Australia: Is this a watershed moment for products containing nanoparticles?

Key Points:

Emerging evidence of potential toxicity of zinc oxide and titanium dioxide nanoparticles, both of which have generally been considered safe for use in many domestic and personal products, may warrant revising entrenched assumptions and a reassessment of product liability risk-management practices for these products.

What are manufacturers' duties to stay abreast of the developing science?

Manufacturers and distributors owe a duty to take reasonable care to prevent their products from causing harm to downstream users. Although this is a trite proposition, it is often problematic to strike the right balance in practice.

A critical consideration for companies is to ensure their understanding and communication of potential risks to health from their products is up-to-date and appropriate.

This is relatively straightforward for well characterised products. It is much more difficult in cases where the state of scientific knowledge is in a state of rapid flux.

Such is the case with nanotechnology, a relatively novel field of science that is dedicated to creating and exploring uses for particles in the nanoscale (having one or more dimensions of 100 nanometres or less), otherwise known as "nanoparticles".

Nanoparticles have enormous promise and are likely to lead to quantum leaps in progress in fields as diverse as medicine and pharmaceuticals, agriculture, engineering and materials chemistry.

However, it is well understood in the scientific community that nanoparticles may yield unpredictable hazards, because previously well understood molecules often behave very differently physically, chemically and biologically, on the nanoscale. It is a new frontier.

As is often true with new and rapidly developing fields, conflicting data and opinion are commonplace. Trying to discern a true signal of toxicity from a false positive and to make reasonable decisions on product safety in the face of these shifting sands is a complex but critical obligation.

Emerging science on nanoscale zinc oxide and titanium dioxide – is this a watershed moment?

Zinc oxide and titanium dioxide have long been considered safe and are currently used in a wide range of consumer products, including food, dermatological products and new generation sunscreens.

However, recent developments have called into question whether nanoscale zinc oxide and titanium dioxide are safe in all circumstances.

• A study published in November 2011 in Biomaterials, one of the world's top journals, showed for the first time that zinc oxide nanoparticles are able to enter human cells and cause DNA damage (genotoxic). The mechanism of DNA damage remains unknown.
• Genotoxicity is a well recognised precursor to cancer, as well as reproductive toxicity and birth defects.
• Coupled to this, there is also a recent trend for regulatory agencies to recognise the carcinogenic potential of nanoparticles generally. In 2011, the US National Institute for Occupational Safety and Health determined that inhalation of nanoscale titanium dioxide (TiO₂) is a potential occupational carcinogen and recommended revised occupational exposure limits.

In science, Bradford Hill criteria are typically applied to assess causal relationships. There should be robust evidence to demonstrate things like a strong and consistent association, temporality, a dose-response relationship, biological plausibility and reversibility. The law also has a strong regard for these criteria.

To date, the science on the carcinogenicity of nanoscale zinc oxide and titanium dioxide has largely focused on biological plausibility. Data to inform the other Bradford Hill criteria remain either unknown or equivocal.

In short, much remains uncertain about the ability of nanoscale zinc oxide and titanium dioxide in consumer products to cause cancers, reproductive toxicity or birth defects. However, there are clear signals that such toxicity is possible.

In our experience developments like these, when looked at with the benefit of hindsight, are often viewed (or painted) as watershed moments where emerging risks first became obvious and affirmative action should have been taken.

How to manage these emerging potential risks?

Companies must proactively engage with emerging evidence of risk.

Large companies, in particular, may be better resourced than the government departments tasked with developing regulatory guidelines and standards. When developments like those described above occur, they can ill afford to sit back and wait for guidance from regulatory agencies.

In these circumstances it will be difficult for a company to argue that it acted reasonably in response to the emerging evidence by doing nothing, even in cases where doing nothing might be appropriate. It is far better to have demonstrably carefully considered an issue and reasonably decided, based on robust independent evidence and advice, that there is nothing to do.

Naturally, any response should be proportionate to the robustness of emerging evidence and the scope and nature of potential risks. It would be prudent to consider the following steps, undertaken for the purpose of obtaining legal advice from lawyers with appropriate scientific expertise:

• Review existing product information and labelling to assess the adequacy of current warnings and other instructions.
• Consider whether a targeted review of the scientific state of art on risk may be warranted, with input from appropriate independent expertise. We have developed strong relationships with internationally renowned experts across a range of technical and biological fields.
• Assess internal company procedure to demonstrably stay abreast of relevant scientific developments.
• Review insurance cover, particularly any relevant exclusions. We note that nanoparticle risks are gaining attention amongst insurers. In 2011 the Insurance Services Office Inc announced that it will begin monitoring nanotechnology risks and has developed classifications to assist insurers. It is likely specific policies and exclusions will come to the market in the near future.

Companies taking these proactive steps will have access to privileged independent information and advice in this difficult area on which senior management can confidently rely.

They will be in a far better position to actively safeguard their customers' health and guard against liability than companies passively awaiting the advancement of scientific knowledge and the often delayed response of the government and regulators.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.