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What Shall we do with the Drunken Sailor? Product Safety in the Aftermath of 3D Printing

  • Klaus HEINE and Shu LI

Abstract

This article contributes to the discussion about proper product safety in the wake of disruptive digital technologies. By picking the example of 3D printing we analyse why incumbent product liability law does not incentivise optimal deterrence of harmful 3D printed products. We identify the new business models associated with 3D printing as the main trigger for the non-applicability of incumbent liability law. The new business models are characterised by making no strong reference to economies of scale. As a result, the informational content of specific producers and their products is scarce and the identification of tortfeasors becomes a challenge for the legal system. While there is yet no easy solution to the problem, we provide at the end of the article an inventory of institutions that may take the lead in finding new proper liability rules and safety regulations.

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Copyright

This is an Open Access article, distributed under the terms of the Creative Commons Attribution licence (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted re-use, distribution, and reproduction in any medium, provided the original work is properly cited.

Footnotes

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*

Jean Monnet Chair of Economic Analysis of European Law at the Erasmus School of Law, Erasmus University Rotterdam, email: heine@law.eur.nl.

**

PhD candidate at Erasmus School of Law, Erasmus University Rotterdam, email: li@law.eur.nl.

Footnotes

References

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1 Calabresi, G, The Costs of Accidents (Yale University Press 1970) 2435 .

2 Miceli, T, The Economic Approach to Law (Stanford University Press 2004) 85 .

3 Reimann, M, “Liability for Defective Products at the Beginning of the Twenty-First Century: Emergence of a Worldwide Standard?” (2003) 51 American Journal of Comparative Law 751 .

4 Whincup, M, “Product Liability Laws in Common Market Countries” (1982) 19 Common Market Law Review 521 ; see also Howells, G, “Product Liability – A History of Harmonisation” in D Fairgrieve (ed), Product Liability in Comparative Perspective (Cambridge University Press 2005) 202 .

5 Recital 1 of Council Directive 85/374/EEC of 25 July 1985 on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for defective products [1985] OJ L 210.

6 Ritzer, G and Jurgenson, N, “Production, Consumption, Prosumption: The Nature of Capitalism in the Age of the Digital ‘Prosumer’” (2010) 10(1) Journal of Consumer Culture 13 .

7 Rehnberg, M and Ponte, S, “From Smiling to Smirking? 3D Printing, Upgrading and the Restructuring of Global Value Chains” (2018) 18 Global Networks 57 .

8 Gibson, I et al, Additive Manufacturing – 3D Printing, Rapid Prototyping, and Direct Digital Manufacturing (Springer 2014) 12 .

9 For example, people can easily find a CAD file through platforms like Thingiverse. Such online platforms are mostly open-sourced, which means that a design might have been remixed several times before it is downloaded by a user. For more information, see <www.thingiverse.com/> accessed 10 February 2019.

10 For the people who hold designs but not 3D printers, they can easily have the CAD file printed out by accessing printers through websites such as 3DHubs. So far, more than 1.6 million products and components for various uses have been produced through 3DHubs since 2013: see <www.3dhubs.com/> accessed 10 February 2019.

11 Recital 4 and Art 3 of Directive 85/374/EEC. See also Oettmeier, K and Hofmann, E, “Impact of Additive Manufacturing Technology Adoption on Supply Chain Management Processes and Components” (2016) 27(7) Journal of Manufacturing Technology Management 944 ; Engstrom, NF, “3-D Printing and Product Liability: Identifying the Obstacles” (2013) 162 University of Pennsylvania Law Review Online 35 .

12 Ackel, AE, “Extending Liability to Micro-Manufacturers of the Future: Applying the CASUAL Seller Exception in the Context of 3-D Printing” (2018) 8 UC Irvine Law Review 121 ; see also Engstrom, supra, note 11.

