Posted: August 18, 2008

The next big thing in nanotechnology? Litigation.

(Nanowerk News) Nanotechnology holds great promise for revolutions in medicine, energy and agriculture.
But as scientists work to make groundbreaking nanotechnology discoveries, lawyers are waiting.
"Nanotechnology is one of the three pre-eminent environmental law issues," said Roger Martella, former U.S. EPA general counsel. "Once people get a handle on climate change, they're going to look back and say, 'This is really the other big thing we need to be focusing on.'"
The key question: Do existing chemical regulations provide adequate protections against nanomaterials?
Nobody knows the answer, but lawyers know a potentially explosive tort liability market when they see one.
"There's interest in nanotech in the legal field because of the unknowns, and the nuanced challenges it creates for existing frameworks," said George Kimbrell, a staff attorney at the nonprofit International Center for Technology Assessment.
What is so intriguing is the fundamentally different nature of nanomaterials. In some cases, making things smaller changes their properties. So a nano-sized chemical might take on a new color or start to conduct electricity, and nanoscale particles are often more chemically reactive because they have a greater surface areas.
There are no regulations that address the unique nature of nanoparticles. That means products are coming onto the market without proper oversight -- paving the way for a host of litigation, Kimbrell said.
"Attorneys and law firms doing regulatory law ... see a fundamental disconnect between the current setup and the reality of nanomaterials, the novel and fundamentally different properties they bring," he said.
Nanomaterials currently fall under several existing regulatory agencies and laws -- notably, the Toxic Substances Control Act (TSCA), although there is debate over how TSCA should be applied, Martella said.
"The fundamental question seems to be, 'Are nanomaterials new chemicals or existing"'" Martella said. "EPA decided that there is no subcategory of nanomaterials under TSCA; size is irrelevant."
This means that nanomaterials will be regulated as existing chemicals if they have the same chemical composition as chemicals already on the list. That is an important point because EPA can regulate new chemicals more easily than existing ones under TSCA.
Some advocacy groups say EPA failed to account for the unique properties of nanomaterials, and therefore will not provide adequate oversight.
"The scientific consensus on nanomaterials is that nano does not mean merely tiny, but rather materials that have the capacity to act in fundamentally different ways," Kimbrell said. "Our concern is that health and safety research and environmental impact research is absent."
Kimbrell's group filed a petition with EPA in May challenging the agency over its regulation of nano-sized silver particles. The center wants EPA to regulate nanoparticle silver as a unique pesticide that could cause serious environmental harm. Silver must be labeled a pesticide in its larger form because studies show it can be toxic to aquatic life (E&ENews PM, May 1).
Future nano-related products liability
Beyond the center's petition, there has been little litigation yet on potential nanotechnology risks.
David Wallace, a lawyer with Chadbourne & Parke LLP, said legal action will pick up dramatically once nanotechnologies such as targeted cancer treatment move from laboratories to the marketplace.
"The shape of litigation in nanotechnologies remains to be seen in many ways," Wallace said. "For nano-related products liability, the high-stakes health effects are still a ways down the road, and we're unlikely to see it until next-generation device and pharmaceutical spaces."
Nanomaterials are already used in a range of products -- from computer chips to sunscreen -- and accounted for more than $88 billion in manufactured goods in 2007. By 2014, a projected $2.6 trillion in global manufactured goods, about 15 percent of total output, will incorporate nanotech, according to Lux Research, which provides strategic advice on emerging technologies.
Wallace cautioned that there is a spectrum of risk related to the commercialization of nanomaterials, given the field's broad scope. This spectrum will influence how litigation develops.
On one end, environmental and health safety risks are negligible, Wallace said. For example, embedding nanoparticles in paints or sealants for insulation or greater heat resistance -- technologies already on the market -- poses limited exposure risk from inhalation of potentially dangerous particles. But risk becomes more prevalent at other life stages, including the manufacturing, recycling and disposal stage, he said. Kimbrell also points to the unknown effects of such materials in the environment.
The biggest concerns from a regulatory and litigation standpoint, though, will involve cases in which nanoparticles are not set in another substance -- targeted medicine, for example, Wallace said.
In such a setting, there will be direct exposure of people to nanomaterials. This, he said, is where identifying and managing risk will become particularly significant.
'Walking a tightrope without a net'
Insurers are already eyeing nanotech developments with caution, preparing for questions and litigation that will inevitably arise as technologies advance.
"Insurance companies and reinsurers are similarly interested [like lawyers] because they see this great unknown that is moving forward," Kimbrell said. He compared it to "walking a tightrope without a net."
Wallace agreed the insurance industry is carefully following both the science and politics of nanotechnology, trying to develop a strategy that addresses its unique aspects and inherent risks.
"Insurance companies and reinsurers are ahead of the curve in terms of risk projection, risk identification, quantification and management, but that's who they are and what they do," Wallace said. "The big challenge is coming to grips with the fact that there is a considerable amount of ambiguity and uncertainty associated with the commercialization of nanotechnology."
A Lloyd's of London report this year warned insurers to be careful when evaluating new products because of the lack of data on long-term effects on human health and the environment.
"In the past, a vacuum of regulation has proved unhelpful to insurers," the report says. "Lack of regulation is never helpful to liability insurers and the insurance industry should lobby for clarity."
However, as the landscape shifts to incorporate ongoing developments in nanotechnology, its far-reaching effects are bound to shape the future of environmental law, Martella said. Since uncertainty is a given, people should acknowledge that greater regulation could very well be on the horizon.
"Currently, agencies seem to be more focused on studying the issues than regulating them," Martella said. "That trend may be moving toward more regulation. It may be that nanotechnology transitions toward a more mandatory regulatory-type scheme than what currently exists today."
Source: This article is reproduced with kind permission of E&E Publishing, LLC.
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