UK: Hoverboards Under Attack

Multiple UK retailers have asked customers to throw out their hoverboards, the self-balancing scooters that have clambered onto holiday wish lists this season, due to suspected safety issues with the devices. The retailers and the UK's Chartered Trading Standards Institute (CTSI) have said the UK hoverboards were deemed unsafe due to a noncompliant plug for electrical outlets and other parts. This comes at the same time that thousands of these items have been halted at the UK border due to the government's safety concerns.

Hoverboards seem to be one of the most popular "toys" of the 2015 holiday season, and customer interest is likely to last for a while longer. Hoverboards are wheeled devices that a user can balance on and move and control by leaning. The idea was widely shared in the 1989 film Back to the Future II, although the idea may have been around for longer, and at least one popular and similar product has been on the market since December 2001. For a futuristic-sounding device, hoverboards aren't that complex. Many are built with readily sourced components such as electric motors and lithium-ion batteries, as well as gyroscopes that are contained in most smartphones. The devices let riders accelerate or turn by leaning, and some models can move at speeds up to 10 miles an hour. While most cost between $300 and $600, some cost as much as $1,500.

This rise in popularity has caused an influx of less expensive variations of the device to enter the marketplace. Along with the quick rise in popularity of this device has come increased scrutiny over their safety, and in particular the safety hazards associated with the device's lithium-ion battery.

This has raised more safety concerns after reports that some have caught fire. The reported fires have been linked to overheating of the boards' lithium-ion batteries. In our experience, an overheating lithium-ion battery can be attributable to outside factors not associated with the manufacture or design of the battery, but rather improper handling by the user.

In an email to UK customers, an online consumer retailer stated that it has begun to process refunds for specific affected devices on behalf of customers. If a customer purchased a hoverboard as a gift for someone, the online consumer retailer asked the customer to notify the recipient.

This retailer also sent out a second email to its customers who purchased hoverboards that have not had a safety problem, looking to provide some additional safety tips on using the product.

Another online retailer said that it will no longer sell them because of safety concerns.

Worries about battery fires have led to a ban of hoverboards by most major air carriers as well as the U.S. Postal Service. A number of airlines worldwide have banned the carriage of hoverboards because of fears that quality shortfalls in their construction pose fire hazard onboard flights. This is interesting since a similar ban has not been placed on other devices that use lithium-ion batteries, such as laptop or notebook computers. There have been recalls associated with the batteries of these devices in the past, but the airlines did not ban the stowage of these devices in the past when such incidents were reported. "Out of an abundance of caution," the devices will be restricted to ground shipping, according to a press release issued by the U.S. Postal Service on December 16, 2016.

Scrutiny over hoverboards in the United States

Meanwhile in the United States, similar scrutiny has fallen upon hoverboards. The Consumer Product Safety Commission (CPSC) is investigating a dozen reports of hoverboards overheating.

In addition, several major U.S.-based retailers have temporarily stopped selling some brands. The CPSC is accelerating an investigation into the devices after tallying 12 specific incidents of them catching fire, but did not name the makers of the devices involved in these incidents.

The safety watchdog's engineers in Maryland are examining the boards that burst into flames and inspecting others being sold in the United States to closely look at their components, particularly their battery packs.

"I have directed agency staff to work non-stop to find the root cause of the fire hazard, how much of a risk it might present, and to provide consumers with answers as soon as possible," CPSC Chairman Elliot Kaye said in a statement Wednesday.

The commission is recommending that consumers don't charge the hoverboards overnight or when they are not home, and avoid buying them from places such as mall kiosks and online retailers where the product's origin is difficult to track.

Many hoverboards are built with readily sourced components, such as the electric motors and lithium-ion batteries, as well as the gyroscopes. The majority of the hoverboards are made in the southern Chinese manufacturing hubs of Shenzhen and Zhejiang province's Jinhua. On a Chinese e-commerce site, it was reported that a search for "self-balancing scooters" – its most popular search early this week – brings up 3,790 suppliers that can ship individual or bulk orders worldwide.

Many of these manufacturers are not properly registered with the Chinese government and other international governing agencies/organizations. One executive with a Chinese manufacturer that owns a credible and well-known self-balancing scooter brand stated about these lesser known manufacturers, "They may open one day and the next day, they might shut down and disappear."

In the mix – a dispute over the patent

Adding to the chaos is a dispute in the United States over who controls the patents to the technology.

A well-known U.S. distributor claims it has the rights to use the U.S. patents, after licensing the technology from Shane Chen, a U.S.-based serial entrepreneur. Mr. Chen said he first got the idea for a self-balancing scooter in 2011 and filed for a patent in 2012. He launched a fundraiser on Kickstarter in 2013 to fund his idea for an "auto-balancing, electric transporter with gyro technology" called the Hovertrax, shortly after developing his own prototype, he started to see copycat devices, he said.

In China, manufacturers say they have been making self-balancing scooters for more than a year. Zang Longjie, chairman of another Chinese hoverboard maker, said the company started selling hoverboards under its own brand last year and doesn't make them for U.S. brands. Mr. Zang says his brand had no incidents of the devices catching fire.

We suspect in the near term that consumers and insurers will be battling for years in U.S. and UK courts seeking damages, subrogation and intellectual property violations, all arising from the "hottest" toy of this holiday season.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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