Can 3-D Save Retail? Let's Check In With The Lawyers

Jun 7 2014, 9:18am CDT | by

Move over e-commerce strategies, social media campaigns, same day delivery, Bitcoin payments and all things drone: there is a new disruptive technology in town.

3-D printing.

Sure, the concept has its drawbacks. As low-cost printers come to market, consumers will have the tools to print out their supplies and parts, instead of visiting their local hardware store or big box retailers—and some certainly will. However, the advantages the technology poses for retailers far outweigh these lost sales.

The legal issues that 3-D printing introduces though, now that could be another matter.

From Parts to Jewelry

First, though, let’s look at what retailers are doing with 3-D, or in the case of Wal-Mart, apparently thinking of doing.

Comments Wal-Mart CEO Doug McMillon made at last month’s Code Conference in California caught the attention of analysts in general and the 3-D printing community in particular. The retailer is definitely interested in the technology, and may well make an acquisition in this space. “We can use 3-D printing over time for replacement parts,” he said, according to Bloomberg.

Or consider this: Wal-Mart is reportedly finding it more challenging than expected to fulfill its pledge last year to buy an extra $250 billion in U.S.-made goods over the next decade, according to Reuters. U.S. manufacturing, it seems, has idled in the wake of the wave of offshoring of the last generation and capacity and expertise is not where Wal-Mart needs it to be.

But suppliers can get up to speed awfully fast, harnessing 3-D technology. And the retailer already has a pilot program in place in which it offers 3-D imaging and printing-services programs.

Not to be outdone, Amazon has launched its own pilot program to sell 3-D printed objects on its website. The site offers such products as 3-D printed jewelry, toys, games and home décor.

Then there is Staples, the poster child for brick-and-mortar retailers wounded by e-commerce and struggling to find their new niche in this environment. 3-D printing appears to be one of its strategies and it would be a very smart one if it weren’t so easily replicated. Earlier this year the retailer announced a partnership with 3D Systems to offer 3-D printing services in two Staples stores in New York City and Los Angeles.

Consumers and small businesses use the printing hardware to create personalized products. Fortunately Staples seems to have bigger plans for 3-D then just acting as a glorified Kinkos for the technology.

Damien Leigh, Senior Vice President of Business Services for Staples, said when the pilot was announced that the test “will help us learn about our customers’ needs for a local 3-D printing service, and how Staples can help them make more happen for their business through 3-D printing.

Nor is 3-D printing limited to the largest brands or for that matter, brick-and-mortar stores. E-commerce jeweler Brilliance is using the technology to send–or have customers print out–3-D made plastic rings to try out different shapes and sizes before they shell out hundreds or thousands of dollars for a diamond ring. Indeed the only drawback for Brilliance appears to be that some customers realize that the 2-caret size is not for them after all when they try on the ring and see how ginormous the stone is. This is not a development I would have seen coming—ever–but that is what Shai Barel, director of strategic partnerships for Brilliance, tells CNET.

Although everyone thinks they would want a 2-carat diamond ring, sometimes it would look funny if the person’s fingers are too thin. The same is true with the shape of the ring. A 1-carat round-cut diamond looks bigger than a 1-carat in any other shape. Providing customers with the ability to see and feel what they would like to purchase is golden.

What’s great about these examples, including and most especially Brilliance’s, is that they can be easily applied to any sized retailer or supplier to a retailer. The knowledge base around additive printing grows by the day and as mentioned above, the hardware is dropping in cost.

What is not so great about these examples—what is downright frightening in fact if you are not a Wal-Mart or Amazon with a slew of lawyers on tap–is that there are a number of legal questions around these strategies whose answers are unclear.

A Lawyer’s View

So says Patrick Comerford, who’s leading McCarter & English LLP’s 3D printing/additive manufacturing initiative./>/>

“We are at the point where just about anything you can create on a screen you can also print. The opportunities and possibilities are seemingly endless.”

Unfortunately so is the potential for legal challenge, he adds.

Product liability, just for starters, presents a renewed opportunity for plaintiffs’ counsel.

With assembly lines and manufacturing so advanced now, product defects have become, with a few notable and recent exceptions, largely a thing of the past. “Now most product liability cases are about failure to warn – failure to warn that the coffee is too hot or the blade is too sharp,” Comerford says.

For manufacturers that have strong quality assurance programs, robust internal controls and management with a spine to do the right thing (ahem General Motors), defective products are not likely to get past a company’s front doors.

3-D printing changes this equation, Comerford said. Challenges could range from whether a product was printed the right way and whether the right materials were used.  It also introduces a slew of new participants to target, from the maker of the 3-D printer to the supplier of the materials to the designer of the software and product specs.

Ditto for a service that relies on 3-D printing.

3-D printed drones (yes they have been proposed) that make deliveries of beer to remote fisherman (ibid and to wild general approval) offer a long list of potential targets for a suit if someone is hurt or suffers injury because the delivery failed to materialize.

“It could range from the company that built the drone to the company that manufactured the GPS that was used on the drone to even the beer distributor,” Comerford says.

(This particular example, admittedly, is moot, at least until the Federal Communications Commission offers guidelines for the use of drones in commercial operations, which according to Slashgear could happen fairly soon.)

In the case of an individual that uses a 3-D printing service like the kind Staples is offering to print out, say, a car part, the question of who will be sued is fairly easy to answer if the car is involved in an accident: whoever has the deepest pockets, which is probably the service provider but could be the car owner too.

Don’t expect Congress to step in, Comerford  added–these scenarios are so varied they are almost impossible to address in legislation, especially when the inevitable intellectual property clashes over the specs and designs and counterfeit products is added to the mix.

“Who is liable will be decided in the courts.”

Suddenly a call to that 3-D printed, drone-delivering beer service seems less appealing.

 
 

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