[Federal Register Volume 66, Number 187 (Wednesday, September 26, 2001)]
[Notices]
[Pages 49200-49211]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-23999]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. 3D Systems Corporation and DTM Corporation; 
Proposed Final Judgment and Competitive Impact Statement

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. Section 16(b) through (h), that a proposed 
Final Judgment, Stipulation and Competitive Impact Statement have been 
filed with the United States District Court for the District of 
Columbia in United States of America v. 3D Systems Corporation and DTM 
Corporation, Civil Action No. No. 1:01CV01237. On June 6, 2001, the 
United States filed a Complaint alleging that 3D Systems Corporation's 
proposed acquisition of DTM Corporation would violate Section 7 of the 
Clayton Act, as amended, 15 U.S.C. 18. The proposed Final Judgment, 
filed on August 16, 2001, requires the defendants to license their 
rapid prototyping patents to a company that will compete in the U.S. 
market. Copies of the Complaint, proposed Final Judgment and 
Competitive Impact Statement are available for inspection at the 
Department of Justice in Washington, DC in Room 215, 325 Seventh 
Street, NW., and at the Office of the Clerk of the United States 
District Court for the District of Columbia, 333 Constitution Avenue, 
NW., Washington, DC.
    Public comment is invited within 60 days of the date of this 
notice. Such comments, and responses thereto, will be published in the 
Federal Register and filed with the Court. Comments should be directed 
to J. Robert Kramer II, Chief, Litigation II Section, Antitrust 
Division, Department of Justice, 1401 H Street, NW., Suite 3000, 
Washington, DC, 20530, (telephone: (202) 307-0924).

Mary Jean Moltenbrey,
Director of Civil Nonmerger Enforcement.

In The United States District Court for the District of Columbia

[Civil No: 1.01CV01237 (GK)]

United States of America, Plaintiff, v. 3D Systems Corporation and DTM 
Corporation, Defendants
    Filed: August 16, 2001.

Stipulation and Order

    It is stipulated by and between the undersigned parties, by their 
respective attorneys, as follows:
    (1) The Court has jurisdiction over the subject matter of this 
action and, for purposes of this case only, over each of the parties 
hereto, and venue of this action is proper in the United States 
District Court for the District of Columbia.
    (2) The parties stipulate that a Final Judgment in the form hereto 
attached may be filed and entered by the Court, upon the motion of any 
party or upon the Court's own motion, at any time after compliance with 
the requirements of the Antitrust Procedures and Penalties Act (15 
U.S.C. 16), and without further notice to any party or other 
proceedings, provided that the United States of America (hereinafter 
``United States'') has not withdrawn its consent, which it may do at 
any time before the entry of the proposed Final Judgment by serving 
notice thereof on the parties and by filing that notice with the Court.
    (3) Defendants shall abide by and comply with the provisions of the 
proposed Final Judgment, pending the Judgment's entry by the Court, or 
until expiration of time for all appeals of any Court ruling declining 
entry of the proposed Final Judgment, and shall, from the date of the 
signing of this Stipulation by the parties, comply with all the terms 
and provisions of the proposed Final Judgment as though the same were 
in full force and effect as an order of the Court.
    (4) Defendants shall not consummate the transaction sought to be 
enjoined by the Complaint herein before the Court has signed this 
Stipulation and Order.
    (5) This Stipulation shall apply with equal force and effect to any 
amended proposed Final Judgment agreed upon in writing by the parties 
and submitted to the Court.
    (6) In the event (a) the United States has withdrawn its consent, 
as provided in paragraph (2) above, or (b) the proposed Final Judgment 
is not entered pursuant to this Stipulation, the time has expired for 
all appeals of any Court ruling declining entry of the proposed Final 
Judgment, and the Court has not otherwise ordered continued compliance 
with the terms and provisions of the proposed Final Judgment, then the 
parties are released from all further obligations under this 
Stipulation, and the making of this Stipulation shall be without 
prejudice to any party in this or any other proceeding.
    (7) The defendants represent that the divestiture ordered in the 
proposed Final Judgment can and will be made, and that the defendants 
will later raise no claims of mistake, hardship or difficulty of 
noncompliance as grounds for asking the Court to modify any of the 
divestiture or termination provisions contained therein.
    (8) The parties stipulate that Appendices IIA. and IV of the 
proposed Final Judgment, relating to defendants' patent applications, 
shall be filed under seal.

    For plaintiff United States of America.
Dando B. Cellini, Esq.
Paul A. Moore III, Esq.
U.S. Department of Justice, Antitrust Division, Litigation II, 1401 
H Street, NW, Suite 4000, Washington, DC 20005, (202) 307-0829.

    For defendant DTM Corporation.
Charles F. Rule, Esq. (#370818)
Fried Frank Harris Shriver and Jacobson, 1001 Pennsylvania Ave, 
N.W., Suite 800, Washington, D.C. 20004, (202) 639-7300

    For defendant 3D Systems Corporation.
John A. Herfort, Esq.
Gibson, Dunn & Crutcher LLP, 200 Park Avenue, New York, NY 10166, 
(212) 351-3832.

    For defendant 3D Systems Corporation.
Charles E. Biggio, Esq.
Akin, Gump, Strauss, Hauer & Feld LLP, 590 Madison Avenue, New York, 
NY 10022, (212) 872-1010.

    For defendant 3D Systems Corporation.
David Donohoe, Esq. (#3426);


[[Page 49201]]


Akin, Gump, Strauss, Hauer & Feld LLP, 1333 New Hampshire Avenue, 
NW, Washington, DC 20036, (202) 887-4000.

Order

    It is so ordered by the Court, this 16th day of August, 2001.

In the United States District Court for the District of Columbia

    [Civil No: 1:01CV01237 (GK)]

United States of America, Plaintiff, v. 3D Systems Corporation and DTM 
Corporation, Defendants.

    Filed: August 16, 2001.

