Transcript Legal Issues in Engineering

GATEWAY
Legal Issues
in
Engineering
Department of Mechanical Engineering, The Ohio State University
Sl. #1
GATEWAY
Why Should Engineers be Concerned?
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Growing legal fees
 Product liability cases
 Class action lawsuits
 Intellectual property infringement
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Paramount to the overall success of the
company
 Legal fees of some Fortune 500 companies are equal
to, or exceed, their net operating profits
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Be proactive, not reactive
Department of Mechanical Engineering, The Ohio State University
Sl. #2
GATEWAY
Two Major Areas
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Product Liability
 Factor of safety days are gone
 Learn to be multi-disciplinary
» Communicate, communicate, communicate
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Intellectual Property
 Know the patent process
 Safeguard confidential information
Department of Mechanical Engineering, The Ohio State University
Sl. #3
GATEWAY
Product Liability Costs
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In 1985, net compensation to plaintiffs
exceeded $34 billion
 This has undoubtedly increased since that time
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General liability insurance costs have
increased over 4 times the rate of growth
of the national economy
Department of Mechanical Engineering, The Ohio State University
Sl. #4
GATEWAY
What is Product Liability?
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Area of tort law
 Holds the manufacturer legally accountable for
damages related to their “defective” products
» The defect can be in manufacturing, design,
or warning and instruction
» Damage to both user and bystanders
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Wide product range
 Low-tech to high-tech
Department of Mechanical Engineering, The Ohio State University
Sl. #5
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Basis for Product Liability
Based generally on one of three theories
 Strict liability
» In most states, including Ohio
 Negligence
» In all states
 Breach of warranty
» In all states
Department of Mechanical Engineering, The Ohio State University
Sl. #6
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Strict Liability vs. Negligence
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Strict liability
 The manufacturer or seller is liable for injuries
caused by an unreasonably defective product, even
if they used all possible care in the preparation and
sale of the product
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Negligence
 The manufacturer or seller did not act with
reasonable care to ensure the safety of the product
Department of Mechanical Engineering, The Ohio State University
Sl. #7
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Who Can Be Held Liable?
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Any person or entity in the chain of
distribution, including:
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Manufacturers
Distributors
Wholesalers
Retailers
Component-parts maker
Department of Mechanical Engineering, The Ohio State University
Sl. #8
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What is a Defective Product?
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What if the user blatantly disregards
warning labels?
Is a product design unsafe if a
competitor’s model is designed safer, or if
a safer design is conceivable?
Department of Mechanical Engineering, The Ohio State University
Sl. #9
GATEWAY
What is Required to Establish
Product Defectiveness?
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The product must be defective when it
left the defendant’s control
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The three types of defects:
 Manufacturing
 Design
 Failure to Warn
Department of Mechanical Engineering, The Ohio State University
Sl. #10
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Warning Labels
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No longer adequate
 BUT still very important
Department of Mechanical Engineering, The Ohio State University
Sl. #11
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What Can be Done to Avoid
Product Liability Litigation?
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Minimize the chances of becoming involved in
the first place
Engineers should take steps NOW to help their
case LATER
Department of Mechanical Engineering, The Ohio State University
Sl. #12
GATEWAY
Detailed Notes of the Design Process
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Be sure to note ALL conversations about
product safety
 Even those features dismissed as possible safety
features
» Failure to document may be
detrimental in the long run
Department of Mechanical Engineering, The Ohio State University
Sl. #13
GATEWAY
Keep Liability Questions in Mind
Throughout the Design Process
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Analyze products for safety concerns
throughout the process
 Document the analysis
 The analysis should include a Failure Mode and
Effect Analysis (FMEA)
» NEVER put a price on human life
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Be careful about the way one documents
concerns about the manufactured product
Department of Mechanical Engineering, The Ohio State University
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GATEWAY
Follow Document Retention Policies
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This can create unnecessary problems
 Production of documents to the opposing side in
litigation
 May not be able to create a perfect or accurate
reconstruction of a situation
Department of Mechanical Engineering, The Ohio State University
Sl. #15
GATEWAY
Product Warnings
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Should be part of the overall design process
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Used to reduce the risk or likelihood of injuries
after all other precautions have been utilized
 What is reasonably safe?
