3D Printering: Makerbot’s Class Action Suit Dismissed

This time last year, Stratasys, parent company of Makerbot, was implicated in a class action suit. Investors claimed Stratasys violated securities laws, and overstated both the performance of the 5th generation of Makerbot printers and the performance of the company itself. Court docs received by Adafruit have revealed this case has been dismissed with prejudice. Makerbot won this one.

The case presented by Stratasys investors relied on two obvious facts. First, the price of Stratasys shares fell far beyond expectations. Second, the extruder for the 5th generation of Makerbot printers – the ‘Smart Extruder’ – was terrible. No one can reasonably dispute these claims; shares of SYSS fell from $120 in September of 2014 to $30 in September of 2015. With many returns to handle, Makerbot quickly redesigned the Smart Extruder.

Both of these indisputable facts are in stark contrast to statements made by Stratasys and Makerbot at the time. In a press release for the 4th quarter 2013 financial results, Stratasys’ expected sales to grow at least 25% over 2013 and stated it was experiencing “strong sales” of its desktop 3D printer. Concerning the Smart Extruder, Makerbot stated this new feature of the 5th generation Makerbots would make them easy to use, and “define the new standard for quality and reliability.”

The facts of this case are not in dispute – Stratasys did not see the growth they expected in late 2013. The Smart Extruder certainly did not make printers more reliable. These facts, however, are not sufficient to violate securities law.  In a wonderful legal turn of phrase, the judge deciding this case called the statements about the quality of the 5th generation Makerbots consisted of, “non-actionable puffery,” and a ‘statement so vague and such obvious hyperbole than no reasonable investor would rely on them.’

Statements made by Stratasys on their financial performance were also found not to be sufficient to violate securities laws. Stratasys did make several statements about negative performance in late 2014 and 2015, and positive statements made earlier did not have an intent to deceive investors.

This is good news for Makerbot. The claims brought by investors in this case had little merit. The case cannot be appealed, and Stratasys is no longer facing a class action suit. Does this news actually matter? Not really; Makerbot is a dead man walking, and 2016 sales will be at levels not seen since 2010 or 2011.

The consumer 3D printing industry is booming, despite the Makerbot bellwether though.

Sony removes PS3 Linux support; Gets sued for it

On April first Sony rolled out new firmware for the PlayStation 3 that removed the ability to install Linux on the system by blocking a feature called OtherOS. Now a class action lawsuit has been filed against the company for its actions. It doesn’t take an attorney to figure out that they removed features that were a major selling point for the system. As mentioned in our previous article, the ability to use an exploit to access the hardware doesn’t mean that every user installing Linux on the system plans to do so. The suit asserts that users had no opportunity to negotiate the System Software Licensing Agreement which is only presented to a purchase after the sale is made. The lawsuit is availble in PDF from from IGN.

Who knows where this one will end up. The suit seeks an injunction against the removal of the OtherOS feature as well as compensatory damages. No matter what happens, we still think the removal was a bad move on Sony’s part.

[Thanks Shueddue]