Emerging Issue: Nanotech




By Christopher R. Reeves, Esq.

The Finley Firm, P.C.


© 2008 Christopher R. Reeves


With the advent of nanotechnology, a variety of companies, regulatory agencies, activist groups, and the like have been scrambling to predict the vast possibilities nanotechnology presents—from uses and risks to regulations and liabilities.  Even though there are over 500 consumer products currently on the market that manufacturers identify as using nanotechnology, any familiarity with their accompanying risks remains in developing research stages.  Nanotech Wire, FDA Task Force Takes a Step Forward, http://nanotechwire.com/news.asp?nid=4878.  The FDA has issued a White Paper from its Task Force that attempts to discuss its approach to nanotechnology.


Because so much remains unknown, regulatory agencies, such as the FDA and EPA, have been hesitant to implement any actual regulations and have instead invested substantial time and funding into research.  In July 2007, the FDA Nanotechnology Task Force released a report addressing the following issues regarding nanotechnology: (1) the ability of the FDA to identify products already regulated by the agency that contain nanotech materials; (2) the scope of the FDA’s authority in evaluating the safety and effectiveness of nano products; (3) the permissible and mandatory labeling regulations; and (4) the adequacy of current testing procedures for analyzing the quality and safety of products containing nano materials. A Report of the U.S. Food and Drug Administration Nanotechnology Task Force, July 25, 2007, http://www.fda.gov/nanotechnology/taskforce/report2007.html.  Similarly, in February 2007, the EPA’s Science Policy Council released its Nanotechnology White Paper, addressing nanotechnology in terms of agency programs, statutory regulations, and risk assessment. U.S. Environmental Protection Agency Nanotechnology White Paper, February 2007,  http://www.epa.gov/osa/nanotech.htm.  These reports attempt to articulate the complexity of regulating this new technology and emphasize the needs that still exist for greater research and further development.


In August 2006, The FDA Task Force was created to develop regulatory approaches that would allow for the “continued development of innovative, safe, and effective FDA-regulated products that use nanoscale materials.”  FDA Task Force Report, supra, at 5. Through pre-market authorization, the FDA regulates “drugs, biological products, devices, and food and color additives.”  FDA Task Force Report, supra, at 19.  The Nanotechnology Task Force emphasized that nanomaterials present unique issues for FDA regulation because of the diverse ways in which such materials may be used and combined.  FDA Task Force Report, supra, at 20.  Specifically, nanotechnology may spur the development of products that combine drugs and biological products and devices in a “highly integrated” fashion, paving the way for new diagnostic and therapeutic treatments.  Id. at 20.  While the FDA already provides a route for assessing “combination products,” the Task Force suggested the agency may need to generate additional avenues for assessing products that combine different regulated materials through the use of nanotechnology.  Id. at 20-21.  For now, the Task Force has only provided recommendations on how the agency should proceed, and no specific regulations regarding nanomaterials have been put in place.  These recommendations include communication between the agency and the entities it regulates during the beginning stages of product development and communication with the public about the adequacy of the agency’s policies and procedures.  Id. at 21.


The purpose of the EPA’s Nanotechnology White Paper was “to inform EPA management of the science needs associated with nanotechnology, to support related EPA program office needs, and to communicate these nanotechnology science issues to stakeholders and the public.”  EPA Nanotechnology White Paper, supra, at 18.  As evidenced by the attached chart, the EPA could potentially play a role in regulating nanotechnology through a number of statutory avenues, such as the Clean Air Act, Clean Water Act, and Toxic Substances Control Act (hereinafter TSCA).  EPA Nanotechnology White Paper, supra, at 64.  Under the TSCA, the EPA is already able to regulate certain products that use nanotechnology by requiring that any nanomaterials that fall within the Act’s definition of “chemical substances” be reported to the EPA for pre-manufacture review.  EPA Nanotechnology White Paper, supra, at 65.  Through pre-manufacture review, the EPA has the authority to restrict chemical uses, control occupational exposure, and limit manufacture and environmental release until greater “toxicity and fate data” is available to assess potential risks.  Id. at 65.  The White Paper continues with admonitions that the use or manufacture of nanomaterials could potential generate emissions of pollutants that fall within the EPA’s regulatory authority under the Clean Air Act or the Pollution Prevention Act.  Id. at 66.  The report continues that, “depending on the toxicity of nanomaterials to aquatic life, aquatic dependent wildlife, and human health, as well as the potential for exposure, nanomaterials may be regulated under the CWA.”  EPA Nanotechnology White Paper, supra, at 67.  In sum, the EPA’s report, for the most part, addresses the possible ways nanomaterials could be regulated.  Knowledge of the technology and its accompanying risks has simply not progressed far enough for agencies to take real action on implementing regulation.

Pending Litigation

As nanotechnology is such an emerging technology, the few cases that have surfaced related to nanotechnology have centered on patent disputes and shareholder/investment litigation.  There has not yet been a single case in the United States filed alleging that nanomaterials caused harm to a party in interest’s person or property.[1]  More importantly, the first health-related recall of a product containing nanomaterials recently occurred in Germany in April 2006.  Nanotech Product Recalled in Germany, Rick Weiss, April 6, 2006. http://www.washingtonpost.com/wp-dyn/content/article/2006/04/05/AR2006040502149.html

The product was “Magic Nano,” an aerosol spray cleaner used for making glass and ceramic surfaces water and dirt-repellant. Id. at *1.  The affected group included approximately 77 people, six of which were hospitalized over a one-week period at the end of March 2006.  The complaints included respiratory problems, pulmonary edema, and fluid in the lungs.  Id. at *1. In the wake of a recall, it is not surprising that internet sites like “lawyersandsettelements.com” are posting advertisements as follows: “If you suffered breathing or lung problems after using Magic Nano or other aerosol sprays, you may qualify for damages or remedies that may be awarded in a possible class action lawsuit. Please click the link below to submit your complaint to a lawyer for a free evaluation.”  Register Your Magic Nano Complaint, http://www.lawyersandsettlements.com/case/magic_nano_recall.html.  Though no cases yet deal with health or environmental injuries caused by nanomaterials, it is nevertheless the appropriate time for manufacturers, product developers, and insurance companies to begin considering coverage plans to address the risks that nano products may present.

