3D Printing and Liability – More Dimensions Than You Can Imagine
After more than three decades, 3D printing is widely used in industrial production. A survey by PwC shows that two-thirds of the top 100 manufacturing companies use 3D printing. It is used, for example, to produce parts for planes and vehicles, as well as in medicine to create prosthetic limbs and dental implants. 3D printing technology has even helped researchers grow human tissue in labs. The impact of this technology on medicine and the economy will be significant – as will the implications for the insurance industry.
Until recently, 3D printers had been largely restricted to industrial applications because of their size, price and speed. However as new manufacturers enter the market, and the price comes down, 3D printers are increasingly being used by private individuals. The market for 3D printers is expected to exceed $5 billion in 2015 – a growth of more than 50% on the $3.3 billion spent in 2014.2
The economic impact of 3D printing could reach $550 billion a year by 2025, according to estimates by the McKinsey Global Institute.3 Currently, people have access to 3D printers at universities, schools, local libraries and community initiatives for innovation. Also, 3D printing as a service in shops or online is gaining momentum. By 2018 at least seven out of the top ten global, multi-channel retailers will use 3D printing for their custom stock orders, according to Gartner.4 However, the private use of 3D printing is expected to develop in a similar way to the pc market, as more printers become affordable for regular consumers.
The increased use of 3D printing has raised concerns over intellectual property rights because the technology allows designs and products to be copied and replicated easily. To mitigate their liability risk for intellectual property infringement, 3D printer manufacturers and suppliers tend to use general warnings like the ones on photocopiers in public facilities.
However, 3D printer users can engage in piracy at the push of a button even though products from these devices are subject to the same patent, copyright, design rights, trademark requirements as traditionally manufactured ones.
In addition to revolutionizing the production line, 3D printing blurs boundaries between the different roles in the production chain and makes it harder to trace the responsible party; for example, the producer cannot be determined due to the lack of traceability. A change of product liability laws may be called for to secure adequate consumer protection as products created using a 3D printer are subject to the same safety and labeling regulations as “regular” products.
While product liability (and product recall) is likely to be most affected by the rising use of 3D printing, liability in other lines of business have to be taken into account: general, professional, intellectual property, business interruption, directors’ and officers’, workers’ compensation and cyber. In addition, the design element in 3D printing creates a grey area between general and professional liability, which requires redefining coverage.
3D printing could have a significant impact on a company's or a private consumer's legal liability. The particulars regarding liability are largely unknown and awaiting to be determined by the courts because of the considerable delay between technological innovations and regulatory legislation.
In August 2015 the FDA approved the first 3D printed drug, Spritam (an epilepsy medication). Astronauts used the technology to produce a wrench, potentially starting a revolution in space travel. Scientists are looking into building future houses on the moon using its dust with the help of 3D printing; tests are already underway. In another striking development, 4D printing - 3D printing of objects that can adjust their shape or properties to the environment - is already on the horizon.
We see 3D printing as an emerging issue that might have a dramatic, if not disruptive, impact on the economy. It is bound to be a game changer for many of our clients’ lines of business around the world, and a lot will depend on legal developments that struggle to keep pace with technological progress.
- Disruptive Technologies: Advances that will transform life, business, and the global economy, McKinsey Global Institute, May 2013.