other forms of intellectual property protection have been stretched well beyond their intended scope – the conclusion still remains – “Houston, we have a problem.”

You might believe that this is an area that has already been entirely thought through – in particular because of the very popular use of the Google 3D Warehouse.   For those of you who may not be aware, Google launched the 3D Warehouse in the 2006 timeframe as a repository for content generated by their Google SketchUp product (which they had just recently acquired from the folks @Last).  It’s my belief that they did this as a natural way to generate and populate content to their Google Earth service (because models created in Google SketchUp can be easily geo-located within Google Earth).

But, You would be wrong if you thought there was uniformity.

A Review of Approachescclogo400.jpg

Services in the ‘capture-create, modify, make’ ecosystem which host, and/or produce physical deliverables, deal with the thorny issue of intellectual property in two main ways.  Some place the burden entirely on the content contributor (e.g. the person who uploads the model).  Others have a framework leveraging various flavors of the existing Creative Commons licensing scheme (www.creativecommons.org).   For the reasons that I will outline below, I believe both of these approaches are flawed – despite best intentions – and what we really need to move to is a harmonized “Community” style license addressing all branches of IP, from copyright, to patent, to moral rights and beyond.

A (Little) Background

These issues are not new.  While “new” in the context of the ‘capture-create, modify, make’ ecosystem, the question of how to appropriately share, attribute and re-use content has been around for a while and various ideas and themes have been developed.  Ideas and implementations run the spectrum from expressly granting works and ideas to the “public domain” (i.e. so the original author or inventor has no further downstream ability to control access or usage) to schemes that keep the title to any underlying work or invention with the original IP rights holder but which authorize a limited or expansive set of downstream rights.

Most of the previous efforts, however, have focused exclusively on copyright concepts.  This should not be surprising, because many of these initiatives sprang out of the software industry, and at the time (in late 1970s and 1980s) no one would have really thought that patent law could have been extended to cover software inventions.

Concepts (and there are more) include:

  • Grant to the Public Domain – An individual can expressly release all IP rights in a work, invention or other creation.  Normally this relates to the release of copyright.  Once done, however, that individual cannot restrict how those materials can be used, modified, or re-distributed, in the future.   As a result, copyleft concepts have been developing over time.
  • Copyleft  — This is a concept which allows for copyrighted works (software, photographs, other creative works) to be modified and freely distributed so long as the downstream work carries the same permissions.  Software copyleft licenses require that downstream recipients receive everything necessary to modify and compile the work.  Copyleft licenses, however, come in various “’strengths” depending on how many rights are extended (or restricted) to the downstream users.  The General Public License (GPL) is the most well known implementation of copyleft concepts, the Creative Commons License (CCL) (with its “Share Alike” license type) is also frequently used.
  • GNU General Public License (or “GPL”) —  This license was originally written by the GNU Project in order to support he re-distribution of the free GNU Unix-like operating system which the project created.  The GPL is perhaps the most well known “copyleft” license.  The Free Software Foundation sponsors the GNU project.  For more generalized background on the GPL, see: http://www.gnu.org/licenses/ andhttp://en.wikipedia.org/wiki/GNU_General_Public_License.
  • Creative Commons License (or “CCL”) – this was created by the Creative Commons organization in the 2001/2002 timeframe.  These licenses cover works protected by copyright law, but are generally not recommended for use with software.  CCL’s are frequently used with photos and papers.  The organization is currently working on the 4.0 release of these licenses.  The photo sharing and tagging site Flickr, as an example, incorporates CCL license types into its service.  For more generalized background on the CCL types, see: http://creativecommons.org/licenses/ andhttp://en.wikipedia.org/wiki/Creative_Commons_licenses.

The challenge with the above is that these IP schemes are not broad enough to cover the range of potential IP rights associated with 3D models and objects which have been created, captured, modified and made.  Past approaches have been focused on creative, as opposed to functional, works.  Use cases in the 3D printing ecosystem stretch the limitations of these prior initiatives – requiring that new solutions be developed.

This blog was originally published on March 12th, 2012.

Proto Labs Sets Range for IPO – Manufacturing is Exciting

Yesterday [this blog was originally published on February 14th, 2002], our friends at Proto Labs, Inc. set the range for their IPO shares at between $13 – $15, and hope to raise between $56M – $65M based on selling 4.3M shares.  Assuming the mid-point of this range, they would have valuation of roughly $325M (or roughly 3.3x TTMR).  They have applied to be listed on the NYSE under the ticker symbol “PRLB”.

North Bridge (Growth Equity I, L.P) a significant investor and Board member has also indicated an interest to purchase additional shares at the IPO price.  Protomold has grown their revenues from $43.8M in 2009 to $98.9M in 2011, while remaining profitable throughout the period.   They have a substantial return customer rate, where repeat orders from existing customers have historically been around 80% of their revenues.  A majority of their revenues come from the US (74%) with the remainder coming from fifty other countries.  Proto Labs employs more than 500 people worldwide.

For those interested in learning more about their business details, you can find them in their recently amended S-1, which can be found here:http://edgar.sec.gov/Archives/edgar/data/1443669/000119312512054357/0001193125-12-054357-index.htm.

Obviously, it is exciting news to see an American manufacturing company poised to go public.  Manufacturing most certainly is “sexy” and “investible” at the same time.  Geomagic is proud to be one player in the digital ecosystem that helps to capture/modify and make items — but at the end of the day you cannot work in a digital chair, write on a virtual table or drive home in a VR car.  It is also exciting to see a company that is about to go public highlighting the value chain and opportunities around mass-customization.

Protomold, as the name implies, concentrates on the rapid prototyping market — with a complete and fast solution from design to either CNC milling or injection molding, supporting various material types.  Proto Mold, in their S-1, describes their business as: “We are leading online and technology-enabled quick-turn manufacturer of custom parts for prototyping and short-run production. We provide “Real Parts, Really Fast” to product developers worldwide, who are under increasing pressure to bring their finished products to market faster than their competition”.

A image in the Protomold S-1 illustrates their production processes very well:

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This blog was originally published on February 14th, 2012.