Final Judgment

    Whereas, plaintiff, United States of America, filed its Complaint 
on June 6, 2001, plaintiff and defendants, 3D Systems Corporation 
(``3D'') and DTM Corporation (``DTM''), by their respective attorneys, 
have consented to the entry of this Final Judgment without trial or 
adjudication of any issue of fact or law, and without this Final 
Judgment constituting any evidence against or admission by any party 
regarding any issue of fact or law;
    And Whereas, defendants agree to be bound by the provisions of this 
Final Judgment pending its approval by the Court;
    And Whereas, the essence of this Final Judgment is the prompt and 
certain divestiture of certain rights or assets by the defendants to 
assure that competition is not substantially lessened;
    And Whereas, plaintiff requires defendants to make certain 
divestitures for the purpose of remedying the loss of competition 
alleged in the Complaint;
    And Whereas, defendants have represented to the United States that 
the divestitures required below can and will be made and that 
defendants will later raise no claim of hardship or difficulty as 
grounds for asking the Court to modify any of the divestiture 
provisions contained below;
    Now Therefore, before any testimony is taken, without trial or 
adjudication of any issue of fact or law, and upon consent of the 
parties, it is Ordered, Adjudged and Decreed:
I. Jurisdiction
    This Court has jurisdiction over the subject matter of and, for 
purposes of this case only, each of the parties to this action. The 
Complaint states a claim upon which relief may be granted against 
defendants under Section 7 of the Clayton Act, as amended (15 U.S.C. 
18).
II. Definitions
    As used in this Final Judgment:
    A. ``Acquirer'' means the entity to whom defendants divest the 
Divestiture Assets.
    B. ``3D'' means defendant 3D Systems Corporation, a Delaware 
corporation with its headquarters in Valencia, California, its 
successors and assigns, and its subsidiaries, divisions, groups, 
affiliates, partnerships and joint ventures, including 3D Systems, 
Inc., and their directors, officers, managers, agents, and employees.
    C. ``DTM'' means defendant DTM Corporation, a Texas corporation 
with its headquarters in Austin, Texas, its successors and assigns, and 
its subsidiaries, divisions, groups, affiliates, partnerships and joint 
ventures, and their directors, officers, managers, agents, and 
employees.
    D. ``Defendants'' means, collectively or individually as the 
context requires, DTM and/or 3D.
    E. ``Divestiture Assets'' means (1) a perpetual, assignable, 
transferable, fully paid-up (except as permitted by Section IV(E) 
below), non-exclusive license (without the right to sublicense, except 
for establishing distribution and contracting out manufacturing) under 
the RP Patents to develop, test, produce, market, sell, or distribute, 
or to supply any support or maintenance services for, products for use 
only in the field of either (but not both) the SL Technology or the LS 
Technology, which technology shall be the technology currently used by 
the Acquirer to manufacture RP Industrial Equipment (the ``Selected 
Technology''); and (2) the RP Assets.
    F. ``North America'' means Canada, Mexico and the United States.
    G. ``RP Assets'' means (1) a list of all North American purchasers 
of RP Industrial Equipment from 3D, if the Selected Technology is SL 
Technology, or from DTM, if the Selected Technology is LS Technology; 
(2) all software copyright licenses needed by Acquirer to purchase and 
resell both defendants' used RP Industrial Equipment in North America; 
and (3) at the option of the Acquirer, DTM's plant located at 1611 
Headway Circle, Bldg. 1, Austin, Texas (``Plant'').
    H. ``RP Patents'' means all North American patents owned by or 
licensed to defendants (including patents relating to materials and 
software), as of the date of filing of this Final Judgment, including 
all subsequent continuations, continuation-in-part, divisions, 
reexaminations or reissues thereof, if any, as well as any patents that 
have been applied for as of the date of filing of this Final Judgment 
but have not been issued covering technology marketed by defendants as 
of the date of filing of this Final Judgment, specifically including 
but not limited to the parents listed in Appendix I and applied for 
parents listed in Appendix IIA. annexed hereto, but specifically 
excluding those Inkjet Technology patents listed in Appendix III and 
applied for Inkjet Technology patents listed in Appendix IV annexed 
hereto and those licenses granted to 3D and DTM listed in Appendix V 
annexed hereto.
    I. ``LS Technology'' means technology (other than Inkjet 
Technology) that uses data to form, by heat, a three-dimensional 
object, layer-by-layer, from a sinterable powder material.
    J. ``SL Technology'' means technology (other than Inkjet 
Technology) that uses data to form, by radiation, a three-dimensional 
object, layer-by-layer, from a liquid, photocurable material.
    K. ``Inkjet Technology'' shall mean and include equipment, systems, 
supplies, software, processess or other technology utilized in the 
fabrication of three-dimensional objects from jettable materials.
    L. ``RP Industrial Equipment'' means products or processes 
incorporating LS Technology or SL Technology, but not the other, and 
not Inkjet Technology.
    M. ``Selected Technology'' means whichever one of the LS Technology 
or the SL Technology is currently used by the Acquirer to manufacture 
RP Industrial Equipment.
III. Applicability
    A. This Final Judgment applies to 3D and DTM, as defined above, and 
all other persons in active concert or participation with either of 
them who receive actual notice of this Final Judgment by personal 
service or otherwise.
    B. Defendants shall require, as a condition of the sale or other 
disposition of all or substantially all of their assets or of lesser 
business units that include the Divestiture Assets, that the purchaser 
of the Divestiture Assets agrees to be bound by the provisions of this 
Final Judgment, provided, however, that defendants need not obtain such 
an agreement from the Acquirer.
IV. Divestitures
    A. Defendants are ordered and directed, within one hundred twenty 
(120) calendar days after the filing of this Final Judgment, or five 
(5) days after notice of entry of this Final Judgment by the Court, 
whichever is later, to divest the Divestiture Assets in a manner 
consistent with this Final Judgment to an Acquirer acceptable to the 
United States in its sole discretion. The United States, in its sole 
discretion, may agree to extensions of this time period of up to sixty 
(60) days, and shall

[[Page 49202]]

notify the Court in such circumstances. Defendants agree to use their 
best efforts to divest the Divestiture Assets as expeditiously as 
possible.
    B. Defendants shall provide Acquirer with all software copyright 
licenses needed by Acquirer to purchase and resell defendants' used RP 
Industrial Equipment in North America, which licenses shall be on terms 
no less favorable than defendants offer to other purchased and 
resellers of their used RP Industrial Equipment.
    C. The Acquirer shall be a firm that currently manufactures RP 
Industrial Equipment in the Selected Technology, and shall be approved 
by plaintiff in its sole discretion. If plaintiff does not approve a 
purchaser of the Divestiture Assets under this Final Judgment, any 
grant by defendants of a license to that purchaser shall not satisfy 
the requirements of this Judgment.
    D. Defendants warrant that they have the authority to convey all 
intellectual property included in the Divestiture Assets free and clear 
of any encumbrances, contractual commitments or obligations, except for 
the licenses granted to 3D and DTM which are identified in Appendix V 
annexed hereto.
    E. To the extent that any rights to the RP Patents require 
defendants to sublicense rights from a third party to the Acquirer, 
such sublicense(s) must either be fully paid-up or granted on terms no 
less favorable than the terms applicable to defendants. Any sublicense 
granted pursuant to this Final Judgment must include provisions 
acceptable to plaintiff that will guard against the monitoring of the 
Acquirer's sales or production by defendants.
    F. Nothing in this Final Judgment shall be construed to require the 
Acquirer, as a condition of any license granted by defendants pursuant 
to Sections IV(A) or (B), to extend to the defendants the right to use 
the Acquirer's improvements to any of the Divestiture Assets.
    G. Defendants shall not assert against Acquirer any claims (1) for 
patent or copyright infringement in North America for products made, 
sold or used pursuant to the licenses granted in accordance with 
Section IV(A) and (B) of this Final Judgment; (2) for patent 
infringement in North America of the patents listed in Appendix V; or 
(3) that any equipment, systems, supplies, software, processes, or 
other technology sold by the Acquirer outside of North America prior to 
filing of this Final Judgment infringes in North America any patent or 
copyright issued or licensed to defendants in North America prior to 
the date of filing of this Final Judgment.
    H. In accomplishing the divestiture ordered by this Final Judgment, 
defendants promptly shall make known, by usual and customary means, the 
availability of the Divestiture Assets. Defendants shall inform any 
eligible person making inquiry regarding a possible license or purchase 
of the Divestiture Assets that they are being divested pursuant to this 
Final Judgment and provide that person with a copy of this Final 
Judgment except those parts filed under seal. Defendants shall offer to 
furnish to all prospective Acquirers, subject to customary 
confidentiality assurances, all information and documents relating to 
the Divestiture Assets customarily provided in a due diligence process 
except such information or documents subject to the attorney-client or 
work-product privileges and except customer lists and information 
regarding patent applications. Defendants shall make available such 
information to the United States at the same time that such information 
is made available to any other person.
    I. Defendants shall waive any non-compete clause(s) in any 
employment agreement(s), whether written or oral with any of 
defendants' present or former employees that are currently in effect, 
and shall not include non-compete clauses in any future employment 
agreements with respect to such present or former employees for a 
period of two (2) years from the date of filing of this Final Judgment. 
Defendants shall provide the Acquirer and the United States information 
relating to the personnel involved in the sales, marketing and 
manufacturing of RP Industrial Equipment in the Selected Technology to 
enable the Acquirer to make offers of employment, which does not 
preclude defendants from seeking to retain such personnel as employees. 
Defendants will not interfere with any negotiations by the Acquirer to 
employ any of defendants' present or former employees for a period of 
two (2) years from the date of filing of this Final Judgment.
    J. Defendants shall permit prospective Acquirers of the Divestiture 
Assets to have reasonable access to personnel and to make inspections 
of the Divestiture Assets, other than customer lists or patent 
applications; access to any and all environmental, zoning, and other 
permit documents and information; and access to any and all financial, 
operational, or other documents and information customarily provided as 
part of a due diligence process.
    K. Defendants shall warrant to the Acquirer of the Divestiture 
Assets that each tangible asset will be operational on the date of 
sale.
    L. Defendants shall not take any action that will impede, 
jeopardize, or delay in any way the permitting, operation, or 
divestiture of any of the Divestiture Assets.
    M. Defendants shall warrant to the Acquirer of the Divestiture 
Assets that there are no material defects in the environmental, zoning 
or other permits pertaining to the operation of any tangible asset, and 
that following the sale of the Divestiture Assets, defendants will not 
undertake, directly or indirectly, any challenges to the environmental, 
zoning, or other permits relating to the operation of any of the 
tangible Divestiture Assets.
    N. Unless the United States otherwise consents in writing, the 
divestiture pursuant to Section IV, or by trustee appointed to Section 
V, of this Final Judgment, shall include the entire Divestiture Assets 
and shall be accomplished in such a way as to satisfy the United 
States, in its sole discretion, that the Divestiture Assets can and 
will be used by the Acquirer as part of a viable, ongoing commercial 
enterprise engaged in the sale of RP Industrial Equipment in North 
America, and that the divestiture will remedy the competitive harm 
alleged in the Complaint. The divestitures, whether pursuant to Section 
IV or Section V of this Final Judgment,
    (1) Shall be made to an Acquirer that, in the United States' sole 
judgment, has the intent and capability (including the necessary 
managerial, operational, technical and financial capability) of 
competing effectively in the business of servicing and selling RP 
Industrial Equipment in the United States; and
    (2) Shall be accomplished so as to satisfy the United States, in 
its sole discretion, that none of the terms of any agreement between an 
Acquirer and defendants give defendants the ability unreasonably to 
raise the Acquirer's costs, to lower the Acquirer's efficiency, or 
otherwise to interfere in the ability of the Acquirer to compete 
effectively.
V. Appointment of Sales Trustee
    A. If defendants have not divested the Divestiture Assets within 
the time period specified in Section IV(A), defendants shall notify the 
United States of that fact in writing. Upon application of the United 
States, the Court shall appoint a trustee selected by the United States 
and approved by the Court to effect the divestiture of the Divestiture 
Assets.

