Important Supreme Court order on interpretation of medical device distributor liability
The Court of Cassation issued an order on March 6, 2023, number 6568, which could have a significant impact on all distributors of medical devices or in vitro diagnostics that are part of multinational corporate groups.
Specifically, the Supreme Court asked the Court of Justice of the European Union to determine whether sellers of products that use distinctive signs, such as: corporate name, name, or trademarks partially or totally coinciding with those of the manufacturers should be liable for damages arising from defective products under Directive 85/374/EEC.
If the Court of Justice holds such entities liable as well, there would be increased liability for all distributors of medical devices or in vitro diagnostics who use distinctive signs that are partially or totally coincident with those of the manufacturer, even if they are not the true manufacturers and do not present themselves as such to consumers under EU Regulations 2017/745 and 2017/746.
The definition of producer under Directive 85/374/EEC includes the manufacturer of a finished product, the producer of a raw material or a component part, and any person who, by affixing his or her name, trademark, or other distinctive sign to the product, presents himself or herself as the producer of the product.
The Court of Justice of the European Union has ruled that anyone who affixes his or her name, trademark or other distinctive sign to the product, or authorizes its affixation, falls within the definition of producer. It is not necessary for this person to present himself as the true producer of the product in any other way.
The issue raised by the Supreme Court concerns the liability of distributors of medical devices or in vitro diagnostics who do not affix or authorize any distinctive sign on the product, but have a name, company name or other distinctive sign partially or totally coinciding with that of the manufacturer. The Supreme Court then asked the CJEU whether these entities should also be held liable.
The case that led to this question concerns a consumer who purchased a car and suffered damages due to the malfunction of the airbag during a car accident. The consumer sought damages from the automobile company that he considered to be the manufacturer of the vehicle. The company disputed its liability, claiming that the responsibility lay only with the parent company.
The Court of First Instance and the Court of Appeal agreed with the consumer, holding the company and not the parent company liable based on an interpretation of Article 3(1) of Directive 85/374/EEC.
The Supreme Court then decided to ask the Court of Justice of the European Union for a correct legal interpretation of Article 3(1) of Directive 85/374/EEC. The question posed by the Supreme Court essentially concerns the liability of the seller of a product who uses a name, business name or trademark that is partially or totally coincident with those of the manufacturer.
If the CJEU were to provide a broad interpretation of the liability regime, distributors of medical devices or in vitro diagnostics who use distinctive signs similar to those of the manufacturer would automatically become liable for damages caused by the product sold, simply because of the use of similar distinctive signs.
Pending the decision of the Court of Justice of the European Union, it is advisable for companies that are part of multinational corporations to protect themselves in their contracts and provide safeguards in their favor to avoid detrimental consequences from consumer damages actions in case of defective products.
Distributors of medical devices or in vitro diagnostics should always seek guarantees that they will be indemnified by the parent company in cases where a consumer directly claims damages under Directive 85/374/EEC.
Even in cases where the trader does not fall under the definition of “manufacturer,” there could still be liability for the distributor of medical devices or in vitro diagnostics. In fact, the second part of Article 3(1) states that when the manufacturer cannot be identified, any supplier shall be deemed to be a manufacturer unless he or she informs the person concerned within a reasonable period of time of the identity of the manufacturer or the person who supplied him or her with the product.
This provision also applies to imported products that do not bear the name of the importer, even if the name of the manufacturer is indicated.
Therefore, it is important to make sure that your organizational system allows you to correctly identify the manufacturer and respond within the stipulated time to consumer inquiries.
If you are a distributor of medical devices or in vitro diagnostics or operate in a regulated industry, contact us to get the regulatory support you need. Our experts can help you assess your situation and take the necessary steps to ensure regulatory compliance.
