Subject: Electronic Products

Smart Contracts — A Few Tips to Avoid Being Outsmarted

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Proponents of digital innovations such as blockchain, the Internet of Things (IoT) and smart devices have hailed the introduction of such technology as the Fourth Industrial Revolution. When used together, they may create self-executing “smart contracts” for a variety of transactions. Smart contracts do not need to rely on IoT devices, but when they do, these devices are critical to the system, most importantly because they collect and transfer the transaction-related data that triggers the execution of the contracts. But how is that data verified, and what happens if the IoT devices are wrong?

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Ninth Circuit Adheres to Precedent and Finds That Subverting Express Warranties Simply Does Not Compute

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On May 19, 2022, in an unpublished decision, a Ninth Circuit panel reaffirmed that under California law manufacturers do not have a duty to disclose defects in their products that manifest after the expiration of the product’s warranty unless the defect poses an unreasonable safety risk.  Taleshpour v. Apple, Inc., 2022 WL 1577802 (9th Cir. May 19, 2022).  The court affirmed dismissal of a proposed class action against Apple Inc., holding that California consumer protection laws were not violated as a matter of law because the alleged defect in MacBook Pro laptop computers arose after the expiration of the warranty and the complaint did not allege any safety issue.  The court followed existing Circuit precedent, even though there is some conflicting authority in the California courts of appeal.

Plaintiffs alleged that in certain MacBook Pro models, the backlight ribbon cables used to connect the display screen to the display control tear because the cables do not provide enough slack when the laptops open and close.  Apple agreed to replace the display of all 13-inch MacBook Pros that suffer from the alleged defect, but not the 15-inch model or any model released after 2016.  Plaintiffs alleged on behalf of the class that the excluded models suffered from the same backlight defect as the pre-2016 13-inch version.  Plaintiffs conceded the backlight ribbon issues arose after the expiration of Apple’s one-year warranty.

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Snapchat’s ‘Speed Filter’: Georgia Supreme Court Revives Negligent Design Claim

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On March 15, 2022, the Georgia Supreme Court revived a negligent design claim that had been brought against Snapchat, Inc. (n/k/a Snap, Inc.) involving Snap’s “Speed Filter.”  As one of the few decisions across the country addressing products liability law in the context of platform “products” (more accurately categorized as services) such as Snapchat, the opinion provides a glimpse of the sort of issues that other courts may soon be required to address.

The Factual & Procedural Background:

Plaintiffs Wentworth and Karen Maynard alleged that Defendant Christal McGee was using Snapchat’s “Speed Filter” and driving over 100 miles per hour when she rear-ended them, causing severe injuries.  The “Speed Filter” is a feature that allows the user to record their real-life speed on a photo or video and share it with other users.  Plaintiffs sued Snap as well, alleging that Snap had negligently designed the “Speed Filter” because the filter promoted unsafe driving and encouraged dangerous behavior.

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Latest “Right to Repair” Bill Could Signal Changes for Consumers and Manufacturers

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On March 14, 2022, a bipartisan trio of U.S. Senators introduced a bill (S.3830) that would require manufacturers to provide the tools and documentation necessary for consumers and third parties to repair electronic equipment. Dubbed the Fair Repair Act of 2022, the bill is the Senate version of a similar bill (H.R.4006) introduced in the House last June. The proposed legislation covers products ranging from agricultural equipment to consumer electronics and is the latest in a series of federal and state proposed laws seeking to codify the “right to repair.” If the bill becomes law, manufacturers will not only have to comply with the Act’s requirements, but they will also need to prepare for potential liability implications.

Attempts at codifying a right to repair are not new in the United States. Calls for automotive right-to-repair legislation go back to the 1970s. But the movement has hit its stride in the last decade. In 2013, Massachusetts became the first state to pass a right-to-repair law requiring vehicle manufacturers to sell their proprietary diagnostic tools and software to third-party repair shops, spurring a flurry of similar bills across the nation and bringing attention to the right-to-repair movement. Though the movement has had little success in codifying a right to repair so far, the tides may be shifting. Indeed, in July 2021, President Joe Biden signed a sweeping executive order that, among other things, encourages the Federal Trade Commission (“FTC”) to enact regulations prohibiting manufacturers from barring the repair of equipment and devices by consumers and independent repair shops.

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Smart Medical Devices Open New Treatment and Litigation Doors While Confirming Age-Old Balancing Acts

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Telemedicine and telehealth have significantly reshaped how consumers access health care services. Even before the COVID-19 pandemic, online portals were jockeying to replace visits to primary care providers and urgent care clinics for minor illnesses or simple-to-prescribe medications. The last two years shifted that race into high gear, particularly with new products and platforms being introduced that range from virtual clinic platforms that allow patients—and their programmable implanted medical devices—to connect with their providers from the comfort of their own homes, to passive smart devices that remotely monitor patient vital signs, analyze that data using proprietary algorithms, and evaluate whether a patient is having a medical emergency or needs to schedule an appointment with their provider. These technologies are now so ubiquitous that they are being showcased at the 2022 Consumer Electronics Show.

To be sure, regulatory changes in response to the COVID-19 pandemic made telemedicine more permissible—and reimbursable—than in the past. But that alone is not driving medical device companies forward. Instead, medical device manufacturers are rapidly developing smart or algorithm-driven medical devices that take advantage of the ever-increasing power of those technologies and leveraging telemedicine to make the remote treatment and management of medical conditions less complicated. A recent article in Nature’s npj Digital Medicine confirmed the growth in this area, counting 64 separate smart- or algorithm-driven medical devices currently on the market as of 2020. See Stan Benjamens, et al., The State of Artificial Intelligence-Based FDA-Approved Medical Devices and Algorithms: An Online Database, 3 npj Digital Medicine Article No. 118 (2020). Each of these new devices endeavor to enable physicians to practice more effectively and efficiently than they could before. The future for smart or algorithm-driven medical devices looks promising.

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Software Liability: Why a Michigan Federal Court Decision is Relevant to Product Manufacturers Nationwide

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Numerous products in our day-to-day lives incorporate or consist of software. The legal system, however, has been hesitant (at best) to bring software within traditional product liability regimes. Courts have grappled with whether to consider software a product and have largely found that it is not. However, a recent decision in the Western District of Michigan holds that software is a product—Holbrook v. Prodomax Automation Ltd., No. 1:17-cv-219, 2021 U.S. Dist. LEXIS 178325 (W.D. Mich. Sept. 20, 2021). While Holbrook may be an outlier, it is significant. It bucks the trend, and potential defendants should be aware of it.

Background: Holbrook involved a wrongful death suit arising out of an accident on a robotic assembly line. The decedent’s estate (Plaintiff) brought a common-law negligence claim against multiple defendants, including the manufacturer who designed, built, and installed the assembly line. Plaintiff’s claim was based, among other things, on the software controlling the robots.

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