[[Page 49203]]

    B. After the appointment of a trustee becomes effective, only the 
trustee shall have the right to sell the Divestiture Assets. The 
trustee shall have the power and authority to accomplish the 
divestiture to an Acquirer acceptable to the United States at such 
price and on such terms as are then obtainable upon reasonable effort 
by the trustee, subject to the provisions of Sections IV, V, and VI of 
this Final Judgment, and shall have such other powers as this Court 
deems appropriate. Subject to Section V (D) of this Final Judgment, the 
trustee may hire at the cost and expense of defendants any investment 
bankers, attorneys, or other agents, who shall be solely accountable to 
the trustee, reasonably necessary in the trustee's judgment to assist 
in the divestiture.
    C. Defendants shall not object to a sale by the trustee on any 
ground other than the trustee's malfeasance. Any such objections by 
defendants must be conveyed in writing to the United States and the 
trustee within ten (10) calendar days after the trustee has provided 
the notice required under Section VI.
    D. The trustee shall serve at the cost and expense of defendants, 
on such terms and conditions as the plaintiff approves, and shall 
account for all monies derived from the sale of the assets sold by the 
trustee and all costs and expenses so incurred. After approval by the 
Court of the trustee's accounting, including fees for its services and 
those of any professionals and agents retained by the trustee, all 
remaining money shall be paid to defendants and the trust shall then be 
terminated. The compensation of the trustee and any professionals and 
agents retained by the trustee shall be reasonable in light of the 
value of the Divestiture Assets and based on a fee arrangement 
providing the trustee with an incentive based on the price and terms of 
the divestiture and the speed with which it is accomplished, but 
timeliness is paramount.
    E. Defendants shall use their best efforts to assist the trustee in 
accomplishing the required divestiture. The trustee and any 
consultants, accountants, attorneys, and other persons retained by the 
trustee shall have full and complete access to the personnel, books, 
records, and facilities of the business to be divested, and defendants 
shall develop financial and other information relevant to such business 
as the trustee may reasonably request, subject to reasonable protection 
for trade secret or other confidential research, development, or 
commercial information, customer lists and information relating to 
patent applications. Defendants shall take no action to interfere with 
or to impede the trustee's accomplishment of the divestiture.
    F. After its appointment, the trustee shall file monthly reports 
with the United States and the Court setting forth the trustee's 
efforts to accomplish the divestiture ordered under this Final 
Judgment. To the extent such reports contain information that the 
trustee deems confidential or that would be deemed confidential under 
Section V(E), such reports shall not be filed in the public docket of 
the Court. Such reports shall include the name, address, and telephone 
number of each person who, during the preceding month, made an offer to 
acquire, expressed an interest in acquiring, entered into negotiations 
to acquire, or was contracted or made an inquiry about acquiring, any 
interest in the Divestiture Assets, and shall describe in detail each 
contact with any such person. The trustee shall maintain full records 
of all efforts made to divest the Divestiture Assets.
    G. If the trustee has not accomplished such divestiture within six 
months after its appointment, the trustee shall promptly file with the 
Court a report setting forth (1) the trustee's efforts to accomplish 
the required divestiture, (2) the reasons, in the trustee's judgment, 
why the require divestiture has not been accomplished, and (3) the 
trustee's recommendations. To the extent such reports contain 
information that the trustees deems confidential or that would be 
deemed confidential under Section V(E), such reports shall not be filed 
in the public docket of the Court. The trustee shall at the same time 
furnish such reports to the plaintiff who shall have the right to make 
additional recommendations consistent with the purpose of the trust. 
The Court thereafter shall enter such orders as it shall deem 
appropriate to carry out the purpose of the Final Judgment, which may, 
if necessary, include extending the trust and the term of the trustee's 
appointment by a period requested by the United States.
VI. Notice of Proposed Divestiture
    A. Within two (2) business days following execution of a definitive 
divestiture agreement, defendants or the trustee, whichever is then 
responsible for effecting the divestiture required herein, shall notify 
the United States of any proposed divestiture required by Section IV or 
V of this Final Judgment. If the trustee is responsible, it shall 
similarly notify defendants. The notice shall set forth the details of 
the proposed divestiture and list the name, address, and telephone 
number of each person not previously identified who offered or 
expressed an interest in or desire to acquire any ownership interest in 
the Divestiture Assets, together with full details of the same.
    B. Within fifteen (15) calendar days of receipt by the United 
States of such notice, the United States may request from defendants, 
the proposed Acquirer, any other third party, or the trustee if 
applicable, additional information concerning the proposed divestiture, 
the proposed Acquirer, and any other potential Acquirer. Defendants and 
the trustee shall furnish any additional information requested within 
fifteen (15) calendar days of the receipt of the request, unless the 
parties shall otherwise agree.
    C. Within thirty (30) calendar days after receipt of the notice or 
within twenty (20) calendar days after the United States has been 
provided the additional information requested from defendants, the 
proposed Acquirer, any third party, and the trustee, whichever is 
later, the United States shall provide written notice to defendants and 
the trustee, if there is one, stating whether or not it objects to the 
proposed divestiture. If the United States provides written notice that 
it does not object, the divestiture may be consummated, subject only to 
defendants' limited right to object to the sale under Section V(C) of 
this Final Judgment. Absent written notice that the United States does 
not object to the proposed Acquirer or upon objection by the United 
States, a divestiture proposed under Section IV or Section V shall not 
be consummated. Upon objection by defendants under Section V(C), a 
divestiture proposed under Section V shall not be consummated unless 
approved by the Court.
VII. Financing
    Defendants shall not finance all or any part of any purchase made 
pursuant to Section IV of V of this Final Judgment.
VIII. Preservation of Assets
    Until the divestiture required by this Final Judgment has been 
accomplished:
    A. Defendants shall provide sufficient working capital and lines 
and sources of credit to continue to maintain the Plant as an 
economically viable facility.
    B. Defendants shall not, except as part of a divestiture approved 
by the United Stases, remove, sell, lease, assign, transfer, pledge or 
otherwise dispose of any of the Divestiture Assets.
    C. Defendants shall take no action that would interfere with the 
ability of any trustee appointed pursuant to the Final Judgment to 
complete the divestiture to

[[Page 49204]]

