In light of the ever-expanding use of nanomaterials, both U.S. and international regulators are devoting more attention to these technologies, though in a non-coordinated and, often, piece-meal fashion.

The Complex Task of Managing Nanotechnology Risks

Nov. 4, 2015
With increased safety and health scrutiny focused on nanotechnology, what risk management steps should manufacturers take to protect themselves, customers and the environment?

The inclusion of nanotechnologies within manufacturing processes and products has increased exponentially over the past decade. Fortune recently noted that nanotechnology touches almost all Fortune 500 companies and that the industry’s $20 billion worldwide size is expected to double over the next decade.

Yet, potential safety issues have been raised and regulatory uncertainties persist. As such, proactive manufacturers seeking to protect their employees, consumers, the environment and their businesses – while continuing to develop, manufacture and market their products – may face difficult choices in how to best navigate this challenging and fluid landscape, while avoiding potential “nanotort,” whistleblower, consumer fraud and regulatory enforcement lawsuits. Doing so requires forward-thinking advice based upon detailed analyses of each manufacturer’s products and conduct in the context of rapidly evolving scientific, regulatory and legal developments. In this article, we offer considerations for manufacturers looking to benefit from these innovative processes in the face of legal uncertainty.

In reality, nanotechnology is neither a single industry nor even a specific technology. The Project on Emerging Nanotechnologies states that “nanotechnology is the art and science of manipulating matter at the nanoscale (down to 1/100,000 the width of a human hair) to create new and unique materials and products.” In 2005, NASA stated that the “long term possibilities” for nanotechnology are “truly mind-blowing,” because “when scientists can deliberately order and structure matter at the molecular level, amazing new properties sometimes emerge.”

Focusing on carbon nanotubes, for instance, NASA marveled at their properties, given that they have 100 times the tensile strength of steel but only one-sixth its weight while conducting electricity better than copper. In light of such benefits, it is clear why nanotechnologies are increasingly used by a broad swath of manufacturers – whether industrial, electrical, biomedical, consumer products, energy, transportation, clothing, shipping, food-chain, etc.

The recent exponential growth in the use of nanomaterials has caught the attention of regulators and public-interest organizations, particularly given that many tout these materials as “new” or “improved.” One consequence of marketing communications along these lines if ill-founded—aside from possibly inviting consumer-fraud litigation—is that such representations may also encourage additional health and safety scrutiny.

What has emerged from this increasing attention on nanotechnologies is an ever-changing landscape filled with scientific and regulatory uncertainties. For example, some early animal data suggested that carbon nanotubes, found in everyday items like tennis rackets, golf clubs, automobile bumpers, fragrances and heat resistant cookware, might be associated with mesothelioma, the same form of cancer associated with asbestos. Although a multitude of subsequent animal toxicology studies of nanomaterials also have reported potentially concerning findings, methodological issues and the limitations of extrapolating from animal data to humans have been raised in response. Moreover, a dearth of reliable scientific studies characterizing human and/or environmental exposures to nanoparticles currently exists. Complicating this already difficult situation, scientific debate continues over how to even define and accurately measure real-word nanoparticle exposures. 

Despite this scientific uncertainty, international organizations, such as the International Agency for Research on Cancer, have already concluded that nano titanium dioxide in its powder form and multi-walled carbon nanotube-7 (“MWCNT-7”) are “possibly carcinogenic to humans.” As such, California’s Department of Public Health lists titanium dioxide and MWCNT-7 as “ingredients known or suspected to cause cancer, birth defects, or other reproductive toxicity as determined by the authoritative scientific bodies.”  Considering that processed (i.e., non-powdered) titanium dioxide is found in products like toothpaste, shampoo, chewing gum and candies, it is not surprising that some have focused upon such statements.

In light of the ever-expanding use of nanomaterials, as well as the scientific uncertainties discussed above, both U.S. and international regulators are devoting more attention to these technologies. However, given the wide variety of nanotechnologies currently in use by a myriad of diverse industries, different regulatory agencies are approaching nanotechnologies in a non-coordinated and, often, piece-meal fashion. To that end, FDA, EPA and CDC (including NIOSH) have all indicated ongoing interest in and examination of these technologies. What these agencies have not yet provided, however, is definitive legal or regulatory guidance about how they will specifically treat emerging nanomaterials.

Although no specific regulatory paradigm yet exists, this has not stopped NIOSH from communicating that it considers “workers within nanotechnology-related industries” to “have the potential to be exposed to uniquely engineered materials with novel sizes, shapes, and physical and chemical properties,” even though health risks, exposure and toxicity research is still ongoing.

