A legal dispute between Fortis Advisors LLC, representing former shareholders of Origin Laboratories, and 3D printing stalwart Stratasys Ltd.has escalated with a new fraud lawsuit filed in December 2024.The case, filed in the U.S.
District Court for the Northern District of California, alleges that Stratasys engaged in fraudulent conduct to withhold payments and mislead the former Origin shareholders.This lawsuit follows an earlier 2023 lawsuit that sought arbitration over Stratasys’ alleged breach of contract related to the earn-out payments.Notably, the fraud lawsuit is also filed against Stratasys CEO Yoav Zeif personally.
Background of the Dispute In 2020, Stratasys acquired Origin, a startup specializing in digital light processing (DLP) technology, for a total consideration of up to $100 million, including an upfront payment and an earn-out structure based on revenue targets.The dispute stems from disagreements over the start date and calculation of the earn-out period.According to the original lawsuit, filed in 2023, Stratasys allegedly delayed product launches and manipulated revenue accounting to limit the earn-out payments owed to Origin’s former shareholders.
The acquisition of Origin by Stratasys.Image courtesy of Business Wire Fortis Advisors asserted that Stratasys initially agreed to begin tracking earn-out payments from the point when Origin’s products became “generally available” in February 2022.However, Stratasys later maintained that the earn-out period commenced on July 1, 2021, months before product commercialization, effectively reducing the window in which Origin’s revenue could contribute toward the earn-out targets.
Fortis argued that this retroactive decision was an intentional effort to withhold payments and constitutes a breach of contract.Legal Proceedings and Arguments Stratasys responded by countersuing the Origin shareholders personally, along with Fortis, in an attempt to halt the arbitration process.However, the Delaware Chancery Court ruled against Stratasys in 2023, allowing the arbitration to proceed and ordering Stratasys to cover the Origin shareholders’ legal fees.
The court also prevented Stratasys from involving the individual Origin shareholders in further litigation, restricting the dispute to Fortis Advisors as the plaintiff.While the arbitration continued, Fortis filed an additional lawsuit for fraud in December 2024 after Stratasys attempted to block the fraud-related claims from being addressed in arbitration.This resulted in two separate legal actions against Stratasys: the ongoing arbitration and a fraud lawsuit filed in the U.S.
District Court.The fraud case specifically targets both Stratasys as a corporation and Yoav Zeif personally, further escalating the conflict, stating: “…Zeif has repeatedly demonstrated broad decision-making powers and authority on behalf of Stratasys, including with respect to all sorts of issues relating to the relaunch of the Origin One printer.Without seeking or requiring the board’s approval, Zeif has (i) made decisions regarding the production and sale of the Origin One printers, (ii) directed the Origin team to develop new hardware, (iii) allocated resources to address and resolve manufacturing and performance issues as they arose, (iv) directed the Origin team to prioritize a separate product targeting the dental industry over the Origin One printer, (v) restarted production, and (vi) set the GA Date.” Yoav Zeif, CEO of Stratasys, at Additive Manufacturing Strategies 2024 alongside 3DPrint.com Executive Editor Joris Peels.
Image courtesy of Ashley Alleyne.Stratasys has moved to stay the litigation, citing the Federal Arbitration Act (FAA), and contends that the dispute should be resolved through arbitration.Fortis has countered Stratasys’ motion, arguing that the company’s insistence on arbitration now constitutes a delay tactic intended to avoid a court ruling on the merits of the case.
Fortis characterizes this legal strategy as “procedural brinksmanship,” accusing Stratasys of selectively invoking arbitration provisions to stall adjudication.The arbitration hearing before the International Centre for Dispute Resolution (ICDR) is scheduled for July 2025.In the meantime, the U.S.
District Court will determine whether the fraud lawsuit should proceed independently of arbitration.Fortis is seeking damages, attorneys’ fees, and a ruling that Stratasys’ actions amounted to a fraudulent scheme to avoid financial obligations to Origin’s former shareholders.With a case management conference scheduled for March 2025, the Northern District of California court will soon determine whether Fortis’ fraud lawsuit proceeds alongside arbitration or remains paused until the July 2025 ICDR hearing.
The outcome will influence whether former Origin shareholders can pursue additional legal remedies outside arbitration.Implications for Stratasys and the AM Industry This lawsuit comes at a pivotal moment for Stratasys, which has faced increasing financial and competitive pressures.In early 2025, the company secured a $120 million investment from private equity firm Fortissimo Capital.
While positioned as a strategic capital infusion, some analysts have raised concerns about Stratasys’ financial outlook and questioned the timing of the investment.Additionally, the broader 3D printing sector is experiencing significant consolidation and competition, with companies such as Bambu Lab challenging Stratasys’ market position in the low-end material extrusion space.Stratasys’ ongoing legal battles, including previous takeover attempts and contested mergers, add to the uncertainty surrounding the company’s future.
The outcome of these cases could impact Stratasys’ financial liabilities and its ability to navigate upcoming business decisions, including potential acquisitions or strategic shifts in its technology portfolio.The world of business being as complicated as it is, lawsuits can often help injure a company to the point that they may be forced to sell to a more powerful party.In the case of Stratasys, the natural acquiring body would be HP, given their long history.
However, as Velo3D demonstrated with Arrayed Additive, there are more surprising possibilities.An unknown firm, possibly with outside business interests could step in to disrupt the entire industry.Or we might expect a larger conglomerate with no previous AM investments to jump in and purchase the 3D printing sector’s most valuable company.
Regardless of what happens, a meaningless tidbit readers could consider wedging into their subconscious is the following coincidences: Stratasys’s leading extrusion 3D printer line is Fortus, while Origin Shareholders are being represented by Fortis Advisors.Additionally, Stratasys recently received an investment from Fortissimo.Fortus, Fortis, Fortissimo (FFF).
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