Risks & Coverage

The areas in which nanotechnology risks are likely to appear include workplace injury, regulatory compliance, products liability, patent and intellectual property disputes, professional malpractice, and director and officer liability.  Mark Miller & Reed Rubenstein, R&D Magazine Online, Insuring Nanotech’s Future, http://www.rdmag.com/ShowPR.aspx. at *1 (2007 Advantage Business Media). As companies begin to develop products and implement procedures relying on nanotechnology, there may be changes in “manufacturing, disposal, treatment, movement in the environment, and toxicity.”  Id. at *1.  While there is still much research to be done, there seems to be a consensus that particles at the molecular level behave differently than larger versions of the same type material.  Id. at *2. Early research seems to show that nanoparticles may affect the heart, lungs, and brain if they are inhaled, ingested or come into contact with the skin.  Id. at *2. The question then, in these early stages of nanotechnology development, seems to be, how can companies protect themselves from potential lawsuits, where the risks are largely unknown?


Reed Rubenstein and Mark Miller, of Counsel for Greenberg Traurig, advise that broad insurance coverage through Commercial General Liability and Products Liability policies provide the greatest protection at the moment.  Thus far, insurance underwriters have rarely drafted nanotechnology exclusions into their policies, but the possibility is something to watch for when companies begin to renew their policies.  The chance that such exclusions may become more prevalent in the near future seems probable, since the same types of exclusions arose when new risks appeared with “nuclear, pollution, lead, asbestos, mold, and more recently, biological, and chemical” developments.  Miller and Rubenstein, supra, at *3.  These attorneys, however, indicate that explicit nanotechnology exclusions may not be the only way in which insurance companies prevent the inclusion of nanotechnology in their existing policies.  Insurers may try to envelop nanotechnology damages under pre-existing exclusions, such as pollution-related exclusions or biological and chemical exclusions.  Id. at *3.  Thus, “with respect to nanotechnology-related risks, insurers could assert that, if bodily injury or damage was caused by an “irritant or contaminant” that coverage is not provided.”  Id. at *3.  In terms of biological and chemical exclusions, nanotechnology certainly rests in another field of uncertainty, as common clauses excluding damages arising from biological or chemical releases are quite broad and have yet to be interpreted by courts.  In sum, insurance coverage of nanotechnology risks is in an early stage, where the actual risks are unclear as are the appropriate means to address those risks.  The Greenberg Traurig lawyers suggest that insurance carriers fear nanotechnology could be another asbestos, while insureds worry there is no stable way to protect themselves from unknown and possibly overwhelming risks.  Thus, it is important for nanotechnology companies to prepare now for the threat of “real and immediate litigation risk.”  Id. at *4.


In Georgia…


State legislatures also have not yet begun to regulate products containing nanomaterials in terms of health or environmental risks.  Many states, however, have instituted research initiatives to determine the uses and risks nanotechnology.  For instance, Governor Sonny Perdue carved out $38 million in Georgia’s 2007 budget to fund a Nanotechnology Research Center at Georgia Tech.  Philippa Maister, Georgia Wants a Piece of the Next Big Thing: Nanotechnology, Daily Report, February 16, 2006, at *2.  On the manufacturing side, however, a number of companies are already manufacturing products using nanotechnology or containing nanomaterials and placing them on the market.  For example, nGimat is an Atlanta based company that manufactures engineered nanomaterials in the form of nanopowders, thin film coatings, and devices.  Id. at *3.  nGimat currently has received over 25 U.S. patents and has several applications pending, all of which cover “ its raw materials, processes, equipment, composition of matter, intermediate products and final products.”  The International Nanotechnology Business Directory, http://www.nanovip.com/node/1286.  C3International, LLC, located in Alpharetta, GA, produces custom chemical treatments engineered through applications of nano-scale infusion technologies.  Nanotechnology Business Directory, http://www.nanovip.com/node/3073


The nanotechnology infusion process used by C3 can combine up to 57 elements into metals and alloys to create a thin, nanostructural coating.  Id. at *1.  Such a process may be similar to the kind of “combination products” the FDA Task Force on Nanotechnology suggested would require new methodologies for assessment.  CardioMems, Inc. is an Atlanta-based company that uses Microelectromechanical Systems technology to create innovative medical devices for diagnosis, treatment, and management of diseases.  Nanotechnology Business Directory, http://www.nanovip.com/node/580.  The list of nanotechnology-based companies, researchers, and manufacturers in Georgia goes on, making the state 24th in the nation for nanotechnology research and industry, according to one study.  See Maister, supra, at *2.  The same uncertainties, risks, and possibilities exist for Georgia as those researched nationally and worldwide.  Though health and environmentally related lawsuits has not yet made it to the forefront of the nanotechnology scene, information gathered by researchers and analysts from federal agencies to corporations to foundations seems to indicate litigation is inevitable.

[1] The closest case yet (which is a far cry from where litigation is predicted to go) was filed by an inmate in Tennessee, who alleged that the prison had used him as a test subject in an experiment involving nanotechnology.  See Jackson v. Rout, 2003 Tenn. LEXIS 1073 (Tenn. Oct. 27, 2003).  The only real issue of the case—access to medical records—had nothing to do with nanotechnology, and, not surprisingly, no evidence existed that the alleged experiment ever occurred.



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