13 The term “prosumer” was firstly coined by Alvin Toffler in 1980. It refers to the production activities that are undertaken by consumers: A Toffler, “The Rise of the Prosumer” (1980) The Third Wave 265. Meanwhile the meaning of the term has been broadened and indicates cases in which ordinary individuals are largely involved in peer productions: Rayna, T and Striukova, L, “Involving Consumers: The Role of Digital Technologies in Promoting ‘Prosumption’ and User Innovation” (2016) Journal of the Knowledge Economy 1 .

14 P de Fillipi and P Troxler, “From Material Scarcity to Artificial Abundance: The Case of FabLabs and 3D Printing Technologies” in B van den Berg et al (eds), 3D Printing: Legal, Philosophical and Economic Diemensions (TMC Asser Press 2016) 65–83.

15 According to Art 2 of the Directive 85/374/EEC, “products” only refer to “movable” ones. At the level of Member States, 18 Member States adopt the same concept of product in their acts that no extra-contractual protection is offered to the injuries and damages caused by intangibles and services. In contrast, nine Member States offered extra-contractual liability. In detail, seven of nine (Germany, Estonia, France, Malta, Netherlands, Slovenia and Slovakia) ensure a fault-based tort liability toward intangibles and services. The other two (Greece and Lithuania) stretch the notion of product to intangibles and services, so that intangibles and services are subject to strict product liability in those two Member States. The extent to which digital goods fall into the category of “movable products” is a controversial issue, which is not yet decided: Commission, “Evaluation of Council Directive 85/374/EEC on the approximation of laws, regulations and administrative provisions of the Member States concerning liability for defective products” (2018) 92.

16 Engstrom, supra, note 11.

17 Brettel, M, “How Virtualization, Decentralization and Network Building Change the Manufacturing Landscape: An Industry 4.0 Perspective” (2014) 8(1) International Journal of Mechanical, Industrial Science and Engineering 37 .

18 RE Baldwin, “Global Supply Chains: Why They Emerged, Why They Matter, and Where They are Going” (2012) CEPR Discussion Paper No DP9103.

19 A Harris, “The Effects of In-home 3D Printing on Product Liability Law” (2015) 6(1) Journal of Science Policy and Governance.

20 ibid.

21 ibid.

22 C Twigg-Flesner, “Disruptive Technology – Disrupted Law? How the digital revolution affects (Contract) law” in A de Franceschi, European Contract Law and the Digital Single Market (Intersentia 2016).

23 C Twigg-Flesner, “Conformity of 3D prints – Can current Sales Law cope?” in R Schulze and D Staudenmayer (eds), Digital Revolution: Challenges for Contract Law in Practice (Nomos/Hart 2016).

24 In 2013, a CAD file for printing the plastic handgun was available online, which led to the debate on the regulation of 3D printing around the world. See Desai, DR and Magliocca, GN, “Patents, Meet Napster: 3D Printing and the Digitization of Things” (2013) 102 Georgetown Law Journal 1691 .

25 B Berman, “3-D printing: The new industrial revolution” (2012) 55 Business Horizons 155.

26 Bak, D, “Rapid Prototyping or Rapid Production? 3D Printing Processes Move Industry towards the Latter” (2003) 23(4) Assembly Automation 340 .

27 Yanisky-Ravid, S and Kwan, KS, “3D Printing the Road Ahead: The Digitization of Products When Public Safety Meets Intellectual Property Rights-A New Model” (2017) 38 Cardozo Law Review 921 .

28 Laplume, AO et al, “Global Value Chains from a 3D Printing Perspective” (2016) 47(5) Journal of International Business Studies 595 .

29 Rivera-Batiz, LA and Romer, PM, “Economic Integration and Endogenous Growth” (1991) Quarterly Journal of Economics 531 .

30 Carlton, DW and Perloff, JM, Modern Industrial Organization (4th edn, Pearson 2004) .

31 Petrick, IJ and Timothy, WS, “3D Printing Disrupts Manufacturing: How Economies of One Create New Rules of Competition” (2013) 56 Research-Technology Management 12 .

32 Stieglitz, N and Heine, K, “Innovations and the Role of Complementarities in a Strategic Theory of the Firm” (2007) 28(1) Strategic Management Journal 1 .

