Protection from Liability Litigation
Product Liability. Every manufacturer is aware of these two simple words that can effectively cost hundreds of thousands and even millions of dollars in expenses, legal fees, damages and more.
Product liability refers to a manufacturer or seller being held liable for placing a defective product into the hands of a consumer. Responsibility for a product defect that causes injury lies with all sellers of the product who are in the distribution chain.
In general terms, the law requires that a product meet the ordinary expectations of the consumer.
When a product has an unexpected defect or danger, the product cannot be said to meet the ordinary expectations of the consumer.
But what happens if the product that caused the damage/injury was NOT the original?
Counterfeiting today represents a tremendous and ever increasing global threat. Counterfeit products, from goods and merchandise, tobacco products and industrial parts to currency and medicines, circulate across the globe. Yet these products cause real damage to consumers, industries and economies.
The continuous growth of the global counterfeiting industry is a major cause for concern.
Fueled by the proliferation of internet use and social media platforms, the magnitude of global physical counterfeiting is estimated to have increased considerably since the beginning of this century.
This is of course a serious issue in its detrimental effect on the economy, but in our case on the company itself, from:
- Loss of Revenue
- Liability Aspect
- Damaged Reputation.
If a counterfeit product is incorrectly identified as being produced by a specific manufacturer, here is a risk that a claim will be made against the innocent manufacturer instead of the counterfeiter. This leaves the manufacturer exposed to product liability litigation for damages that he did not create.
In defense to such claims, the manufacturer could plead that it was not the producer of the counterfeit product, but it would need evidence to do so, particularly where the counterfeit is a close imitation.
This may involve the manufacturer adducing evidence to compare its product to the counterfeit and instructing experts to prove that the materials and composition are different. In defending a negligence claim, the effect of adducing such evidence would be to deny that the manufacturer owed the consumer a duty of care.
In addition, many manufacturers of products that have proprietary formulas,
may be reluctant to divulge their formulations to prove that the suspected product is counterfeit.
This is why it is important to take preventative action
Proactive Action to Counterfeited Products
Insulating from counterfeit product liability litigation is of prime importance to the manufacturer.
Only by physically distancing himself from supply chain of the counterfeit defective product, can the manufacturer be protected from product liability and/or tort litigation.
The manufacturer needs a simple method to prove that the suspected counterfeit product is not his own. This method should irrevocably prove that the product in question is either a genuine product, produced and distributed by the manufacturer or indisputably a counterfeit.
Using ValiDotz™ for Counterfeit Product Liability Protection
By adding ValiDotz™ tags to its product, a manufacturer can unequivocally establish a specific signature that only the manufacturer knows exists. By presenting that such a signature is embedded in his product line, a manufacturer can prove to any court or jury, that a product that does not carry the ValiDotz™ tag, is in fact a counterfeit product. Therefore, according to product liability laws around the world, the manufacturer is removed from the “chain of distribution” and is not liable for any damages or injuries caused by the counterfeit product.
Furthermore, by using ValiDotz™ tags, the manufacturer takes proactive actions to deter counterfeiters and protect his brand. The manufacturer can have a counterfeit proof, stable, long lasting, specific spectral security tag, that will protect him from future product liability litigation, no matter how good the counterfeit replica is.
But what if the product is an Original one, but was used Incorrectly?
Sometimes, liability claims for damage are caused by mal-use of an original product, like dilution, or due to mixture of inferior products.
Dotz has recognized that while world producers know for certain that their genuine products are safe for use, and perform exactly as promised according to their high standards, they have no reliable method of determining that customers have indeed used their product in the case of malfunction or a liability claim.
For that purpose, we have developed ValiDotz™, a family of unique security markers, which can be easily blended into different systems Like:
- DEF (Diesel Exhaust Fluids)
Once imbedded in the product, ValiDotz™ are invisible and can only be detected using specific excitation sources. Combined with the Inspec™ Forensic detection system, ValiDotz™ offer the following advantages for Producers:
- Certainty in product identification and protection from dilution or mixing with unauthorized or inferior brands
- Manufacturer can prove Dilution and/or Mixture without the need of revealing his formula
- Easy integration with your existing process, requiring minimal investment in equipment
- A quick and easy 3 step authentication method requiring minimal training
- Tagging has no effect on the properties and performance of the original product.
- Robust and stable – ValiDotz™ keep working for you even at elevated temperatures and over extended periods of time.
- Flexible – Codes can be changed if required in the future.
Future Product Liability Litigation
At present, manufacturers can defend against counterfeit product liability litigation by proving that the product was counterfeit. However in the future, manufacturers may have a duty to take steps to prevent and deter counterfeiting. That is due to the fact that counterfeiting has become a “known risk”.
These ever-increasing risks, being well known, makes it very possible that in the future, a court will accept a claim that a manufacturer should be held liable for counterfeit versions of his products, if the manufacturer took no measures to decrease the risk of counterfeiting.
With the prevalence of counterfeiting in today’s markets and the numerous steps available for a manufacturer to make its products less attractive to counterfeiters, a manufacturer who does not take adequate anti-counterfeiting measures could be at risk for tort liability.