an Acquirer acceptable to the United States.
IX. Affidavits
    A. Within twenty (20) calendar days of the filing of the proposed 
Final Judgment in this matter, and every thirty (30) calendar days 
thereafter until the divestiture has been completed under Section IV or 
V, defendants shall deliver to the United States an affidavit as to the 
fact and manner of its compliance with Section IV or V of this Final 
Judgment. Each such affidavit shall include the name, address, and 
telephone number of each person who, during the preceding thirty days, 
made an offer to acquire, expressed an interest in acquiring, entered 
into negotiations to acquire, or was contacted or made an inquiry about 
acquiring, any interest in the Divestiture Assets, and shall describe 
in detail each contact with any such person during that period. Each 
such affidavit shall also include a description of the efforts 
defendants have taken to solicit buyers for the Divestiture Assets, and 
to provide required information to prospective purchasers, including 
the limitations, if any, on such information. Assuming the information 
set forth in the affidavit is true and complete, any objection by the 
United States to information provided by defendants, including 
limitation on information, shall be made within fourteen (14) days of 
receipt of such affidavit.
    B. Within twenty (20) calendar days of the filing of the proposed 
Final Judgment in this matter, defendants shall deliver to the United 
States an affidavit that describes in reasonable detail all actions 
defendants have taken and all steps defendants have implemented on an 
ongoing basis to comply with Section VIII of this Final Judgment. 
Defendants shall deliver to the United States an affidavit describing 
any changes to the efforts and actions outlined in defendants' earlier 
affidavits filed pursuant to this section within fifteen (15) calendar 
days after the change is implemented.
    C. Defendants shall keep all records of all efforts made to 
preserve and divest the Divestiture Assets until one year after such 
divestiture has been completed.
X. Compliance Inspection
    A. For the purposes of determining or securing compliance with this 
Final Judgment, or of determining whether the Final Judgment should be 
modified or vacated, and subject to any legally recognized privilege, 
from time to time duly authorized representatives of the United States 
Department of Justice, including consultants and other persons retained 
by the United States, shall, upon written request of a duly authorized 
representative of the Assistant Attorney General in charge of the 
Antitrust Division, and on reasonable notice to defendants, be 
permitted:
    (1) Access during defendants' office hours to inspect and copy, or 
at plaintiff's option, to require defendants to provide copies of, all 
books, ledgers, accounts, records and documents in the possession, 
custody, or control of defendants, relating to any matters contained in 
this Final Judgment; and
    (2) To interview, either informally or on the record, defendants' 
officers, employees, or agents, who may have their individual counsel 
present, regarding such matters. The interviews shall be subject to the 
reasonable convenience of the interviewee and without restraint or 
interference by defendants.
    B. Upon the written request of a duly authorized representative of 
the Assistant Attorney General in charge of the Antitrust Division, 
defendants shall submit written reports, under oath if requested, 
relating to any of the matters contained in this Final Judgment as may 
be requested.
    C. No information or documents obtained by the means provided in 
this section or Section IX shall be divulged by the United States of 
any person other than an authorized representative of the executive 
branch of the United States, except as required by this Court, or in 
the course of legal proceedings to which the United States is a party 
(including grand jury proceedings), or for the purpose of securing 
compliance with this Final Judgment, or as otherwise required by law.
    D. If at the time information or documents are furnished by 
defendants to the United States, defendants represent and identify in 
writing the material in any such information or documents to which a 
claim of protection may be asserted under Rule 26(c)(7) of the Federal 
Rules of Civil Procedure, and defendants mark each pertinent page of 
such material, ``Subject to claim of protection under Rule 26(c)(7) of 
the Federal Rules of Civil Procedure,'' then the United States shall 
give defendants ten (10) calendar days notice prior to divulging such 
material in any legal proceeding (other than a grand jury proceeding).
XI. No Reacquisition
    Defendants may not reacquire any part of the Divestiture Assets 
during the term of this Final Judgment.
XII. Retention of Jurisdiction
    This Court retains jurisdiction to enable any party to this Final 
Judgment to apply to this Court at any time for further orders and 
directions as may be necessary or appropriate to carry out or construe 
this Final Judgment, to modify any of its provisions, to enforce 
compliance, and to punish violations of its provisions.
XIII. Expiration of Final Judgment
    Unless this Court grants an extension, this Final Judgment shall 
expire ten years from the date of its entry.
XIV. Public Interest Determination
    Entry of this Final Judgment is in the public interest.
    Court approval subject to procedures of Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16.

Appendix I

    United States Patents Issued, Assigned or Licensed to 3D Systems
------------------------------------------------------------------------
            Patent No.                          Patent title
------------------------------------------------------------------------
4,469,654.........................  EDM Electrodes.
4,491,558.........................  Austenitic Manganese Steel-
                                     Containing Composite Article.
4,575,330.........................  Apparatus for production of three-
                                     dimensional objects by
                                     stereolithography.
4,929,402.........................  Method for production of three
                                     dimensional objects by
                                     stereolithography.
4,961,154.........................  Three dimensional modelling
                                     apparatus.
4,996,010.........................  Methods and apparatus for production
                                     of three-dimensional objects by
                                     stereolithography.
4,999,143.........................  Methods and apparatus for production
                                     of three-dimensional objects by
                                     stereolithography.
5,015,424.........................  Methods and apparatus for production
                                     of three-dimensional objects by
                                     stereolithography.
5,058,988.........................  Apparatus and method for profiling a
                                     beam.
5,059,021.........................  Apparatus and method for correcting
                                     for drift in production of objects
                                     by stereolithography.
5,059,359.........................  Methods and apparatus for production
                                     of three-dimensional objects by
                                     stereolithography.

[[Page 49205]]

 
5,071,337.........................  Apparatus for forming a solid three-
                                     dimensional object from a liquid
                                     medium.
5,076,974.........................  Methods of curing partially
                                     polymerized parts.
5,096,530.........................  Resin film recoating method and
                                     apparatus.
5,104,592.........................  Method of and apparatus for
                                     production of three-dimensional
                                     objects by stereolithography with
                                     reduced curl.
5,123,734.........................  Apparatus and method for calibrating
                                     and normalizing a stereolithography
                                     apparatus.
5,130,064.........................  Method of making a three dimensional
                                     object by stereolithography.
5,137,662.........................  Methods and apparatus for production
                                     of three-dimensional objects by
                                     stereolithography.
5,143,663.........................  Stereolithography method and
                                     apparatus.
5,164,128.........................  Methods for curing partially
                                     polymerized parts.
5,174,931.........................  Method of and apparatus for making a
                                     three-dimensional product by
                                     stereolithography.
5,182,055.........................  Method of making a three dimensional
                                     object by stereolithography.
5,182,056.........................  Stereolithography method and
                                     apparatus employing various
                                     penetration depths.
5,182,715.........................  Rapid and Accurate production of
                                     stereolithographic parts.
5,184,307.........................  Method and apparatus for production
                                     of high resolution three-
                                     dimensional objects by
                                     stereolithography.
5,192,469.........................  Simultaneous multiple layer curing
                                     in stereolithography.
5,192,559.........................  Apparatus for building three-
                                     dimensional objects with sheets.
5,209,878.........................  Surface resolution in three-
                                     dimensional objects by inclusion of
                                     thin fill layers.
5,234,636.........................  Method of coating stereolithographic
                                     parts.
5,236,637.........................  Method of and apparatus for
                                     production of three-dimensional
                                     objects by stereolithography.
5,238,639.........................  Method and apparatus for
                                     stereolithographic curl balancing.
5,248,456.........................  Method and apparatus for cleaning
                                     stereolithographically produced
                                     objects.
5,256,340.........................  Method of making a three-dimensional
                                     object by stereolithography.
5,258,146.........................  Method of and apparatus for
                                     measuring and controlling fluid
                                     level in stereolithography.
5,267,013.........................  Apparatus and Method of profiling a
                                     beam.
5,273,691.........................  Stereolithographic curl reduction.
5,321,622.........................  Boolean layer comparison slice.
5,345,391.........................  Method and apparatus for production
                                     of high resolution three-
                                     dimensional objects by
                                     stereolithography.
5,358,673.........................  Applicator device and method for
                                     dispensing a liquid medium in a
                                     laser modeling machine.
5,447,822.........................  Apparatus and related method for
                                     forming a substantially flat
                                     stereolithographic working surface.
5,460,758.........................  Method and apparatus for production
                                     of a three-dimensional object.
5,481,470.........................  Boolean layer comparison slice.
5,495,328.........................  Apparatus and method for calibrating
                                     and normalizing a
                                     stereolithographic apparatus.
5,534,104.........................  Method and apparatus for production
                                     of three-dimensional objects.
5,536,467.........................  Method and apparatus for producing a
                                     three-dimensional object.
5,554,336.........................  Method and apparatus for production
                                     of three-dimensional objects by
                                     stereolithography.
5,569,431.........................  Method and apparatus for production
                                     of three-dimensional objects by
                                     stereolithography.
5,571,471.........................  Method of production of three-
                                     dimensional objects by
                                     stereolithography.
5,573,722.........................  Method and apparatus for production
                                     of three-dimensional objects by
                                     stereolithography.
5,582,876.........................  Stereographic apparatus and method.
5,597,520.........................  Simultaneous multiple layer curing
                                     in stereolithography.
5,609,812.........................  Method of making a three-dimensional
                                     object by stereolithography.
5,609,813.........................  Method of making a three-dimensional
                                     object by stereolithography.
5,610,824.........................  Rapid and accurate production of
                                     stereolithographic parts.
5,630,981.........................  Method for production of three-
                                     dimensional objects by
                                     stereolithography.
5,637,169.........................  Method of building three-dimensional
                                     objects with sheets.
5,651,934.........................  Recoating of stereolithographic
                                     layers.
5,665,401.........................  Apparatus for producing an object
                                     using stereolithography.
5,667,820.........................  Apparatus for making solid three-
                                     dimensional article from a liquid
                                     medium.
5,688,464.........................  Vibrationally enhanced
                                     stereolithographic recoating.
5,693,144.........................  Vibrationally enhanced
                                     stereolithographic recoating.
5,711,911.........................  Methods and apparatus for making a
                                     three-dimensional object by
                                     stereolithography.
5,745,834.........................  Free Form Fabrication of Metallic
                                     Components.
5,753,171.........................  Method and apparatus for producing a
                                     three-dimensional object.
5,762,856.........................  Method for production of three-
                                     dimensional objects by
                                     stereolithography.
5,772,947.........................  Stereolithographic curl reduction.
5,779,967.........................  Method and apparatus for production
                                     of three-dimensional objects by
                                     stereolithography.
5,785,918.........................  Method and apparatus for production
                                     of three-dimensional objects by
                                     stereolithography.
5,814,265.........................  Method and apparatus for production
                                     of three-dimensional objects by
                                     stereolithography.
5,832,415.........................  Method and apparatus for calibrating
                                     a control apparatus for deflecting
                                     a laser beam.
5,840,239.........................  Apparatus and method for forming
                                     three-dimensional objects in
                                     stereolithography utilizing a laser
                                     exposure system having a diode
                                     pumped frequency quadrupled solid
                                     state laser.
5,854,748.........................  Boolean layer comparison slice.
5,855,718.........................  Method and apparatus for making
                                     partially solidified three-
                                     dimensional objects on a layer-by-
                                     layer basis from a solidifiable
                                     medium.
5,870,307.........................  Method and apparatus for production
                                     of high resolution three-
                                     dimensional objects by
                                     stereolithography.
5,885,511.........................  Method of making a solid three-
                                     dimensional article from a liquid
                                     medium.
5,891,382.........................  Recoating of stereolithographic
                                     layers.

