United States: Mobile Apps − Has The Marketplace Downloaded Potential Product Liability Risk?

For many consumers, it is hard to remember performing a daily routine without using a mobile application. App usage starts almost immediately − with a morning alarm that wakes you up slowly or with a coffee waiting for you at your favorite coffee shop. Consumers are making purchases, reading the news, transferring money, diagnosing a migraine and playing interactive videogames, all without lifting their heads from their smartphones.

The app economy has grown from $1.9 billion in 2008 to $143 billion in 2016. (The App Association, State of the App Economy, 4th Edition) Product liability exposures have increased proportionately. Related liability concerns have become a critical issue for software designers, hardware manufacturers and their insurers.

How do the services offered by mobile apps fit into U.S. product liability law? Are mobile app manufacturers responsible for the indirect injuries and distractions that they can cause consumers? Are mobile app manufacturers required to warn of these distractions at the same level as product manufacturers? While the answers to these questions will become clearer over the next several years, consumers and manufacturers need guidance now with respect to the very present danger of product liability litigation.

Mobile Apps and Product Liability Law
Mobile apps may be considered an extension of offered goods and services. They raise the question of how injuries resulting from apps and the negligence of their developers will be exposed in product liability litigation. Another issue is whether the author (providing design and specifications) of the mobile app or the creator/developer (providing development and design services) will be targeted.

Due to the FDA's oversight and regulation of medical devices, mobile app manufacturers have more guidance and ability to understand the risks and potential exposure of mobile medical apps. However, the potential exposure for manufacturers of "everyday" apps providing games, shopping and transportation services remain unregulated and unclear.

For example, according to the FDA's regulatory approach for mobile medical apps, the manufacturer of a mobile app is defined as the person who creates the original idea/initial specifications. While not regulated by the FDA, this is an important factor for all mobile app developers to consider in app development agreements. All mobile app manufacturers should also be familiar with the FDA's mobile medical app regulations. Regardless of an app's "true manufacturer" or whether it qualifies as a product subject to certain regulations, it's increasingly likely that it will be subject to U.S. product liability law and that its development and distribution may well spawn litigation.

Personal Injuries During App Usage
Since the launch of "Pokemon Go" in early July 2016, headlines related to the mobile app have included a car accident, a shooting, a robbery and a request from a fire department to stop calls to the station regarding the search for the fictitious species. The mobile app has resulted in personal injuries to players and annoyed residents who wish to prevent Pokemon and its players from entering their properties.

In one instance, a 15-year-old girl was hit by a car while engaging with the mobile app on her smartphone. This was allegedly due to the mobile app's encouraging players to wander the streets and cross traffic during rush hour. In another incident, a motorist attempting to catch Pokemon crashed into a tree.

The interactive nature of Pokemon is leading the way in interactive mobile apps, which are likely to increase in number. These mobile apps raise the issue of whether the app manufacturers can be held responsible for injuries caused by app usage and their failure to warn of these dangers.

Are Mobile App Manufacturers Required to Provide Adequate Warnings?
This month, a California Judge tentatively rejected defendants' efforts to dismiss a defective-product lawsuit filed by the Coalition Against Distracted Driving against all of the major cell phone and software manufacturers. The lawsuit demanded that the companies increase labels and warnings on the devices and spend $1 billion a year to help educate the public about the risks of distracted driving.

Allegations that these manufacturers allow drivers to receive notifications and updates while driving might extend to the mobile apps that give rise to these notifications. It is safe to assume that both smartphone manufacturers and consumers may start to assign blame to the apps manufacturers for injuries resulting from distracted driving.

Will All Mobile Apps, Such as Mobile Medical Apps, Face Regulation and Product Liability Exposure?
Fitness, wellness and medical apps collectively account for one of the largest markets among the app community. Consumers use these apps to track their weight and blood pressure, gather personal health information to share with doctors and even diagnose their symptoms.

Mobile Medical Apps (MMAs) are unique in that they can be considered as medical devices and are therefore subject to FDA regulations. The FDA issued Final Guidance on Mobile Medical Apps in response to the growing number of apps. It is clear that the "FDA intends to apply its regulatory oversight to only those mobile apps that are medical devices and whose functionality could pose a risk to a patient's safety if the mobile app were to not function as intended." (FDA Final Guidance, updated February 9, 2015)

Classification of each MMA can be vague, as the FDA confirmed that some apps listed in the guidance may be considered MMAs while others may not. The FDA specifically targets the medical apps that function as medical instruments, such as apps that are connected to and control blood pressure machines or insulin devices. The FDA considers apps that help track a consumer's medical data and do not provide specific treatment suggestions to be lower risk and not subject to FDA regulation.

It is clear that the evolution and increase of these mobile medical apps will result in vague guidance and potential liability to app manufacturers. The FDA is focused on the performance and design of the medical app, and a malfunction of the MMAs' operation can expose MMA manufacturers to product liability claims.

As is the case with any new disruptive technology in the marketplace, its potential product liability risk is uncertain and will evolve over the course of time. We are closely watching the mobile app economy since this will be an area for increased product liability litigation in the future. As always, we welcome the questions and comments of our readers.

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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