3D Systems vs. Stratasys and Objet

Form 10-Q, published on November 9, 2004 by Stratasys, states that 3D Systems, Inc. filed a lawsuit against Stratasys, Inc. and Objet Geometries Ltd. in the United States District Court for the District of New Jersey. It alleges that certain PolyJet products that Stratasys distributes on behalf of Objet infringe 3D Systems’ patent rights. 3D Systems is seeking unspecified damages and an injunction against the sale of the allegedly infringing products, the 10-Q explains.

The complaint in the action was served on November 2, 2004, and Stratasys is currently evaluating the case. Upon preliminary review of the complaint, Stratasys believes that the action is without merit and intents to vigorously defend it, the 10-Q states. Under the North American Distributor Agreement with Objet, the company is obligated to defend the action on Stratasys’ behalf and to indemnify Stratasys against any damages arising from the action. The 10-Q goes on to say that Stratasys expects to participate in the defense at its own expense as permitted by the Distributor Agreement.

The timing of this lawsuit is interesting. Earlier this year, 3D Systems had settled all worldwide disputes and litigation with EOS GmbH of Germany. Subsequently, 3D had announced settlements with Regent Pacific Management Corp. and Hitachi Zosen, as well as a dismissal of the Aaroflex litigation. It appeared as though the company was finally ending its string of lawsuits and expensive litigation. See the August 2003 commentary titled Eight Lawsuits between 3D and EOS, the January 2004 commentary titled Chief Executive is Good for 3D Systems, and the February 2004 commentary titled A Milestone for the Industry. The September 2003 commentary titled Stratasys and Objet get Cozy may also provide some useful background information.

It’s anyone’s guess as to how much cash 3D Systems and Stratasys will burn through—money that would otherwise be spent on R&D and market development. History shows that it’s usually many millions of dollars. Stay tuned.

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