33 Rabin, RL, “Some Thoughts on the Ideology of Enterprise Liability” (1996) 55 Maryland Law Review 1190 .

34 Grossman, SJ, “The Informational Role of Warranties and Private Disclosure about Product Quality” (1981) 24(3) Journal of Law and Economics 461 ; Priest, GL, “A Theory of the Consumer Product Warranty” (1981) 90(6) Yale Law Journal 1297 .

35 Wickelgren, AL, “The Inefficiency of Contractually-Based Liability with Rational Consumers” (2005) 22(1) Journal of Law, Economics, and Organization 168 ; see also Choi, AH and Spier, KE, “Should Consumers be Permitted to Waive Products Liability? Product Safety, Private Contracts, and Adverse Selection” (2014) 30(4) Journal of Law, Economics, and Organization 734 .

36 For an overview of the legislative process across the Europe, see Whincup, supra, note 4; Howells, supra, note 4.

37 Directive 85/374/EEC, supra, note 5.

38 Arlen, J, “Economic Analysis of Tort Liability for an Imperfect World” in F Parisi (ed), The Oxford Handbook of Law and Economics (Oxford University Press 2017) .

39 Calabresi, supra, note 1, 139.

40 Priest, GL, “The Invention of Enterprise Liability: A Critical History of the Intellectual Foundations of Modern Tort Law” (1985) 14(3) Journal of Legal Studies 461 .

41 Harris, supra, note 19.

42 Priest, GL, “The Modern Expansion of Tort Liability: Its Sources, Its Effects, and Its Reform” (1991) 5(3) Journal of Economic Perspectives 31 ; see also Calabresi, supra, note 1, 40.

43 Daughety, AF and Jennifer, FR, “Economic analysis of products liability: theory” in Jennifer Arlen (ed), Research Handbook on the Economics of Torts (Edward Elgar 2013) 6996 .

44 Shavell, S, Foundations of Economic Analysis of Law (Harvard University Press 2004) 221 .

45 Spence, M, “Consumer Misperceptions, Product Failure and Producer Liability” (1977) 44(3) The Review of Economic Studies 561 ; Polinsky, AM, “Strict Liability vs. Negligence in a Market Setting” (1980) 70(2) The American Economic Review 363 ; Geistfeld, MA, “Products Liability” in M Faure (ed), Tort Law and Economics (Edward Elgar 2009) .

46 The New Legislative Framework consists of three pillars: Regulation (EC) No 765/2008 of the European Parliament and of the Council of 9 July 2008 setting out the requirements for accreditation and market surveillance relating to the marketing of products and repealing Regulation (EEC) No 339/93 [2008] OJ L 218; Decision No 768/2008/EC of the European Parliament and of the Council of 9 July 2008 on a common framework for the marketing of products, and repealing Council Decision 93/465/EEC [2008] OJ L 218; and Regulation (EC) No 764/2008 of the European Parliament and of the Council of 9 July 2008 laying down procedures relating to the application of certain national technical rules to products lawfully marketed in another Member State and repealing Decision No 3052/95/EC [2008] OJ L 218. Aligned with these, a bundle of directives and regulations in specific sectors are also promulgated. Under this framework a wide array of regulatory instruments, ranging from market surveillance rules to particular conformity assessments, are provided to ensure producers place safe products in the common market.

47 Art 30 of Regulation (EC) 765/2008.

48 ICSMS serves as a networking system through which surveillance authorities are able to exchange information. By doing so, information can be exchanged among various surveillance bodies in a fast and transparent way. The details are available at <webgate.ec.europa.eu/icsms/>.

49 RAPEX refers to the “rapid alert system” across the EU. Under this system, if a manufacturer finds its products are not safe, it has to withdraw and recall these products and notify the national authorities. The national authorities will then notify the EU, who will swiftly report this issue online. See Arts 11–13, Directive 2001/95/EC of the European Parliament and of the Council of 3 December 2001 on general product safety [2001] OJ L11.