[[Page 49206]]

 
5,897,825.........................  Method for producing a three-
                                     dimensional object.
5,902,537.........................  Rapid recoating of three-dimensional
                                     objects formed on a cross-sectional
                                     basis.
5,902,538.........................  Simplified stereolithographic object
                                     formation methods of overcoming
                                     minimum recoating depth
                                     limitations.
5,904,89..........................  Apparatus and method for producing
                                     an object using stereolithography.
5,932,055.........................  Direct Metal fabrication Using a
                                     Carbon Precursor to Bind the
                                     ``Green Form'' Part and Catalyze a
                                     Eutectic Reducing Element in a
                                     Supersolidus Liquid Phase Sintering
                                     Process.
5,932,059.........................  Method for producing a three-
                                     dimensional object.
5,940,890.........................  Apparatus and method for producing
                                     three-dimensional objects.
5,945,058.........................  Method and apparatus for identifying
                                     surface features associated with
                                     selected lamina of a three-
                                     dimensional object being
                                     stereographically formed.
5,965,079.........................  Method and apparatus for making a
                                     three-dimensional object by
                                     stereolithography.
5,989,476.........................  Process of making a molded
                                     refractory article.
5,999,184.........................  Simultaneous multiple layer curing
                                     in stereolithography.
6,001,297.........................  Method for controlling exposure of a
                                     solidifiable medium using a pulsed
                                     radiation source in building a
                                     three-dimensional object using
                                     stereolithography.
6,027,324.........................  Apparatus for production of three-
                                     dimensional objects by
                                     stereolithography.
6,029,096.........................  Method and apparatus for identifying
                                     surface features associated with
                                     selected lamina of a three-
                                     dimensional object being
                                     stereolithographically formed.
6,036,911.........................  Method of making a three-dimensional
                                     object by stereolithography.
6,048,188.........................  Stereolithographic curl reduction.
6,048,487.........................  Recoating stereolithographic layers.
6,084,980.........................  Method of and apparatus for deriving
                                     data intermediate to cross-
                                     sectional data descriptive of a
                                     three-dimensional object.
6,103,176.........................  Stereolithographic method and
                                     apparatus for production of three
                                     dimensional objects using recoating
                                     parameters for groups of layers.
6,110,409.........................  Rapid prototyping process and
                                     apparatus.
6,110,602.........................  Method of making a three-dimensional
                                     object.
6,126,884.........................  Stereolithographic method and
                                     apparatus with enhanced control of
                                     prescribed stimulation production
                                     and application.
6,129,884.........................  Stereolithographic method and
                                     apparatus with enhanced control of
                                     prescribed stimulation production
                                     and application.
6,132,667.........................  Stereolithographic method and
                                     apparatus with enhanced control of
                                     prescribed stimulation production
                                     and application.
6,153,142.........................  Stereolithographic method and
                                     apparatus for production of three
                                     dimensional objects with enhanced
                                     control of the build environment.
6,157,663.........................  Laser with optimized coupling of
                                     pump light to gain medium in a side-
                                     pumped geometry.
6,159,411.........................  Rapid prototyping method and
                                     apparatus with simplified build
                                     preparation for production of three
                                     dimensional objects.
6,172,996.........................  Apparatus and method for forming
                                     three-dimensional objects in
                                     stereolithography utilizing a laser
                                     exposure system with a diode pumped
                                     frequency-multiplied solid state
                                     laser.
6,179,601.........................  Simplified stereolithographic object
                                     formation methods of overcoming
                                     minimum recoating depth
                                     limitations.
6,215,095.........................  Apparatus and method for controlling
                                     exposure of a solidifiable medium
                                     using a pulsed radiation source in
                                     building a three-dimensional object
                                     using stereolithography.
6,224,816.........................  Molding method, apparatus and device
                                     including use of powder metal
                                     technology for forming a molding
                                     tool with thermal control elements.
6,241,934.........................  Stereolithographic method and
                                     apparatus with enhanced control of
                                     prescribed stimulation production
                                     and application.
6,261,077.........................  Rapid prototyping apparatus with
                                     enhanced thermal and/or vibrational
                                     stability for production of three
                                     dimensional objects
6,261,506.........................  Method of making a three dimensional
                                     object,
6,261.507.........................  Method of and apparatus for making a
                                     three dimensional object by
                                     stereolithography.
6,264,873.........................  Method of making a three-dimensional
                                     object by stereolithograph.
------------------------------------------------------------------------


                  Canadian Patents Issued to 3D Systems
------------------------------------------------------------------------
            Serial No.                       Topic            Patent No.
------------------------------------------------------------------------
596827...........................  Curl Reduction..........      1339750
596825...........................  Slice...................      1338521
596826...........................  Beam Profiling..........      1334052
596838...........................  Off-Peak Post Cure......      1338954
596850...........................  Stress Reliefs..........      1338628
596847...........................  Supports................      1339751
612990...........................  Doctor Blade/Liquid           1337955
                                    Leveling.
616962...........................  Beam Profiling Div......      1340501
617113...........................  SL Beam Profiling.......      1341214
617087...........................  SL Curl Reduction.......      1340890
------------------------------------------------------------------------


[[Page 49207]]


                  Mexican Patents Issued to 3D Systems
------------------------------------------------------------------------
            Serial No.                       Topic            Patent No.
------------------------------------------------------------------------
975844...........................  Rapid Recoating.........       195669
------------------------------------------------------------------------


  United States Patents Issued, Assigned or Licensed to DTM Corporation
------------------------------------------------------------------------
            Patent No.                          Patent title
------------------------------------------------------------------------
4,863,538.........................  Method and apparatus for producing
                                     parts by selective sintering.
4,938,816.........................  Selective laser sintering with
                                     assisted powder handling.
4,944,817.........................  Multiple material systems for
                                     selective beam sintering.
5,017,753.........................  Method and apparatus for producing
                                     parts by selective sintering
                                     (Deckard).
5,076,869.........................  Multiple material systems for
                                     selective beam sintering.
5,132,143.........................  Method for producing parts
                                     (Deckard).
5,147,587.........................  Method of producing parts and molds
                                     using composite ceramic powders.
5,155,321.........................  Radiant heating apparatus for
                                     providing uniform surface
                                     temperature useful in selective
                                     laser sintering.
5,156,697.........................  Selective laser sintering of parts
                                     by compound formation of precursor
                                     powders.
5,252,264.........................  Apparatus and method for producing
                                     parts with multi-directional powder
                                     delivery.
5,296,062.........................  Multiple material systems for
                                     selective beam sintering.
5,304,329.........................  Method of recovering recyclable
                                     unsintered powder from the part bed
                                     of selective laser sintering
                                     machine.
5,316,580.........................  Method and apparatus for producing
                                     parts by selective sintering.
5,342,919.........................  Sinterable Semi-Crystalline Powder
                                     and Near-Fully Dense Article Formed
                                     Therewith.
5,352,405.........................  Thermal control of selective laser
                                     sintering via control of the laser
                                     scan.
5,382,308.........................  Multiple material systems for
                                     selective beam sintering.
5,527,887.........................  Sinterable semi-crystalline power
                                     and near-fully dense article formed
                                     therewith.
5,597,589.........................  Apparatus for producing parts by
                                     selective sintering.
5,616,294.........................  Method for producing parts by
                                     infiltration of porous intermediate
                                     parts.
5,639,070.........................  Method for producing parts by
                                     selective sintering.
5,640,667.........................  Laser-directed fabrication of full-
                                     density metal articles using hot
                                     isostatic processing.
5,648,450.........................  Sinterable semi-crystalline powder
                                     and near-fully dense article formed
                                     therein.
5,733,497.........................  Selective laser sintering with
                                     composite plastic material.
5,749,041.........................  Method of forming three-dimensional
                                     articles using thermosetting
                                     materials.
5,817,206.........................  Selective laser sintering of polymer
                                     powder of controlled particle size
                                     distribution.
5,990,268.........................  Sinterable semi-crystalline powder
                                     and near fully dense article formed
                                     therewith.
6,085,122.........................  End-of-vector laser power control in
                                     a selective laser sintering system.
6,136,948.........................  Sinterable semi-crystalline powder
                                     and near-fully dense article formed
                                     therewith.
6,151,345.........................  Laser power control with stretched
                                     initial pulses.
------------------------------------------------------------------------

