Right Tool, Right Job: Smart Manufacturing Requires Focus on Intellectual Property

The transition from traditional manufacturing techniques and technologies to techniques leveraging automation and data exchange technologies, cyber-physical systems, the Internet of things, cloud computing and cognitive computing, sometimes referred to as “Industry 4.0,” holds great promise for manufacturers but, like any change, also holds dangers for the unwary.    

In the same way that the transition of supply chain and manufacturing operations to a digital, interconnected environment requires new tools, or the use of old tools in new ways, the transition to this new digital environment requires manufacturers to be aware of the expansion of intellectual property rights relevant to a manufacturer’s operations.   Failure to carefully monitor and manage intellectual property considerations in this new environment may result in significant risks.

Traditional manufacturing techniques typically rely on shipping raw materials and hardware from one physical location to another and assembling a finished product using stand-alone machines before, again, shipping the finished product to its ultimate destination.  In this environment, it is natural to rely on trade secrets to protect proprietary aspects of the manufacturing process by, for example, limiting personnel access to the production floor and requiring employees and suppliers to enter into non-disclosure agreements because the manufacturing processes are inextricably associated with a specific physical location.

The growth of additive manufacturing techniques is one aspect of Industry 4.0 that has the potential to affect operations across the production chain and broadens the intellectual property issues that a manufacturer must consider.  Additive manufacturing changes the business calculus around lead time, shipping cost, inventory requirements and transport uncertainty because a digital file can be sent nearly instantaneously to a party that is close to a manufacturing site or customer, rather than shipping sub-assemblies or completed products over large distances.  In the same way, however, that additive manufacturing changes the business calculus, it also changes the intellectual property considerations incumbent on a manufacturer.

A recent example of this kind of change is United States Patent No. 10216171, “3-D Printing Protected by Digital Rights Management,” issued February 26, 2019 to Accenture Global Services Limited.  The ‘171 patent purports to cover methods, systems and apparatus, including computer programs encoded on a computer storage medium, for managing 3-D printing.  Independent claim 1 of the ‘171 patent is quite long, prohibiting its verbatim recitation here, but the ‘171 patent is available online from the www.uspto.gov or www.patents.google.com. In broad summary, the ‘171 patent claims a computer-implemented method that associates a digital rights file with a printable object that keeps track of the number of times an object has been printed and only allowing the object to be printed as long as the number of prints is below an allowed threshold.

It is self-evident that ability to control the number of physical items manufactured from a digital file is of vital importance to entities that manufacture replacement parts or subassemblies.  It is also possible that a manufacturer could use such techniques to allow customers to buy a product and 3-D print it themselves, since the file can be used only a certain number of times.  With the issuance of the ‘171 patent, a manufacturer should now consider whether their deployment of a system that limits the number of times a file can be used to create a physical item through additive manufacturing may infringe the claims of the ‘171 patent.  A manufacturer may want to receive an opinion of counsel that their system does not infringe the ‘171 patent, as well as whether the ‘171 patent has, in fact, been validly issued by the United States Patent and Trademark Office.

Invalidity of a patent is also a defense to infringement and that defense can be raised not only in litigation, but in reexamination proceedings before the US Patent Office, as well.   Moreover, manufacturers may want to consider, in view of the issuance of the ‘171 patent, whether they are doing enough to generate intellectual property protecting their own proprietary techniques.

Some may argue that these sorts of considerations are not new to manufacturers.  However, the environment for manufacturers is changing and it may not always be readily apparent when an “old” tool needs to be used in a new situation.  Manufacturers must remain vigilant for opportunities and threats presented by Industry 4.0.