Presenting a live 90-minute webinar with interactive Q&A 3D Printing: Evaluating Product Safety and Liability Risks, Avoiding and Defending Claims Mitigating Manufacturer Risks With Quality Control Measures, Product Monitoring, Insurance Coverage and Contract Provisions THURSDAY, JANUARY 28, 2016 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: Matthew D. Jacobson, Reed Smith , Washington, D.C. Colin K. Kelly, Partner, Alston & Bird , Atlanta Brandan P . Mueller, Partner, Husch Blackwell , St. Louis The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .
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3D Printing Background and Basics Brandan Mueller Partner HUSCH BLACKWELL LLP 5
̶ ̶ ̶ State of 3D Printing 3D Printing Applications Fashion: Jewelry Dresses Shoes Food Aerospace Homes Prototyping 6
̶ ̶ ̶ ̶ ̶ State of 3D Printing 3D Printing Applications Pharmaceutical Medical Orthopedics/prosthetics Dental implants Prototyping surgical operations/surgical planning Skeletal reconstruction Tissue and organ replication (ear, nose, body parts) Hobby 7
̶ ̶ ̶ ̶ State of 3D Printing As of 2014: 80,000 industrial printers worldwide since 1988 140,000 desktop printers sold in 2014 alone 38% of industrial printers are in U.S. Japan is 2 nd China is 3 rd Total market as of 2014: $4.1B (includes prototyping + other non-commercial uses) ̶ $2B in products 8
State of 3D Printing Standards being formulated 9
State of 3D Printing 3D Printing Technologies ̶ Blown Powder: Metal powder blown coaxially to the laser beam which melts the particles on a base metal to form a metallurgical bond when cooled ̶ Thermal Extrusion: Thermoplastic filaments heated through a nozzle ̶ Stereolithography: UV-light 10
State of 3D Printing 3D Printing Technologies (cont’d) A laser or ̶ Selective Laser Melting (SLM); Selective electron beam Laser Sintering (SLS); Electron Beam melts or sinters powder (metal or Melting (EBM) plastic parts) ̶ Ink-jetting Photopolymer process: Tiny droplets of liquid photopolymer onto a tray & cured with UV-light 11
State of 3D Printing Snapshot of the 3D Printer Players 12
State of 3D Printing 3D Printer Materials 13
State of 3D Printing 14
State of 3D Printing Impact on Manufacturing ̶ No entry barriers ̶ Digital scans/digital blueprints replace products ̶ Mass customization possible ̶ File sharing ramifications 15
State of 3D Printing Impact on Manufacturing ̶ Reduced shipping and production costs ̶ Reduced logistic footprint ̶ Potential applications (limitless) ̶ Customers replace manufacturers 16
State of 3D Printing 17
$ Legal Issues Imports/Exports Regulatory Food and Drug Commercial Administration (FDA) Contracts Tax Treatment & Accounting of Print-to-Order Revenue Licensing Packaging & Agreements Transportation Product & Environmental Healthcare Regulations Intellectual Property Products Liability Higher Education 18
Are Existing Product Liability Laws Adequate for 3D Printed Products? Different Perspectives: § Printer Manufacturer § End User § Software Company/Designer 19
3D Printer Manufacturer Perspective 20
Printer Manufacturers The new boss is the same as the old boss… for the most part. 3D Printer manufacturers most likely to: ̶ Be a “seller” of goods; and ̶ Fall within traditional warranty considerations. 21
̶ ̶ Printer Manufacturers A Good Fit (But Not Perfect) for Traditional PL Concepts: Printer likely: to be used as intended and marketed To require/contain warnings Printer not likely: to be altered 22
̶ ̶ Printer Manufacturers Clearer Picture…. Liability possible with: the operation of the printer the warnings/instructions Murkiness Comes in with…. The product that is printed! Most likely to be the cause of any harm. 23
̶ ̶ ̶ Printer Manufacturers Why May Current PL Concepts Not Apply? Printer makes the product as intended Printer makes the product according to specification Defect in the Printer vs. Defect in the Product 24
̶ Printer Manufacturers Why May Current PL Concepts Not Apply? Foreseeability Product User Misuse 25
End User Perspective Colin K. Kelly, Partner ALSTON & BIRD LLP 26
“[O]ver time, [] hobbyist inventors will start selling some of the complex, sophisticated, and dangerous products they create, and certain individuals who purchase their creations will, unfortunately but inevitably, sustain injuries. . . . [I]n many instances, no one will be strictly liable for these injuries under current [product liability] doctrine. ” Nora Freeman Engstrom, 3-D Printing and Product Liability: Identifying the Obstacles , 162 U. PA. L. REV. ONLINE 35, 37 (2013). 27
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̶ ̶ Current Strict Liability Laws Restatement (Second) of Torts § 402A “One who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused . . . if the seller is engaged in the business of selling such a product . . . .” Restatement (Third) of Torts § 1 “One engaged in the business of selling or otherwise distributing products who sells or distributes a defective product is subject to liability for harm to persons or property caused by the defect.” 29
̶ ̶ Consumer Expectations Test A product is “defective” under the Restatement (Second) of Torts § 402A if it is “in a condition not contemplated by the ultimate consumer.” (Comment g) The product must be “dangerous to an extent beyond that which would be contemplated by the ordinary consumer who purchases it, with the ordinary knowledge common to the community as to its characteristics.” (Comment i) 30
̶ ̶ ̶ Risk-Utility Test: Negligence A product is “defective” under the Restatement (Third) of Torts § § 1, 2 if it has a manufacturing or design defect, or if it is accompanied by an inadequate instruction or warning. Despite its “strict liability” title, determining whether a product has a defective design or an inadequate warning mimics the negligence inquiry. The Restatement (Third) “adopts a reasonableness (‘risk -utility balancing’) test as the standard for judging the defectiveness of product[s].” (Comments d and i) 31
States Applying Each Test Consumer expectations Risk-utility Arkansas, Indiana, Kansas, Alabama, Colorado, Georgia, Maryland, Nebraska, New Idaho, Kentucky, Louisiana, Hampshire, North Dakota, Massachusetts, Michigan, Oklahoma, Oregon, Rhode Minnesota, New Jersey, New Island, Tennessee, Utah, Mexico, New York, North Vermont, Wisconsin, Carolina, Ohio, Pennsylvania, Wyoming South Carolina, Texas, West Virginia Either test Alaska, Arizona, California, Neither test Connecticut, Florida * , Delaware, Iowa, Maine, Hawaii, Illinois, Mississippi, Washington Missouri, Montana, Nevada, South Dakota, Virginia 32
3D Suppliers/Manufacturers Remain Ripe Targets for Strict Liability Claims 33
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