Appendix II

A. Filed Under Seal Pursuant to Court Order

Appendix II

B. Canadian Patents Applied for by 3D Systems

------------------------------------------------------------------------
            Serial No.                              Topic
------------------------------------------------------------------------
2072136...........................  Skintinuous/Weave.
2095225...........................  Layer Comparison.
2186613...........................  SMLC/Quickcast.
------------------------------------------------------------------------

Appendix III

                3D Systems' United States Inkjet Patents
------------------------------------------------------------------------
            Patent No.                              Title
------------------------------------------------------------------------
4,992,806.........................  Method of jetting phase change ink.
5,141,680.........................  Thermal Stereolithography.
5,174,943.........................  Method for production of three-
                                     dimensional objects by
                                     stereolithography.
5,313,232.........................  Method of jetting phase change ink.
5,344,298.........................  Apparatus for making three-
                                     dimensional objects by
                                     stereolithography.
5,501,824.........................  Thermal stereolithography.
5,569,349.........................  Thermal stereolithography.
5,672,312.........................  Thermal stereolithography.
5,676,904.........................  Thermal stereolithography.

[[Page 49208]]

 
5,695,707.........................  Thermal stereolithography.
5,776,409.........................  Thermal stereolithography using
                                     slice techniques.
5,855,836.........................  Method for selective deposition
                                     modeling.
5,943,235.........................  Rapid prototyping system and method
                                     with support region data
                                     processing.
5,997,291.........................  Hot-melt material for heating plate.
6,027,682.........................  Thermal stereolithograph using slice
                                     techniques.
6,132,665.........................  Compositions and methods for
                                     selective deposition modeling.
6,133,353.........................  Phase change solid imaging material.
6,133,355.........................  Selective deposition modeling
                                     materials and method.
6,136,252.........................  Apparatus for electro-chemical
                                     deposition with thermal anneal
                                     chamber.
6,162,378.........................  Method and apparatus for variably
                                     controlling the temperature in a
                                     selective deposition modeling
                                     environment.
6,193,923.........................  Selective deposition modeling method
                                     and apparatus for forming three-
                                     dimensional objects and supports.
6,270,335.........................  Selective Deposition Modeling Method
                                     and Apparatus for Forming Three-
                                     Dimensional Objects and Supports.
Des. 420,371......................  Rapid prototype machine.
Des. 422,609......................  Container for material loading.
Des. 423,023......................  Rapid prototype machine.
------------------------------------------------------------------------

Appendix IV

Filed Under Seal Pursuant to Court Order

Appendix V

       Patents Licensed to 3D Systems With No Right To Sublicense
------------------------------------------------------------------------
                Patent No.                            Assignee
------------------------------------------------------------------------
4,704,503.................................  Patlex Corporation.
4,746,201.................................  Patlex Corporation.
5,253,177.................................  NTT Data/CMET Inc.
5,415,820.................................  NTT Data/CMET Inc.
------------------------------------------------------------------------


     Patents Licensed to DTM Corporation With No Right To Sublicense
------------------------------------------------------------------------
                Patent No.                            Assignee
------------------------------------------------------------------------
5,745,834.................................  Rockwell Science.
5,932,055.................................  Rockwell Science.
------------------------------------------------------------------------

In The United States District Court for the District of Columbia

[Civil No.: 1:01CV01237 (GK)]

United States of America, Plaintiff, v. 3D Systems Corporation and DTM 
Corporation, Defendants

Competitive Impact Statement

    The United States, pursuant to Section 2(b) of the Antitrust 
Procedures and Penalties Act (``APPA''), 15 U.S.C. 16(b)-(h), files 
this Competitive Impact Statement relating to the proposed Final 
Judgment submitted for entry in this civil antitrust proceeding.
I. Nature and Purpose of the Proceeding
    The United States filed a civil antitrust Complaint on June 6, 
2001, alleging that the proposed acquisition of DTM Corporation 
(``DTM'') by 3D Systems Corporation (``3D'') would substantially lessen 
competition in violation of Section 7 of the Clayton Act, 15 U.S.C. 18.
    The Complaint alleges that 3D and DTM are two of only three firms 
that produce industrial rapid prototyping (``RP'') systems in the 
United States. Both 3D and DTM hold extensive patent portfolio related 
to RP systems production. These patents have limited the number of 
firms in the U.S. market by preventing firms that sell RP systems 
abroad from competing in the United States. The Complaint alleges that 
the transaction will substantially lessen competition in the 
development, production and sale of industrial RP systems sold in the 
United States, thereby harming consumers. Accordingly, the Complaint 
asks the Court to issue (1) a judgment that the proposed acquisition of 
DTM by 3D would violate of Section 7 of the Clayton Act, 15 U.S.C. 18; 
and (2) permanent injunctive relief that would prevent defendants from 
carrying out the acquisition or otherwise combining their operations.
    After this suit was filed, the United States and defendants reached 
a proposed settlement that permits 3D to complete its acquisition of 
DTM, while preserving competition in the market for industrial RP 
systems by requiring defendants to license their RP-related patent 
portfolios. A Stipulation and proposed Final Judgment embodying the 
settlement were filed with the Court on August 17, 2001.
    The proposed Final Judgment orders 3D and DTM to grant a license to 
develop manufacture and sell, and to supply any support or maintenance 
services for, products under the defendants' RP patent portfolios 
within a limited field of use matching either 3D's or DTM's technology. 
The licensee, to be approved by the United States, must be a firm that 
currently manufacturers industrial RP systems. The defendants must 
complete the divestiture within one hundred twenty (120) calendar days 
after the filing of the proposed Final Judgment, or five (5) days after 
notice of entry of the Final Judgment by the Court, whichever is later. 
The United States may extend the time period for divestiture for up to 
sixty (60) days. If the defendants do not complete the divestiture 
within the prescribed period, the Court will appoint a trustee to 
achieve the divestiture.
    The United States and the defendants have stipulated that the 
proposed Final Judgment may be entered after compliance with the APPA. 
Entry of the proposed Final Judgment would terminate this action, 
except that the Court would retain jurisdiction to construe, modify, or 
enforce the provisions of the proposed Final Judgment, and to punish 
violations thereof.
II. Description of the Events Giving Rise to the Alleged Violation of 
the Antitrust Laws
A. The Defendants
    Defendant 3D is a Delaware corporation with its principal place of 
business in Valencia, California. 3D is a manufacturer and supplier of 
RP systems and related equipment, proprietary materials used in RP 
systems, and associated services. For the year ending December 31, 
2000, 3D reported sales of $110 million.

[[Page 49209]]