50 The requirement of CE marking is specifically determined by the bundle of directives under the “New Legislative Framework”. For guidance on the implementation of CE marking, see Commission, “The ‘Blue Guide’ on the Implementation of EU Product Rules” 2016/C 272/01.

51 Petrick and Timothy, supra, note 31.

52 Lemley, MA, “IP in a World without Scarcity” (2015) 90 New York University Law Review 460 .

53 Berman, supra, note 25.

54 Maric, J et al, “Frugal innovations and 3D printing: insights from the field” (2016) 3 Journal of Innovation Economics & Management 57 .

55 Rayna, T and Striukova, L, “From Rapid Prototyping to Home Fabrication: How 3D Printing is Changing Business Model Innovation” (2016) 102 Technological Forecasting and Social Change 214 .

56 Weller, C, “Economic Implications of 3D Printing: Market Structure Models in light of Additive Manufacturing Revisited” (2015) 164 International Journal of Production Economics 43 .

57 Ben-Ner, A and Siemsen, E, “Decentralization and Localization of Production: The Organizational and Economic Consequences of Additive Manufacturing (3D Printing)” (2017) 59(2) California Management Review 5 .

58 Bogers, M et al, “Additive Manufacturing for Consumer-Centric Business Models: Implications for Supply Chains in Consumer Goods Manufacturing” (2016) 102 Technological Forecasting and Social Change 225 .

59 Petrick and Timothy, supra, note 31.

60 For the literature on 3D printing and intellectual property law, see Doherty, D, “Downloading Infringement: Patent Law as a Roadblock to the 3D Printing Revolution” (2012) 26 Harvard Journal of Law and Technology 353 ; see also Depoorter, B, “Intellectual Property Infringements & 3D Printing: Decentralized Piracy” (2013) 65 Hastings Law Journal 1483 .

61 Harris, supra, note 19.

62 Harris, supra, note 19.

63 Heine, K and Kerk, M, “Conflict Resolution in Meta-organizations: the Peculiar Role of Arbitration” (2017) 6(1) Journal of Organizational Design 3 .

64 Stieglitz and Heine, supra, note 32.

65 Goldberg, JC and Zipursky, BC, “The Easy Case for Products Liability Law: A Response to Professors Polinsky and Shavell” (2010) 123(8) Harvard Law Review 1919 .

66 Marucheck, A et al, “Product Safety and Security in the Global Supply Chain: Issues, Challenges and Research Opportunities” (2011) 29(7–8) Journal of Operations Management 707 .

67 Beck, JM and Jacobson, MD, “3D Printing: What Could Happen to Products Liability When Users (and Everyone Else in between) Become Manufacturers” (2017) 18 Minnesota Journal of Law, Science & Technology 143 .

68 Comerford, PJ and Belt, EP, “3DP, AM, 3DS and Product Liability” (2015) 55 Santa Clara Law Review 821 .

69 Art 14 of the Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (Directive on electronic commerce) [2000] OJ L 178.

70 Twigg-Flesner, supra, note 23.

71 Harris, supra, note 19.

72 A couple of ideas of how a liability regime for online platforms might look have been presented. See A de Streel et al, “Liability of internet platforms: should exceptionalism end?” (2018) CERRE Report; see also O Lobel, “The Law of the Platform” (2016) 101 Minnesota Law Review 87.

74 In 2016 the Commission started an evaluation of the EPLD to examine whether it is still efficient in the era where disruptive technologies are widely adopted. The final report was released in May 2018, supra, note 15.

75 MU Scherer, “Regulating Artificial Intelligence Systems: Risks, Challenges, Competencies, and Strategies” (2016) 29(2) Harvard Journal of Law & Technology 376.

76 ibid, p 381.

77 ibid, p 388.

* Jean Monnet Chair of Economic Analysis of European Law at the Erasmus School of Law, Erasmus University Rotterdam, email: .

** PhD candidate at Erasmus School of Law, Erasmus University Rotterdam, email: .

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