Categories: Innovate

Jabil sues former workers, competitor over 3D printing secrets

Jabil Inc., the largest company in St. Petersburg and an electronics manufacturing powerhouse, has invested millions of dollars and thousands of engineering hours into developing a faster 3D printer.

A competitor who hired three four Jabil employees conspired with those workers to steal highly confidential designs, vendor relationships and trade secrets, and used them to replicate Jabil’s 3D printing product, Jabil said in a lawsuit.

The complaint, filed June 28 in federal court in Tampa, tells Jabil’s version of the story about how the competitor, Essentium Inc., developed what Jabil said is a knock-off version of its own printer. Jabil is suing Essentium, the former workers and a contractor, and is asking for a jury trial and damages.

Steve Birdwell, Essentium’s chairman, said in a statement that the action is entirely without merit and the company is responding to it aggressively. “Our corporate values are based around trust, service, transparency, and innovation. We have never detracted from these values,” Birdwell’s statement said.

3D printing – technically referred to as additive manufacturing – is set for explosive growth over the next several years, rising from being a $5.8 billion industry in 2016 to an expected $55.8 billion by 2027, Jabil (NYSE: JBL) said on its website, citing a report from Smithers Pira.

Jabil has used 3D printing for a variety of products, including parts for the race car driven by the Renault F1 team.

Closer look: How 3d printing works

Additive manufacturing, colloquially known as 3D printing, involves “printing” a three-dimensional object, and there are several ways to do that.

One of them, fused filament fabrication (FFFF), is described in the Jabil lawsuit.

FFF printers feed material in the form of a thread-like filament through a heated extruder, which melts and deposits the material onto a horizontal platform. As the extruder moves back and forth, the printer deposits the material in a pattern that forms one layer of an object. As the extruder moves up and down, the printer can fuse multiple layers together to fabricate a three-dimensional object.

Jabil decided to focus on 3D printing in late 2014, developing its own fused filament fabrication printer with technology that would substantially overcome some of the traditional challenges in 3D printing, such as the right amount of heat to use, the correct speed and motion control. Jabil hired three new employees to get to project off the ground: Erik Gjovik, Greg Ojeda and William “Terry” MacNeish. Each signed confidentiality documents.

Ultimately, the team developed a new 3D printer that was 10 times faster than the next-fastest commercially available printer. Jabil named it “TenX.”

The three men left Jabil in the fall of 2017 and went to work for Essentium Materials, which the lawsuit described as “a filament company without a commercially viable FFF printer.” Several other former members of Jabil’s 3D printing team followed suit, the lawsuit said. In January 2018, Gjovik, Ojeda, MacNeish and Lars Uffhausen, a Jabil contractor, along with other Essentium Materials executives, incorporated a new company, Essentium Inc.

In April 2018, “far sooner than would have been possible through its own legitimate efforts,” Essentium unveiled its High Speed Extrusion printing platform.

“In all material respects, Essentium’s HSE printer is a ‘knock-off’ of an earlier version of Jabil’s TenX with only relatively minor alterations,” the lawsuit said. Essentium also “brazenly and repeatedly alludes to its theft of Jabil’s TenX” on its website, according to the lawsuit, which cites phrases such as “at up to 10x faster than the competition.”

Essentium marketed its platform to the general public before Jabil unveiled TenX. While Jabil has improved the TenX since the three former workers left, Essentium’s “inferior product” interfered with Jabil’s ability to monetize the TenX program and risked damaging Jabil’s reputation, the lawsuit said.

The lawsuit lists 10 counts including misappropriation of trade secrets, breach of contract and deceptive and unfair trade practices.

U.S. District Judge Steve Merryday in Tampa has ordered both sides to meet to prepare a joint case management report in the next 45 days and to agree to a discovery deadline in the next eight months.

In his statement, Birdwell, the Essentium chairman, said his company has been disrupting traditional manufacturing processes. “Together with our customers, partners, and our own supply chain, we are transforming the future of industrial-scale manufacturing. Together we are breaking down barriers of scale, strength, and economics in additive manufacturing.  Nothing will distract us from this work,” Birdwell said.

Essentium raised $22 million in venture capital and moved its headquarters to suburban Austin, Texas earlier this year in return for local government grants for new jobs created, the Austin America-Statesman reported.

NOTE: Essentium provided a comment after the original publication of this story.  It has been updated to include that comment.

Margie Manning

Margie started her journalism career as a radio news reporter in St. Louis, before putting down her microphone and picking up a pen to work at the St. Louis Business Journal. Unable to resist the call of warm weather and beaches, Margie took an entrepreneurial detour to run an ice cream shop in Treasure Island with her husband. Before joining the Catalyst, Margie spent 14 years at the Tampa Bay Business Journal where she wrote about business successes, failures and the exciting world of innovation and start-ups. Her writing coaches are Bonnie the Dog and Coffee the Cat.

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