    Defendant DTM is a Texas Corporation with its principal place of 
business in Austin, Texas. DTM designs, manufactures, markets and 
supports RP systems and related materials used in RP systems. For the 
year ending December 31, 2000, DTM reported sales of $40 million.
B. The Proposed Acquisition
    On April 2, 2001, 3D and DTM entered into an agreement and plan of 
merger, pursuant to which 3D intended to acquire DTM in a cash tender 
offer. The defendants valued the transaction at an estimated $45 
million. This proposed transaction, which would have reduced the number 
of competitors in the U.S. industrial RP systems market from three to 
two, precipitated the United States' antitrust suit on June 6, 2001. 
Following the filing of the suit, the defendants postponed closing the 
proposed transaction pending the outcome of settlement negotiations. On 
August 16, 2001, the Stipulation and proposed Final Judgment to resolve 
the suit were filed with the Court.
C. The Competitive Effects of the Acquisition
    1. Industrial RP Systems. Rapid prototyping is a process by which a 
machine transforms a computer design into a three-dimensional prototype 
or model. Rapid prototyping is significantly faster and less expensive 
than traditional methods of creating a prototype, such as machining, 
milling or grinding. Competing technologies are used in industrial RP 
systems to create prototypes. Stereolithography (``SL'') technology, 
utilized by 3D, forms a three-dimensional object through radiation from 
a liquid, photocurable material. DTM's RP systems use laser sintering 
(``LS'') technology to heat and form a sinterable powder into a three-
dimensional form.
    There are two types of RP systems: industrial and professional. 
Industrial RP systems are large, cost hundreds of thousands of dollars 
and are able to create functional prototypes, tooling inserts, and low 
volume production quantities of parts. Professional RP systems are 
smaller and less expensive, use ``inkjet'' printing technology, and are 
geared toward the creation of concept models in an office setting. 
Sales of industrial RP systems and associated materials represent the 
largest and most profitable segment of the U.S. RP industry, accounting 
for approximately 85% of the total RP-related sales last year. Because 
of limited capabilities, professional RP systems are not good 
substitutes for industrial RP systems.
    There is a broad range of uses for the technology employed in an 
industrial RP system. Industrial RP systems can be used to create 
prototypes, running the gamut from a non-functional model of a hand-
held calculator, used for visual inspection in early design phases, to 
a sophisticated exhaust manifold for an automobile, which can be bolted 
in place and tested. The Complaint alleges that the development, 
manufacture and sale of industrial RP systems is a line of commerce or 
relevant product market within the meaning of Section 7 of the Clayton 
Act. In other words, in the event of a small but significant increase 
in the price of industrial RP systems, customers would not switch to 
less capable professional RP systems or to traditional technologies, 
such as machining, milling or grinding.
    The Complaint alleges that the relevant geographic market within 
the meaning of Section 7 of the Clayton Act is the United States. There 
are no imports of industrial RP systems into the United States. 
Although there are producers of industrial RP systems in other 
countries, such as Japan and Germany, patents that cover the technology 
owned by 3D and DTM have prevented importation and sale in the United 
States. Accordingly, U.S. customers are unable to turn to foreign 
producers of industrial RP systems. Therefore, a small but significant 
price increase of industrial RP systems would not cause any purchasers 
to switch to industrial RP systems manufactured outside the United 
States, let alone a sufficient number to make the price increase 
unprofitable.
    2. Anticompetitive Consequences of the Proposed Transaction. 3D and 
DTM are two of only three suppliers of industrial RP systems in the 
United States. In this highly concentrated market, 3D has approximately 
a 60% market share and DTM has approximately a 20% market share. 
Currently, 3D and DTM offer the most sophisticated systems in the 
industry and compete directly against each other in the development, 
manufacture and sale of industrial RP systems. Competition for 
innovations and improvements is evidenced by the many RP-related 
patents obtained by the defendants. This competition has been the 
driving force behind the development of innovative industrial RP system 
technology, which has enabled the industry to develop a less costly 
method of creating prototypes.
    The proposed acquisition would substantially increase concentration 
in an already highly concentrated market. The proposed acquisition 
would raise the combined firm's share of industry sales to the level 
where it would have the ability profitably to raise prices. 3D and 
DTM's customers would not switch to the one remaining industrial RP 
systems producer in sufficient numbers to make unprofitable a 
significant price increase imposed by the combined firm.
    Entry into the industrial RP systems market is difficult, time 
consuming, and expensive and would not deter the exercise of market 
power caused by 3D's acquisition of DTM. It would take well over two 
years, and substantial costs, for a new entrant to create the 
sophisticated and advanced technological capabilities needed to develop 
and manufacture industrial RP systems.
    3D and DTM each hold an extensive array of patents to the 
prevailing technology used in industrial RP systems. The patent 
positions of 3D and DTM prevent other industrial RP systems producers 
from competing in the United States. In combination, the acquisition 
would enhance 3D's already strong patent portfolio.
    The competition between 3D and DTM has benefitted users of 
industrial RP systems through lower prices for systems, lower prices 
for materials, and improved products. For these reasons, the United 
States concluded that 3D's acquisition of DTM, as originally 
structured, would substantially lessen competition in the development, 
manufacture and sale of industrial RP systems in violation of Section 7 
of the Clayton Act.
III. Explanation of the Proposed Final Judgment
    The proposed Final Judgment is designed to ensure that competition 
that would have otherwise been eliminated as a result of the proposed 
acquisition will be preserved. To maintain competition in the 
industrial RP systems market, the proposed Final Judgment lifts the 
patent entry barriers for a firm that is currently prevented from 
selling its industrial RP systems in the United States. Licensing an 
acquirer that currently manufactures industrial RP systems and enabling 
it to compete in the U.S. market will restore the competition that 
would otherwise be lost by reason of the merger of 3D and DTM. Outside 
of the United States, defendants face vigorous competition from 
companies such as Electro Optical Systems, based in Germany, and Teijin 
Seiki, based in Japan. Under the proposed Final Judgment, defendants 
must grant a license to one such firm so that it will be able to 
compete in the U.S. market. Thus, after the merger, there will still be 
three competitors in the U.S. market for industrial RP systems.

[[Page 49210]]

    Specifically, the proposed Final Judgment requires defendants to 
grant the acquirer a perpetual, assignable, transferable, non-exclusive 
license to develop, test, product, market, sell, or distribute, and to 
supply any support or maintenance services for, products under both 
firms' RP patent portfolios. Defendants must license both 3D's and 
DTM's full industrial RP-related patent portfolios to ensure that the 
acquirer has the full range of necessary technology to produce and sell 
RP systems in the United States. This license will be limited to a 
specific field of RP technology to match the RP technology employed by 
the acquirer. The proposed Final Judgment also requires defendants to 
provide the acquirer with a list of all North American purchasers that 
utilize the acquirer's technology and field of use under the license. 
In addition, the acquirer will have the option to purchase DTM's 
assembly plant, located in Austin, Texas.
    Under the proposed Final Judgment, defendants must provide the 
acquirer with all software copyright licenses needed to purchase and 
resell both defendants' used industrial RP systems in North America. 
The acquirer will therefore be able to offer to take the defendants' 
systems as ``trade-ins'' on its own equipment, and then resell 
defendants' systems as used equipment.
    The proposed Final Judgment bars the defendants from asserting 
against the acquirer any claims for patent or copyright infringement in 
North America for products under the licenses granted, or any claims 
that any equipment, systems, supplies, software, processes or other 
technology currently sold by the acquirer outside of North America 
infringe any of defendants' patents or copyrights in North America. 
These provisions ensure that the acquirer will be able to import its 
current RP systems into the U.S. market, without the threat of patent 
or copyright litigation from the defendants.
    In order to ensure a capable competitor, defendants must license 
their RP patents portfolios to a company that currently manufactures RP 
systems. The divestiture required by the proposed Final Judgment must 
be to an acquirer acceptable to the United States in its sole 
discretion. Specifically, in the United States' sole judgment, the 
acquirer must have the intent and capability of competing effectively 
in the business of servicing and selling industrial RP systems in the 
United States.
    The defendants must use their best efforts to complete the 
divestiture required by the proposed Final Judgment as expeditiously as 
possible. Unless the United States grants an extension of time, the 
divestiture must be completed within one hundred twenty (120) calendar 
days after the filing of the proposed Final Judgment, or five (5) days 
after notice of entry of the Final Judgment by the Court, whichever is 
later. If the defendants fail to accomplish the divestiture within this 
time period, then the proposed Final Judgment calls for the Court, upon 
the United States' application, to appoint a trustee nominated by the 
United States to effect the divestiture. If a trustee is appointed, the 
defendants are to cooperate fully with the trustee and pay all costs 
and expenses of the trustee and any persons retained by the trustee. 
The compensation paid to the trustee and any persons retained by the 
trustee shall be both reasonable in light of the value of the 
divestiture assets, and based on a fee arrangement providing the 
trustee with an incentive based on the price and terms of the 
divestiture and the speed with which it is accomplished. After 
appointment, the trustee will file monthly reports with the United 
States, defendants and the Court, setting forth the trustee's efforts 
to accomplish the divestiture ordered under the proposed Final 
Judgment. If the trustee has not accomplished the divestiture within 
six (6) months after its appointment, the trustee shall promptly file 
with the Court a report setting forth (1) the trustee's efforts to 
accomplish the required divestiture, (2) the reasons, in the trustee's 
judgment, why the required divestiture has not been accomplished, and 
(3) the trustee's recommendations. At the same time the trustee will 
furnish this report to the United States and defendants, who will each 
have the right to be heard and to make additional recommendations.
IV. Remedies Available to Potential Private Litigants
    Section 4 of the Clayton Act, 15 U.S.C. 15, provides that any 
person who has been injured as a result of conduct prohibited by the 
antitrust laws may bring suit in federal district court to recover 
three times the damages the person has suffered, as well as the costs 
of bringing a lawsuit and reasonable attorneys' fees. Entry of the 
proposed Final Judgment will neither impair nor assist the bringing of 
any private antitrust damage action. Under the provisions of Section 
5(a) of the Clayton Act, 15 U.S.C. 16(a), the proposed Final Judgment 
has no effect as prima facie evidence in any subsequent private lawsuit 
that may be brought against defendants.
V. Procedures Available for Modification of the Proposed Final Judgment
    The United States and the defendants have stipulated that the 
proposed Final Judgment may be entered by this Court after compliance 
with the provisions of the APPA, provided that the United States has 
not withdrawn its consent. The APPA conditions entry of the decree upon 
this Court's determination that the proposed Final Judgment is in the 
public interest.
    The APPA provides a period of at least sixty (60) days preceding 
the effective date of the proposed Final Judgment within which any 
person may submit to the United States written comments regarding the 
proposed Final Judgment. Any person who wishes to comment should do so 
within sixty (60) days of the date of publication of this Competitive 
Impact Statement in the Federal Register. The United States will 
evaluate and respond to the comments. All comments will be given due 
consideration by the Department of Justice, which remains free to 
withdraw its consent to the proposed Final Judgment at any time prior 
to entry. The comments and the response of the United States will be 
filed with this Court and published in the Federal Register. Written 
comments should be submitted to: J. Robert Kramer, II, Chief, 
Litigation II Section, Antitrust Division, United States Department of 
Justice, 1401 H Street, NW., Suite 3000, Washington, DC 20530.
    The proposed Final Judgment provides that this Court retains 
jurisdiction over this action, and the parties may apply to this Court 
for any order necessary or appropriate for the modification, 
interpretation, or enforcement of the Final Judgment.
VI. Alternatives to the Proposed Final Judgment
    The United States considered, as an alternative to the proposed 
Final Judgment, a full trial on the merits against defendants. The 
United States is satisfied, however, that the removal of existing 
patent entry barriers through the required license to allow a firm that 
currently manufactures industrial RP systems to compete in the U.S. 
market, and other relief contained in the proposed Final Judgment, will 
establish, preserve and ensure a viable competitor in the development, 
manufacture and sale of industrial RP systems. Thus, the United States 
is convinced that the proposed Final Judgment, once implemented by the 
Court, will prevent 3D's acquisition of DTM from having adverse 
competitive effects.