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Must be comprehendible by everyone
 Even those who may have a handicap of language,
age, or some other foreseeable condition
Department of Mechanical Engineering, The Ohio State University
Sl. #16
GATEWAY
What Constitutes an Adequate
Product Warning?
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Legally, it is based on sufficient disclosure of all
reasonably anticipated risks of serious,
avoidable injury
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Basic Elements:
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Signal words
Hazard
Risk
Precautions
Protective measures
Department of Mechanical Engineering, The Ohio State University
Sl. #17
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Product Recall Prevention
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Improve product quality through the use
of:
 Quality control systems
 Product safety committees
 Design safety reviews
Department of Mechanical Engineering, The Ohio State University
Sl. #18
GATEWAY
Quality Control Systems
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Product quality is synonymous with
product liability prevention
Conformance to specifications
Begins with design reviews and includes:
 Controls of purchased material
 In-process manufacture controls
 Field performance evaluations
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Six Sigma
Department of Mechanical Engineering, The Ohio State University
Sl. #19
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Product Safety Committees
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Comprised of personnel from:
 Quality assurance
 Product engineering
 Marketing and Field Services
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Responsible for reviewing:
 Published product-related company literature,
warranty statements, new product design reviews,
user’s instructions, warning labels, accident reports,
and customer complaints
Department of Mechanical Engineering, The Ohio State University
Sl. #20
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Design Safety Review
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Failure Mode & Effect Analysis (FMEA)
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Consider:
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Who will use the product?
In what environment will the product be used?
What are the capabilities of the likely user?
What standards need to be met?
How will the product fail?
How probable is it that failure will occur?
What is the severity of the potential injury?
Department of Mechanical Engineering, The Ohio State University
Sl. #21
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Product Liability Review
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Be PROACTIVE, not REACTIVE
 Implement these and similar programs to prevent
costly product liability litigation
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The success or failure may depend on
your ability to implement these programs
 No one is immune to litigation
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Communicate, communicate,
communicate!
Department of Mechanical Engineering, The Ohio State University
Sl. #22
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Intellectual Property
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Trademarks
Copyrights
Trade secrets
Patents
Department of Mechanical Engineering, The Ohio State University
Sl. #23
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Trademarks
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Indicates the source or origin of a good or
product
Prevents others from using confusingly
similar marks
State and Federal Registration but not
required to register for rights
Issued for 10-year period
 Renewable forever
Department of Mechanical Engineering, The Ohio State University
Sl. #24
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Copyright
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Protects a form of expression rather than
a subject matter
Exists automatically from the time of
authorship
Registration is not required
To obtain a copyright put ©, the year,
and the owner beside the expression
Department of Mechanical Engineering, The Ohio State University
Sl. #25
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Trade Secret
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Information unknown to the public and
industry
Gives the knowledgeable company an economic
or competitive advantage
Steps should be taken to prevent disclosure:
 Confidentiality agreements
 Plant visitation agreements
 Limit discussions
Department of Mechanical Engineering, The Ohio State University
Sl. #26
GATEWAY
Patents
Understanding the Patent Search Process
Department of Mechanical Engineering, The Ohio State University
Sl. #27
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What is a Patent?
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A Grant of property from the government
 For invention
 In exchange for full disclosure of the invention
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Extends 20-years from filing date
Grants the holder the right to exclude others
from making, using, or selling
Must register within 1-year from date of first
disclosure or use to obtain rights
Department of Mechanical Engineering, The Ohio State University
Sl. #28
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Requirements to be Patented
1.
Must be new
 Has not been invented by someone else
 Has not been described in a publication
 Is not on sale or in public use
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Useful and accomplishes its purpose
“Non-obvious” to someone “skilled in
the art”
Department of Mechanical Engineering, The Ohio State University
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What can be Patented?
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Articles of manufacture
Machines
Processes
Compositions of matter (chemical compounds)
Ornamental designs
Methods of doing business
Improvement of the aforementioned items
Department of Mechanical Engineering, The Ohio State University
Sl. #30
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What Cannot be Patented?