First Steps in Risk Management

In the face of these scientific and regulatory uncertainties, what can a manufacturer do today to protect employees, consumers, the environment and its own business while continuing to develop, manufacture and market products that incorporate these revolutionary and important nanotechnologies?

Not surprisingly, answering that question depends upon detailed evaluation and analyses of the specific nanotechnology at issue, and the product/processes and industry involved – all in consideration of current state-of-the-art science as well as regulatory and legal developments. One thing is certain – gone are the days when “sophisticated” manufacturers incorporating nanotechnologies within their products can reasonably expect to shield themselves by pointing to scientific and regulatory uncertainties, especially given the amount of money they are spending on research and development, as well as sales and marketing efforts.

Accordingly, manufacturers should consider undertaking meaningful risk management analyses specific to their applicable products. Comprehensively addressing all of the various components of a sound nanotechnology risk management analysis far exceeds the scope of this discussion. However, several basic aspects are worth a manufacturer’s initial consideration. 

First, manufacturers should fully understand the life-cycle of nanomaterials within their organization. For some, nanomaterials may be an explicit focus of innovation and production, making it easier to pinpoint where nanotechnology fits into their processes and products. For others, nanomaterials may exist either higher-up or in the back-end of their products’ supply chain. In either case, manufacturers may still hold some responsibilities. Still other manufacturers may not employ nanomaterials in their products or processes, but such nanomaterials may still exist within company workspaces given how widespread these materials have become.

Second, manufacturers should understand and stay current with the scientific state-of-the-art as well as regulatory requirements and developments potentially applicable to their employees, consumers and the environment. An important consideration related to efforts to understand the state-of-the-art is whether or not manufacturers should themselves expend resources to advance “the science” in seeking to help find answers to some of the aforementioned uncertainties. For example, should a manufacturer fund and/or otherwise support toxicity, industrial hygiene and/or human epidemiological related research concerning its specific nanotechnology products and processes?

Although a manufacturer understandably might hesitate before diving into these unknown waters, in doing so it may put itself in a better position to later defend its conduct to governmental agencies and/or a jury, as compared to competitors who did not attempt to expand their understanding of the technologies they utilize and from which they profit. And, if the choice is not to participate in this type of research, it should be made knowingly and its reasons appropriately documented. Manufacturers may also want to consider how engaged to become in the regulatory process. 

Third, should manufacturers implement particular industrial hygiene protocols and practices for specific hazards potentially associated with employed nanomaterials? For example, should manufacturers be seeking to monitor respiratory and other exposures to employees, bystanders, end-use consumers and/or the environment? And, if so, what does that actually look like in a world where so many scientific uncertainties exist in terms of sourcing, definitions, measurements and real-world applicability?

Fourth, manufacturers should evaluate product labeling and marketing communications. For example, is it prudent to alter product labeling for particular products containing nanomaterials? If so, what sufficiently warns others of exposure risks without “over-warning” – especially in the face of profound scientific uncertainties? Answering that question may partially depend upon not only foreseeable use and misuse of the product, but the specific nanotechnology involved and where in the production and distribution chain a particular manufacturer’s product lies. Issues of supply-chain liability involving sophisticated users as well as indemnification issues might also require analyses.

With respect to marketing communications, manufacturers should scrutinize what they are saying about the effectiveness and/or safety of these novel technologies, and consider how that might later affect potential liability. Claims of “better,” “stronger” and/or “faster,” for instance, need to be substantiated sufficiently before being made. It is no small feat in our litigious society for a manufacturer to avoid “over-selling” a novel technology’s benefits while neither “over-warning” nor failing to be transparent – especially when confronted with so many scientific uncertainties. 

As evidenced by this brief discussion, manufacturers would be well-advised to consider performing timely, specific and detailed risk management analyses of nanotechnologies potentially applicable to their products and processes. By doing so, a manufacturer will more likely be later characterized as having undertaken reasonable and defensible efforts to protect employees, bystanders, consumers and the environment. Although this may be a challenging task, especially in our current economic landscape of increasingly tight corporate budgets, such a well-considered and implemented undertaking may well be less expensive and distracting than potential future litigation and regulatory penalties.

Michael Lisak serves as counsel in Sidley Austin LLP’s Chicago office and a member of the firm’s Products Liability practice.  Michael has substantial national experience in mass and toxic torts as well as various types of product liability and general litigation, including trying cases.  He is a co-founder of the firm’s Nanotechnology group.

James Mizgala is a partner in Sidley Austin LLP’s Chicago office and a member of the firm’s Products Liability and Environmental practices.  James has defended products liability, consumer fraud, toxic tort and mass tort cases for nearly 20 years.  His experience is informed and enhanced by his graduate-level training as a neurobiologist, as well as his previous work in research labs.

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