[[Page 49211]]

VII. Standard of Review Under the APPA for Proposed Final Judgment
    The APPA requires that proposed consent judgments in antitrust 
cases brought by the United States be subject to a sixty (60) day 
comment period, after which the court shall determine whether entry of 
the proposed Final Judgment is ``in the public interest.'' In making 
that determination, the court may consider--

    (1) the competitive impact of such judgment, including 
termination of alleged violations, provisions for enforcement and 
modification, duration or relief sought, anticipated effects of 
alternative remedies actually considered, and any other 
considerations bearing upon the adequacy of such judgment;
    (2) the impact of entry of such judgment upon the public 
generally and individuals alleging specific injury from the 
violations set forth in the complaint including consideration of the 
public benefit, if any, to be derived from a determination of the 
issues at trial.

15 U.S.C. 16(e) (emphasis added). As the Court of Appeals for the 
District of Columbia has held, the APPA permits a court to consider, 
among other things, the relationship between the remedy secured and the 
specific allegations set forth in the government's complaint, whether 
the decree is sufficiently clear, whether enforcement mechanisms are 
sufficient, and whether the decree may positively harm third parties. 
See United States  v. Microsoft Corp., 56 F.3d 1448, 1458-62 (D.C. Cir. 
1995).
    In conducting this inquiry, ``the Court is nowhere compelled to go 
to trial or to engage in extended proceedings which might have the 
effect of vitiating the benefits of prompt and less costly settlement 
through the consent decree process.'' \1\ Rather,
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    \1\ 119 Cong. Rec. 24,598 (1973). See United States v. Gillette 
Co., 406 F. Supp. 713, 715 (D. Mass. 1975). A ``public interest'' 
determination can be made properly on the basis of the Competitive 
Impact Statement and Response to Comments filed pursuant to the 
APPA. Although the APPA authorizes the use of additional procedures, 
those procedures are discretionary (15 U.S.C. 16(f)). A court need 
not invoke any of them unless it believes that the comments have 
raised significant issues and that further proceedings would aid the 
court in resolving those issues. See H.R. Rep. No. 93-1463, 93rd 
Cong. 2d Sess. 8-9 (1974), reprinted in 1974 U.S.C.C.A.N. 6535, 
6538.

absent a showing of corrupt failure of the government to discharge 
its duty, the Court, in making its public interest finding, should * 
* * carefully consider the explanations of the government in the 
competitive impact statement and its responses to comments in order 
to determine whether those explanations are reasonable under the 
---------------------------------------------------------------------------
circumstances.\2\

    \2\ United States v. Mid-America Dairymen, Inc., 1977-1 Trade 
Cas. (CCH) para. 61,508, at 71,980 (W.D. Mo. 1977); see also United 
States v. Loew's Inc., 783 F. Supp. 21, 214 (S.D.N.Y. 1992); United 
States v. Columbia Artists Mgmt., Inc., 662 F. Supp. 865, 870 
(S.D.N.Y. 1987).
---------------------------------------------------------------------------

    Accordingly, with respect to the adequacy of the relief secured by 
the decree, a court may not ``engage in an unrestricted evaluation of 
what relief would best serve the public.'' United States v. BNS, Inc., 
858 F.2d 456, 462-63 (9th Cir. 1988), quoting United States v. Bechtel 
Corp., 648 F.2d 660, 666 (9th Cir.), cert. denied, 454 U.S. 1083 
(1981); see also Microsoft, 56 F.3d at 1458. Precedent requires that

[t]he balancing of competing social and political interest affected 
by a proposed antitrust consent decree must be left, in the first 
instance, to the discretion of the Attorney General. The court's 
role in protecting the public interest is one of insuring that the 
government has not breached its duty to the public in consenting tot 
he decree. The court is required to determine not whether a 
particular decree is the one that will best serve society, but 
whether the settlement is ``within the reaches of the public 
interest.'' More elaborate requirements might undermine the 
effectiveness of antitrust enforcement by consent decree.\3\
---------------------------------------------------------------------------

    \3\ United States v. Bechtel Corp., 648 F.2d at 666 (citations 
omitted) (emphasis added); see United States v. BNS, Inc., 858 F.2d 
at 463; United States v. National Broadcasting Co., 449 F. Supp. 
1127, 1143 (C.D. Cal. 1978); United States v. Gillette Co., 406 F. 
Supp. at 716. See also United States v. American Cyanamid Co., 719 
F.2d 558, 565 (2d Cir. 1983), cert. denied, 465 U.S. 1101 (1984).

    The proposed Final Judgment, therefore, should not be reviewed 
under a standard of whether it is certain to eliminate every 
anticompetitive effect of a particular practice or whether it mandates 
certainty of free competition in the future. Court approval of a final 
judgment requires a standard more flexible and less strict than the 
standard required for a finding of liability. A ``proposed decree must 
be approved even if it falls short of the remedy the court would impose 
on its own, as long as it falls within the range of acceptability or is 
`within the reaches of public interest.' '' \4\
---------------------------------------------------------------------------

    \4\ United States v. American Tel. & Tel. Co., 552 F. Supp. 131, 
151 (D.D.C. 1982) (quoting Gillette, 406 F. Supp. at 716), aff'd sub 
nom. Maryland v. United States, 460 U.S. 1001 (1983); United States 
v. Alcan Aluminum, Ltd., 605 F. Supp. 619, 622 (W.D. Ky. 1985); 
United States v. Carrols Dev. Corp., 454 F. Supp. 1215, 1222 
(N.D.N.Y. 1978).
---------------------------------------------------------------------------

    Moreover, the court's role under the APPA is limited to reviewing 
the remedy in relationship to the violations that the United States 
alleges in its Complaint, and does not authorize the court to 
``construct [its] own hypothetical case and then the decree against 
that case.'' Microsoft, 56 F.3d at 1459. Because the ``court's 
authority to review the decree depends entirely on the government's 
exercising its prosecutorial discretion by bringing a case in the first 
place,'' it follows that the court ``is only authorized to review the 
decree itself,'' and not to ``effectively redraft the complaint'' to 
inquire into other matters that the United States might have but did 
not pursue. Id.
VIII. Determinative Documents
    There are no determinative materials or documents within the 
meaning of the APPA that were considered by the United States in 
formulating the proposed Final Judgment.

    Dated: September 4, 2001. Washington DC.
Respectfully submitted,
Dando B. Cellini,
  
Stephen A. Harris,
U.S. Department of Justice, Antitrust Division, Litigation II Section, 
1401 H Street, NW, Suite 3000, Washington, DC 20530, 202-307-0729.

Certificate of Service

    I hereby certify that I caused a copy of the foregoing Competitive 
Impact Statement to be served on all parties to this proceeding, by 
facsimile transmission or by mail, on this 4th day of September 2001.

Stephen A. Harris,

[FR Doc. 01-23999 Filed 9-25-01; 8:45 am]
BILLING CODE 4410-11-M