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Any artistic creation
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Mathematical methods
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Business schemes
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Laws of nature
Forms
Ideas
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Department of Mechanical Engineering, The Ohio State University
Sl. #31
GATEWAY
Who Benefits From Patents?
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Inventor
 Secure from competition for 20 years
 Form of personal property - Can exploit invention for own
gain
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The Public
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Invention becomes public knowledge
Freely available technology after patent expires
Cheaper and better products become available
Wealth of information (> 6 million patents)
Department of Mechanical Engineering, The Ohio State University
Sl. #32
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Locating Patent Information
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Library
 CD Rom based – Patentview (1974 – present)
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Internet
 U.S. Trademark and Patent Office
» http://www.uspto.gov
 IBM’s Intellectual Property Network
» http://womplex.patents.ibm.com
Department of Mechanical Engineering, The Ohio State University
Sl. #33
GATEWAY
Information to be Supplied in the
Patent Process
1. Patent search
• Avoid the potential of costly patent infringement,
which can result in:
- Payment of lost profits
- Payment of reasonable royalties
- Injunction to stop the sale and importation of the
product
- Damages and attorney fees, if “willful”
Department of Mechanical Engineering, The Ohio State University
Sl. #34
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Information to be Supplied in the
Patent Process (Cont’d)
2. Patent disclosure
• Most likely a company-specific, prepared form from
within the companies legal department
• Form include:
- Identify the technical field
- What problem is trying to be solved?
- How have others tried to solve the same problem?
- Prior solutions are known as “prior art”
Department of Mechanical Engineering, The Ohio State University
Sl. #35
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Information to be Supplied in the
Patent Process (Cont’d)
3. Identification of prior solution which
failed to completely solve same problem
 Describe the shortcomings of the prior art
4. Description of solution in 25 words or less
» Begin with, “I have discovered…”
 Depict the solution with figures
 Describe how the solution works by referring to the
drawing(s)
Department of Mechanical Engineering, The Ohio State University
Sl. #36
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Information to be Supplied in the
Patent Process (Cont’d)
5. Describe the functional and structural
differences between the proposed solution
and the prior art
 They must exist, or it is not unique
 Considered “points of novelty”
6. Explain why the solution is not obvious
 Must be “non-obvious” to someone “skilled in the art”
 Compare the proposed approach to that of the prior art
Department of Mechanical Engineering, The Ohio State University
Sl. #37
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Information to be Supplied in the
Patent Process (Cont’d)
7. Describe all of the results achieved by the
proposed solution
 Use both “hard” and “soft” results
8. Describe the advantages of the proposed
solution over the solutions of the prior art
 Must exist or a patent would not be pursued
9. Provide the date of conception, first written
description, and the date of first disclosure
 “First to invent”
Department of Mechanical Engineering, The Ohio State University
Sl. #38
GATEWAY
Summary
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Engineers should do their part to prevent
costly litigation for themselves and their
company.
Be aware of the legal issues in
engineering
 Don’t expect them to disappear
Department of Mechanical Engineering, The Ohio State University
Sl. #39
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Credits
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This module is intended as a supplement to design classes in
mechanical engineering. It was developed at The Ohio State
University under the NSF sponsored Gateway Coalition (grant
EEC-9109794). Contributing members include:
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Gary Kinzel…………………………………..... Project supervisor
Jeff A. Webb …………………………………... Primary author
Phuong Pham and Matt Detrick ……….…….. Module revisions
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Department of Mechanical Engineering, The Ohio State University
Sl. #40
GATEWAY
Disclaimer
This information is provided “as is” for general educational purposes; it can
change over time and should be interpreted with regards to this particular
circumstance. While much effort is made to provide complete information,
Ohio State University and Gateway do not guarantee the accuracy and
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described and/or contain herein and assumes no responsibility for anyone’s use
of the information. Reference to any specific commercial product, process, or
service by trade name, trademark, manufacture, or otherwise does not
necessarily constitute or imply its endorsement.
Department of Mechanical Engineering, The Ohio State University
Sl. #41