UNDERSTAND YOUR LIABILITY
Let's Face It--The Good Old Days Are Gone and Now Everyone (Including YOU) is Potentially Liable for Product Problems. Here's How to Prevent Trouble Before it Begins.
By James F. Riordan
If you live in a hotel room, your only transportation is a rented moped, and you plan on being a student for life, you are virtually "judgment proof." However, if you own anything which can be turned into cash by greedy attorneys and plaintiffs, look out!
In the good old days, before the "great attorney glut," companies had to worry about liability only when an injured plaintiff could establish fault. In other words, the plaintiff had to prove that the company was negligent and put out a product they knew was harmful. Now, with the "strict liability" concept, a plaintiff need not show fault.
Inventors, designers, manufacturers, sellers AND THEIR EXECUTIVE OFFICERS have responsibilities far beyond negligence and they ALL must assume the responsibility for the safety of the product. They ALL can be potentially liable for any real or imagined, direct or indirect injury that has "some connection" with the product's use.
For that reason, winning products are those with no chance of hurting anyone regardless of how they are used.
The primary authority on product safety is the Consumer Product Safety Commission (CPSC). The CPSC is empowered to protect the public from unseen risk, to evaluate products, and to develop uniform standards. The penalties for violating safety standards can be severe and the CPSC promises to "prosecute violators aggressively." You may reach them at:
http://www.cpsc.gov
Another source of information on product standards is Underwriters Laboratories. They will be happy to tell you whether a product should be "listed" with them or "approved" by them. There are cases where a product may not have to be legally listed with UL, but the failure to do so may result in some retail outlets refusing to carry the product. Underwriters Laboratories may be reached at:
http://www.ul.com
If the product will be used in industry, assembled in the U.S. or if the technology you're evaluating will be developed or used in industry in the U.S., it's a good idea to check with the National Institute for Occupational Safety and the health division of the Health and Human Services Department, commonly known as NIOSH. They can determine if the product meets OSHA standards for use in industry. NIOSH will be happy to tell you whether they have already completed tests on similar products and what the results were.
Meeting minimum standards does not absolve the manufacturer of all responsibility. Producers must go beyond basic standards and either eliminate identifiable hazards or properly warn users of possible hazards. Do not underestimate the difficulty of making sure the buyer and end-user are fully instructed in how to use the product safely, and altered to every imaginable way the product could cause harm to them and others.
I am a firm believer in the fact that you should have as many government and testing agencies give you their approval on a product as possible. That way, if a problem ever develops in the field with the product, you can point back at the agency or certification firm and at least have a chance at "spreading the liability."
Unfortunately, the litigious atmosphere is actually stifling creativity and killing companies' incentives to market new health care products, drugs, etc, which would be beneficial to society. One of my clients presently has a new piece of medical equipment which would save many lives per day, every day, but he is afraid to market it for fear of the lawsuits form the one or two patients who might die from other causes, yet their lawyers or survivors might sue him anyway.
Another factor that is killing companies' incentives to improve their products is the fact that the court system shows its appreciation for a company improving the safety of a product by declaring that "if you improved the safety of a product then the old version is, by definition, unsafe." This leave companies open to lawsuits on the older version of their products and certainly makes it less attractive for them to add new safety features.
Sick, isn't it? Originally, we needed some legislation and a few lawyers to protect unwary consumers from companies too greedy to cure known defects in products. Now we need legislation to protect over-regulated companies and individuals from greedy plaintiffs and their lawyers, before we literally kill all incentives for innovation in this country and our trade deficits reach astronomical proportions.
I strongly suggest that you take this discussion seriously. The benefits of the product had better well exceed the chances of injury or you're going to be in deep "kimchee."
The above article was taken from James F. Riordan's classic book, HOW TO EVALUATE THE POTENTIAL FOR SUCCESS OF A NEW PRODUCT OR TECHNOLOGY. Riordan's highly-acclaimed, 36-point system is a valuable tool for inventors, product evaluators or anyone interested in the invention process. Each section is followed by a comprehensive questionnaire that can be used to evaluate your product.
The highly-recommended book can be ordered by contacting the James F. Riordan Company, 3110 Camerosa Circle, Cameron Park, CA 95682. The company can be reached by phone at (916) 676-4729. The book may also be ordered through the Dream Merchant, 2309 Torrance Blvd., Suite 104, Torrance, CA 90501. The phone number is (310) 328-1925.
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