Markforged Sues Desktop Metal Over “Dirty Tricks” in 3D Printing War

 
Markforged Sues Desktop Metal Over “Dirty Tricks” in 3D Printing War | DeviceDaily.com
 

Markforged is reviving its courtroom battle with 3D printing rival Desktop Metal with a lawsuit that alleges “a campaign of dirty tricks” by the competitor that violates a 2018 deal the two agreed to when they last were bringing each other to court.

Markforged, based in Watertown, MA, says in the lawsuit filed Tuesday in US District Court in Boston that Burlington, MA-headquartered Desktop Metal sent around a “battle card” of marketing materials to more than one hundred of its resellers. The materials claim to make a side-by-side comparison of Markforged’s Metal X printer with Desktop Metal’s Studio System printer, according to the lawsuit.

Markforged says Desktop Metal’s marketing document is littered with falsehoods about its printers. The purported lies violate a non-disparagement clause in an October 2018 settlement between the companies, Markforged writes in the lawsuit.

This is far from the beginning of the companies’ courtroom saga. Not long after Greg Mark founded Markforged in 2013, Ric Fulop, then a venture capitalist at North Bridge Venture Partners, joined the company as a director—a post that gave him open access to the company’s business and product plans, the new lawsuit notes. Fast forward two years, and Fulop incorporated Desktop Metal, a metal 3D-printing company. Then in 2017, Markforged launched its metal 3D printer, Metal X. The company’s product lineup had previously included 3D printers making parts with composites reinforced with carbon fiber, fiberglass, and other materials.

In 2017, Fulop’s Desktop Metal sued Markforged for patent infringement, but a jury didn’t buy the claims. Markforged levied counterclaims against Desktop Metal for breach of fiduciary duty, misappropriation of trade secrets, and unfair trade practices. The companies settled those counterclaims in October 2018 in an agreement that forms the legal basis for this latest lawsuit by Markforged with a non-disparagement clause that calls for $100,000 in damages for each violation.

“Notwithstanding the non-disparagement prohibitions in the settlement agreement, Desktop Metal has unleashed yet another scheme to kill Markforged—using dirty tricks against Markforged,” the company writes in its lawsuit filed Tuesday.

“Fulop and his colleagues have acted like proverbial schoolyard bullies, engaging in a persistent pattern of unfair and deceptive conduct, culminating most recently in their dissemination of flagrant falsehoods about Markforged’s 3D printers and products,” the company adds.

Desktop Metal says in an emailed statement that Markforged’s claims are “without merit” and it plans to defend itself “in the appropriate forum.”

Markforged says it believes there were at least 150 occurrences of false claims in the “battle cards” sent to Desktop Metal resellers that Markforged claims violate the non-disparagement agreement. The allegedly false claims include the need for a ventilation hood for the printer as well as various cost and part-size comparisons.

In an emailed statement about the lawsuit, Markforged says, “Desktop Metal has chosen to compete by spreading false information. Markforged is taking this necessary step to ensure customers are making their buying decisions on facts, not lies.”

Both companies raised significant amounts of new capital this year. In January, Desktop Metal closed a $160 million Series E funding round led by the venture technology arm of Koch Industries, pushing its total venture haul to $438 million since 2017. In March, Markforged took in $82 million in a Series D funding round led by Boston-based Summit Partners, making its total raised $137 million since 2013.

Brian Dowling is a Senior Editor at Xconomy, based in Boston. You can reach him at bdowling [at] xconomy.com. Follow @be_d

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