Markforged has entered into a Settlement and Patent License Agreement with Continuous Composites, potentially resolving all claims and counterclaims in their IP dispute.
The Settlement agreement is pending approval by the United States District Court for the District of Delaware.
Continuous Composites filed a patent-infringement lawsuit against Markforged in July 2021. Four patents originally asserted against Markforged, comprising a total of nineteen patent claims, were removed from the case in April 2023, leaving four claims from a patent that was added to the case in 2022. Two of the four claims from the remaining patent were tried to a jury in April 2024. On April 11, 2024, the jury found Markforged has infringed on one of the two remaining claims and awarded 17.34 million USD in monetary damages to Continuous Composites. Markforged challenged this verdict, while Continuous Composites asserted claims for additional royalty payments for sales of certain products manufactured and/or sold by Markforged in the United States after December 31, 2023.
Under the terms of the Settlement Agreement, Markforged will make an upfront payment of 18 million USD to Continuous Composites, which is expected to occur in the fourth quarter of fiscal year 2024, and three additional instalment payments thereafter of 1 million USD, 2 million USD and 4 million USD in the fourth quarters of fiscal years 2025, 2026 and 2027, respectively. In consideration of such payments, the Settlement Agreement is said to provide for a dismissal of all claims with prejudice, cross-licenses of the parties’ respective patent portfolios, a mutual release of claims for liabilities arising prior to the effective date of the Settlement Agreement and mutual covenants not to sue. As a condition to the effectiveness of the Settlement Agreement, Markforged also entered into a Security Agreement with Continuous Composites pursuant to which the company granted Continuous Composites a security interest in, among other assets, Markforged’s patent intellectual property rights. The Settlement Agreement acknowledges that neither party admitted to any liability or wrongdoing with respect to the claims alleged in the Continuous Composites Lawsuit.
The Settlement Agreement also requires the parties to file a joint dismissal of the dispute with prejudice with the District Court to dismiss all claims and counterclaims with prejudice. The Settlement Agreement is subject to review by the District Court.
“We are pleased to announce this Settlement Agreement which, if approved by the District Court, will bring this litigation to a successful conclusion that will eliminate this distraction to Markforged and the uncertainty over the outcome of this litigation for all of our stakeholders,” said Shai Terem, President and Chief Executive Officer of Markforged. “With the Settlement Agreement in place and the previously announced $25 million cost reduction initiative implemented, we are committed to advancing our strategic objectives and executing on our strategy to bring industrial 3D printing right to the factory floor.”
