History of DuPont Technology/AAROFLEX Patent Position

From: Kaisha (aaroflex@aaroflex.com)
Date: Tue Dec 10 1996 - 23:00:27 EET


At 09:33 AM 12/10/96 -0500, Drew Brown of Conceptual Reality wrote:
>Can anyone enlighten me on the history of the Dupont technology for
>stereolithography and its emergence/existance in respect to 3D Systems
>technology?

The following is text from a recent letter to numerous members of the RP
community from Albert C. Young, Jr., Chairman of AAROFLEX, Inc.

I would like to take this opportunity to ... provide the historical
background and facts concerning the patent estate of AAROFLEX, Inc. related
to the AAROFLEX Solid Imager™. The I.E. du Pont de Nemours and Company
(DuPont) began developing solid imaging materials and the solid modeler,
which they referred to as "Somos" in the late 1980's. During the
development period, the DuPont legal staff reviewed the patent position of
DuPont and confirmed that DuPont was not infringing upon any technology in
the marketplace. DuPont went through eight iterations of machine
improvements until reaching the model acquired by AAROFLEX, after spending
18 million dollars on the development of the machinery, software and
associated photopolymers. Clearly, DuPont wanted to be certain that their
investment was on a solid legal foundation; their due diligence study gave
them this assurance.

During this same time period, the DuPont Company was involved in a great
number of high-tech development ventures which caused the performance of
their publicly-traded stock to drop considerably. The Seagrams Company
purchased 20% of the shares in DuPont and acquired two seats on their Board
of Directors. At the time they acquired the stock, the stock was selling in
the low $30's. Once the two seats were acquired on the Board of Directors,
Seagrams influenced a vote of the Board to eliminate all development
activities outside the DuPont core business -- organic chemistry. For the
Somos division, this mandate meant they could continue to develop resins but
could not further develop the machinery. At that time, they put the solid
imaging equipment technology on the market. The restructuring within DuPont
resulted in a doubling of the DuPont stock value and an eventual buy-out of
Seagrams by DuPont.
 
Teijin Seiki of Japan purchased the "Somos" patent estate for certain Far
East countries, after a due diligence process which included a formal
opinion from a respected Washington, DC patent attorney that the patents
would not be infringing upon any competing technologies.

In 1992, AAROFLEX began to develop a solid modeling system independently of
these events but after learning of the opportunities to purchase existing
equipment and patents, AAROFLEX began to consider acquisition of the DuPont
technology. However, before such a purchase could be accomplished, it was
necessary to conduct our own due diligence. During a literary search,
AAROFLEX duplicated over six thousand pages of documents and had secured
every known publication in the world (with one exception) related to this
technology. We also retained an independent patent attorney to render an
opinion on DuPont's patent position. We chose an industry-experienced,
accomplished legal counsel with a bachelor's and master's degree in
Mechanical Engineering, six years of experience with the United States
Patent and Trademark Office (PTO), and thirty years of experience as a PTO
registered attorney representing clients with patent estates in excess of
$100 million in value. His opinion stated that AAROFLEX would not be
infringing upon any other competitor should we acquire the DuPont
technology. A corroborating supplemental opinion was also rendered by our
in-house legal counsel.

We finalized the DuPont acquisition in August of 1995 and spent nearly a
year incorporating our own developments and enhancing the system and
software. During this time, a team of experienced scientists and
technicians built on the DuPont technology and public information,
endeavoring to take fresh, sometimes even simplistic, approaches to advance
the rapid prototyping technologies, in keeping with our forefathers' vision
of scientific progress as set forth during the establishment of the U.S.
patent system. At the onset of commercialization, with the filing of our
own patent applications and with the knowledge of new industry patent
awards, we again retained the independent PTO attorney to evaluate our
patent position. In August of 1996, he re-confirmed that the DuPont
technology and AAROFLEX system enhancements do not infringe upon that of any
competitor.

In September, our outside legal counsel wrote a letter to a competitor that
we have evidence is responsible for many negative rumors regarding our
patent estate, asking them to cease and desist this rumor-spreading. In
October, an attorney for this competitor responded on their behalf that he
was "quite interested" in these statements but really did not have the
needed facts to respond, in effect, admitting that our competitor is
unfamiliar with our technology and is indeed only trying to beat our
competitive edge with unfair methods.

In summary, separate opinions have been rendered by the legal counsels of
DuPont, Teijin Seiki and AAROFLEX, accounting for over five distinct
evaluations. We will further note that DuPont has not been sued and has not
been threatened to be sued by any rapid prototyping or solid imaging
industry competitor. AAROFLEX also has not received any adverse comments or
letters from any competitor, despite the active "whisper campaign" alleging
patent infringement. These are the facts of the matter and we will support
them wherever necessary.

We sincerely appreciate your time and attention related to these important
issues. Should you have any questions concerning the AAROFLEX technological
advantages or our patent position, please do not hesitate to contact me or
my staff. Further, we would welcome any input or suggestions you may have
as we develop the next generation of rapid prototyping systems. Thank you
for your continued interest in AAROFLEX and your dedication to the rapid
prototyping and manufacturing industry.

Very truly yours,
Albert C. Young, Jr., P.E.
Chairman and CEO



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