Monday, October 8, 2012

3-D printing and patents

I've been writing a lot about 3-D printing lately (because I think it's awesome), and I also recently wrote a post about our nation's patent system (because I think it's broken). Last week, I came across an article from The Economist that brought those two topics together—in a way that might not make me particularly happy.
What could well be the next great technological disruption is fermenting away, out of sight, in small workshops, college labs, garages and basements. Tinkerers with machines that turn binary digits into molecules are pioneering a whole new way of making things—one that could well rewrite the rules of manufacturing in much the same way as the PC trashed the traditional world of computing. 
The machines, called 3D printers, have existed in industry for years. But at a cost of $100,000 to $1m, few individuals could ever afford one. Fortunately, like everything digital, their price has fallen. So much so, industrial 3D printers can now be had for $15,000, and home versions for little more than $1,000 (or half that in kit form). “In many ways, today’s 3D printing community resembles the personal computing community of the early 1990s,” says Michael Weinberg, a staff lawyer at Public Knowledge, an advocacy group in Washington, DC. 
As an expert on intellectual property, Mr Weinberg has produced a white paper that documents the likely course of 3D-printing's development—and how the technology could be affected by patent and copyright law. He is far from sanguine about its prospects. His main fear is that the fledgling technology could have its wings clipped by traditional manufacturers, who will doubtless view it as a threat to their livelihoods, and do all in their powers to nobble it. Because of a 3D printer's ability to make perfect replicas, they will probably try to brand it a piracy machine. 
Manufacturers of famous brands have had to contend with ripoffs since time immemorial. Whole neighborhoods exist in Hongkong, Bangkok and even Tokyo that turn out imitation designer handbags, shoes and watches. China has flooded the world with cheap replacement parts based on designs pirated from the original equipment manufacturers. 
But while the pirates' labour rates and material costs may be far lower, the tools they use to make fakes are essentially the same as those used by the original manufacturers. Equipment costs alone have therefore limited the spread of the counterfeiting industry. But give every sweatshop around the world a cheap 3D printer coupled to a laser scanner, and pirated goods could well proliferate... 
As with any disruptive technology—from the printing press to the photocopier and the personal computer—3D printing is going to upset existing manufacturers, who are bound to see it as a threat to their traditional way of doing business. And as 3D printing proliferates, the incumbents will almost certainly demand protection from upstarts with low cost of entry to their markets. 
Manufacturers are likely to behave much like the record industry did when its own business model—based on selling pricey CD albums that few music fans wanted instead of cheap single tracks they craved—came under attack from file-swapping technology and MP3 software. The manufacturers' most likely recourse will be to embrace copyright, rather than patent, law, because many of their patents will have expired. Patents apply for only 20 years while copyright continues for 70 years after the creator's death.
Oh, boy. I firmly believe that 3-D printing has the potential to transform the way that many industries—particularly those involved in manufacturing—operate in this country, and that it could even help our country to break its long-standing dependence on imported crude oil (if I don't have to ship a product to you, because you can print it yourself at home, then I can pretty much put UPS and FedEx out of business overnight, significantly cutting into the amount of fuel used in this country).

But it won't happen if we don't allow for the elimination of businesses made irrelevant by new technologies. Creative destruction has always been at the core of economic progress in this country (note: "economic progress" does not necessarily mean the same thing as "economic growth", as measured by the circulation of dollars—not all "wealth" is denominated in paper currency), and to the extent that patents impede this economic progress, they must be abolished.

I think we're reaching a very dangerous point in this country when it comes to patents and the way they are used—instead of being used as a tool to protect inventors and small business owners from being ripped off, they're now being used as a cudgel by the largest companies to protect their dominant industry position and create barriers to entry for smaller competitors.

If you doubt this assertion, please refer to this piece in yesterday's New York Times, which notes that Apple and Google this year spent more money on patent lawsuits and patent purchases than they did on research and development for new products. That's a new dynamic (it's the first year that this has been the case), and it's definitely not a positive one for our country.

When we put the interests of big business ahead of the interests of society at large, we put ourselves on a dangerous path toward economic stagnation and irrelevance. Unfortunately, the majority of public policy that has come about in the last decade has done just that—from auto industry bailouts to TARP to overly broad patent law to a whole laundry list of other programs and court rulings, the past decade has been a great one for big business, typically at the expense of the ordinary American.

We need this dynamic to reverse itself, because the nation's economic future is worth more than the income statements of its largest companies. Yes, they are different things.


P.S.- Another interesting dynamic to watch in the 3-D printing space is discussed in this article, which I didn't have the opportunity to address in this post. I don't think that guns are the best use of 3-D printers, but they're clearly drawing a lot of attention for various reasons. Interesting developing issue.

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