ICPHSO Report / May 2016
2016 Symposium Report
The International Consumer Health and Safety Organiza- tion (ICPHSO) is an organization that brings together all the stakeholders in product safety to share information, best practices and new research on how to keep consum- ers safe. That is never more evident than at our annual Symposium. This year’s Symposium, “The Challenge of Change: Collaborating Today for a Safer Tomorrow,” was held in Washington, DC starting on February 29 through March 3, 2016. ICPHSO members can find the presentations and attendee list at our website.
Here are some highlights:
- Over 780 came together to hear from over 100 speakers on panels and speeches ranging from risk assessment to licensing, from warning research to green chemistry and everything in between.
- US CPSC Chairman Elliot Kaye gave the keynote on CPSC day. We heard from all five commissioners and many CPSC staff throughout the week.
- Senator Tom Udall (NM) spoke of his work in the area of concussion prevention, Toxic Substances Control Act (TSCA) and other safety issues.
- Attendees could also visit the USCPSC labs in Maryland, join others at Dine-Arounds at great local restaurants in DC and take an evening “Monuments by Moonlight” tour.
Learn more here and consider joining to have access to symposium proceedings as well as upcoming regional and international meetings expanding on the themes investigated last week in DC.
Below is an example of the content from the panels at ICPHSO 2016. Find more by checking out the presentations – available to members and attendees.
Cheryl A. Possenti Corporate Counsel for SPLiCE and partner with Goldberg Segalla LLP, presented on the legal quandary companies face when producing licensed products. Typically, a licensed product bears the name and logo of the brand owner, but is produced by an independent manufacturer under a license agreement that allows the manufacturer to use the brand owner’s name and logo. Licensed products can range from tee shirts and caps to tools and appliances.
When implemented correctly, producing safe licensed products can be financially and commercially beneficial to both the brand owner (licensor) and manufacturer (licensee). Brand owners can build brand equity, and extend their brands into product lines outside the products they typically produce. Manufacturers can also benefit from increasing market share and sales.
Brand owners that enter into licensing arrangements can often be seen as changing from selling the company’s good products to selling a company’s good name in exchange for royalty payments. Brand owners, however, should avoid being lulled into believing the myth that they will be entirely uninvolved if a licensed product hurts someone or must be recalled. If a licensed product hurts someone, and a lawsuit is brought, the diverse laws of all 50 states will determine the extent to which a lawsuit can be maintained or continued against a brand owner that did not manufacture the allegedly defective product. Addition- ally, if a licensed product needs to be recalled, and the actual manufacturer has become insolvent, a brand owner may experience pressure to conduct the recall on its own.
Legal theories of liability that have been adopted by var- ious states include the “apparent manufacturer” theory, the “stream of commerce” theory, and the “substantial participation” theory set forth in the Third Restatement of Torts. The paradox is that all of the activities a brand owner would insist on before permitting another company to produce products bearing its brand, such as providing product standards and retaining control rights, are exactly the types of activities that the courts look at when deter- mining if a brand owner exercised sufficient control over the product to remain in the lawsuit.
How does a brand owner build a successful licensing program that will pro- tect the company’s good name and decrease the risk of having a licensed product hurt someone? Three important pillars should form part of this construction project. The first pillar is a robust licensee selection process that explores and vets the proposed licensee. The second pillar is a strong license agreement that not only sets forth the financial terms, such as royal- ties and permitted uses, for the good times, but that also provides adequate protections and notification rights, when circumstances may be signaling that the times may not be quite as good. The third pillar is an ongoing program to make certain that relevant, adequate insurance is procured and maintained, which would include the brand owner’s recognition that some financial expo- sure, such as punitive damages or recall expenses, may not be covered by the typical liability insurance policy.
Should brand owners just abandon the idea of entering into license agree- ments? Not at all. But applying diligence and scrutiny to developing the three pillars of producing licensed products will help to protect brand owners and consumers from risks of licensed products that cause injury or that must be recalled.
Tony Green, Director of Public Policy with Safe Kids Worldwide presented about research the organization conducted last year on recalls, a survey of parents about their knowledge, attitudes and concerns about the process, as well as the registration of car seats. The survey results were helpful in informing future actions to improve the recall and registration process. Among the main findings were the following:
- Parents recognized the importance of registering their car seats but only half of them said they did register a car seat or would do so.
- They are skeptical about the recall process..
- According to the National Highway Traffic Safety Administration, more than 6 million car seats have been recalled in 2014—the largest ever—but less than half took advantage of the remedy offered by the manufacturer to make them safe.
- About 37 percent said they would stop using a recalled car seat imme- diately and purchase another brand or demand a refund for a recalled car seat to purchase another seat.
- Parents most often hear about car seat recalls through the news (71 percent), while about 41 percent hear directly from the manufacturer., probably those who returned the registration cards.
- Roughly one-third hear about them from other parents via social media (36 percent)—this demonstrates the power of Mommy bloggers--and from family and friends (31 percent). About 19 percent said they hear about recalls from nonprofits or government agencies.