Stephen G.A. Myers and Kelly E. Brilleaux

/ Summer Business Edition 2016

If you believe the news, 3D printing (also known as additive manufacturing) will change virtually every aspect of your life in the next three to five years. News articles suggest that everything from a four-year-old’s next favorite toy to the prescription medicines that we take to the replacement parts needed for our cars will be 3D-printed in the near future. Some have argued that 3D printing will impact manufacturing on the same scale that the personal computer affected the office environment. One open question, however, that companies must begin to evaluate is how corporate exposure and liability issues will evolve as product liability lawsuits begin to surface involving 3D-printed products.

TRADITIONAL MANUFACTURING AND THE APPLICABLE LEGAL PARADIGM

In a traditional manufacturing environment, mass production is the norm. Customization of products is a challenge because often an entire manufacturing and quality system must be reconfigured to accommodate the type of variation needed for customization. 

It is from this traditional environment that product liability law developed and upon which product liability theories of recovery are predicated. Products are uniform, mass-produced, and based on a single design as captured in the manufacturing specifications. Liability theories are stated within this paradigm. For example, the Restatement (Third) of Torts describes theories of recovery based on whether a product deviated from a manufacturing specification (manufacturing defect), whether the risks associated with the product’s design specifications exceeded the benefits (design defect), and whether the product required a specific warning to be used in a safe manner (inadequate warning). 

The paradigm is also premised on the idea that manufacturers tend to be larger corporate entities that have resources to research, design, manufacture, and often sell the products directly to consumers. These separate-but-related activities tend to be performed by the same entity, the “manufacturer.” This centralization of this activity also supports an underlying premise of product liability law that a “manufacturer” is in the best position to ensure that safe products reach the marketplace.

WHY DOES 3D PRINTING ALTER THE LEGAL LANDSCAPE? 

In theory, 3D printing has the potential to reduce an entire manufacturing facility into a single 3D printer that might range in size from a desk to a desktop. “Manufacturing” then becomes as easy as hitting a button from within computer-aided-design (CAD) software after the product has been digitally designed. Not unlike paper printers, computer software then communicates the required output to a 3D printer, which “manufactures” the tangible product. There are a variety of methods in which 3D printers operate, but all tend to involve the depositing of material, layer by layer until the final product is achieved. 

Fundamental differences between additive manufacturing and traditional manufacturing are cost and dexterity. No longer is a large company’s capital investment or expansive resources needed to manufacture a product, nor is there a significant, incremental cost to generate a customized product. 

HOW MIGHT THE TECHNOLOGY CHANGE THE EXISTING LEGAL FRAMEWORK?

Two aspects of additive manufacturing are likely to have the most significant impact on product liability law: 1) the mass customization of products, and 2) the inevitable disassociation of product design, manufacturing, and sales.

» Mass Customization
As mentioned, product liability law is predicated on a mass-production environment. In that setting, manufacturing specifications are typically uniform, and, thus, it is relatively straightforward to evaluate whether a product complies with its manufacturing specifications. Likewise, a risk-benefit analysis of an overarching design (as defined by product specifications) is possible among a broad population of users to determine whether a particular design is “defective.” 

A major advantage of 3D printing is its ability to generate customized products for specific needs. But product liability law has difficulties in these situations. For example, it is not clear how a design-defect theory works in the customized-product setting. If a person is injured by a customized product, the risks will always appear to outweigh the benefit. There is no broader population of users available to demonstrate the principle that widespread benefits outweigh certain risks that occurred under particular circumstances. Moreover, the manufacturing specifications themselves become murky. And evidentiary and spoliation issues begin to arise regarding whether a customized product manufacturer should have a duty to preserve files and software related to every customized product that it makes. 

» The Fracture of Design and Manufacturing
While a single manufacturer has historically been responsible for both the design and the manufacture of a product, 3D printing makes a disassociation of these activities more likely. Individual engineers can perform design work on computer platforms and simply sell the computer model to anyone who owns a 3D printer. This raises the issue of which “manufacturer” is responsible under product liability law if an injury occurs. Further, many corporations, such as UPS, are now offering 3D-printing services. But when someone inevitably is injured by a product that is designed by a third party but printed by UPS, does UPS become the responsible “manufacturer” because it printed the product, notwithstanding the fact that UPS likely knew nothing about the design or safety profile of the product? Is UPS now responsible for providing adequate warnings to the end user, as a traditional “manufacturer” would be? These sorts of permutations are endless and are likely to begin to surface in litigation as 3D printing becomes more widespread.

CONCLUSIONS

The preceding issues have yet to be addressed by a majority of courts—our research reveals only one decision addressing liability for a 3D-printed product: the Invisalign orthodontic system. But the case focused on allegations of misrepresentation regarding the effectiveness of the system, as opposed to more product-oriented allegations, the sort that we have raised here. 

Despite a dearth of legal authority on the subject, there are commonsense steps that corporate manufacturers should keep in mind when venturing into these untested waters:

  1. Ask in-house or external counsel about the potential ramifications of new business ventures employing additive manufacturing, and consider whether the new venture could subject the company to a new type of exposure, such as strict product liability.
  2. Re-evaluate hold-harmless and indemnity agreements with vendors and component-part suppliers when additive manufacturing is being used by any entity.
  3. Examine all types of corporate insurance to determine whether additive manufacturing is the subject of any exclusions or special treatment.
  4. Ensure that company employees and engineers are monitoring regulatory and trade organization activities on the subject—and updating company practices and protocols accordingly.(1)

The technology is exciting and likely to have an impact on industry and the associated legal landscape, but the age-old saying remains applicable: an ounce of prevention is worth a pound of cure.

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(1) For example, the FDA recently issued a guidance on the use of additive manufacturing with prescription medical devices entitled “Technical Considerations for Additive Manufactured Devices.” Likewise, the American Society of Testing and Materials (ASTM) held a symposium on the subject of additive manufacturing in May of 2016. ASTM is actively exploring how to implement standards in the area, which will undoubtedly appear in litigation once disseminated.