Presented by: LEONARD S. KURFIRST

1. Nanotechnology in Consumer Products: An Update on Regulatory Responses and LitigationAmerican Chemical SocietyNational MeetingMarch 26, 2009 Presented by: LEONARD S. KURFIRST

2. DISCLAIMER • The purpose of today’s presentation is to update you on regulatory developments and litigation affecting the use of nanotechnology in consumer products, not to provide legal or scientific advice to any person or corporation. • For questions you may have regarding facts or scenarios applicable to you or your company, you will want to consult with a qualified attorney or consultant. • General observations contained within this outline do not reflect the opinions of Wildman Harrold Allen & Dixon or the American Chemical Society. • Different jurisdictions may have different rules and laws than those mentioned within this presentation.

3. Nanotechnology OVERVIEW DEFINTIONS AND PRODUCTS

4. Definitions • Nanotechnology has been defined as the ability to engineer new attributes through controlling features at a very small scale - at or around the scale of a nanometer. • One nanometer is a billionth of a meter; or about 1/80,000 the width of a human hair. • The International Organization for the Standardization (ISO), Technical Committee 229, defines nanoscale as typically, but not exclusively, below 100 nanometers in one or more dimensions where the onset of size-dependent phenomena usually enables novel applications.

5. Sample Products • Paints (with nanoparticles) • Medicines (coated drugs for targeted drug delivery), • Foodstuffs (‘taste-burst’ foods) • Clothing (stay-clean textiles with nano fibers), • Packaging (specially adapted polymers that prevent contamination and sense decay) • Aerospace, automotive and construction applications (lightweight but tough, heat-resistant nanocomposites) • Cosmetics and sunscreen • Electronics

6. Sample Products

7. Potential Medical/Health Applications • Widespread monitoring of health and the environment will allow detection of the source of such problems before they can injure people. • Improved infrastructure such as water filtration will also help to reduce environmentally-acquired disease. • Today, only a few medical devices are implanted permanently. Nano-built devices will be far more efficient and compact.

8. Example of Medical Application • FDA News Release March 17, 2009 • FDA assessing feasibility of using nanotechnology test to detect anthrax following a bioterrorist attack • The test uses molecular spheres (called nanospheres) covered with thousands of atoms of europium that emit light. The nanospheres are attracted to certain anthrax proteins and act as a signal when anthrax is present. • The research shows that this test is capable of detecting anthrax in quantities that are 100 times lower than current tests. • The Potential for Harm and the Need for Regulation Is Also Evident

9. Nanotechnology REGULATORY DEVELOPMENTS

10. National Nanotechnology Initiative • The National Nanotechnology Initiative (NNI) is a program established in fiscal year 2001 to coordinate Federal nanotechnology research and development. • The NNI provides a vision of the long-term opportunities and benefits of nanotechnology. It serves as a central locus for communication, cooperation, and collaboration for all Federal agencies that wish to participate. • Today the NNI consists of the individual and cooperative nanotechnology-related activities of 25 Federal agencies with a range of research and regulatory roles and responsibilities. Thirteen agencies have R&D budgets that relate to nanotechnology.

11. Participating NNI Agencies

12. NNI Strategic Plan • (NNI) has identified 10 critical research needs to be addressed by participating federal agencies: • Rapid, Multiplexed Detection of Disease Markers • Exposure Measurements for Engineered Nanoscale Material • Nanobiotechnology • Nanotechnology-Based Water Purification and Testing • Future Information Processing Technology from Nanotechnology • Predicting Toxicity Before Manufacturing • Societal Dimensions of Nanoscale Science & Technology • More Energy-Efficient Transportation Materials • Reference Materials for Commerce and Safety Monitoring • Energy Security: Meeting the Energy Challenge

13. NNI Critiques • Review of the Federal Strategy forNanotechnology-Related Environmental,Health, and Safety Research (12/08) • Conducted by National Research Council of the National Academies • Progress in nanotechnology-related EHS research requires advances not just in hazard identification, exposure assessment, standard development, and risk management but in the measurement and characterization of the materials. • More effort is needed to ensure that existing and future research efforts address nanotechnology-related EHS needs in a way that provides stakeholders with the knowledge and tools they need to identify, assess, and manage potential risks. • Legislation reauthorizing the NNI expected during the 111th Congress.

14. EPA / TSCA Inventory Status of Nanoscale Substances • It became important for the EPA to consider the extent to which these substances may be “new chemical substances” under the Toxic Substances Control Act (TSCA), and thus subject to new chemical reporting under section 5(a) of TSCA. • Under section 5(a) of TSCA, a person must submit a Premanufacture Notice (PMN) to EPA at least 90 days before commencing manufacture or import, for a commercial purpose, of a chemical substance not on the Inventory. • On January 23, 2008, the EPA announced that certain nanoscale substances are expected to be “new chemical substances” and therefore subject to TSCA new chemical reporting requirements. • A chemical substance with a molecular identity that is not identical to any substance on the TSCA Inventory is considered to be a “new chemical.”

15. EPA / Nanoscale Materials Stewardship Program • On January 28, 2008, the EPA also launched the NMSP to help provide a scientific foundation for regulatory decisions. • Under theBasic Program, participants are invited to voluntarily report available information on the engineered nanoscale materials they manufacture, import, process or use. • EPA is not requesting that participants develop additional data, only that participants submit existing data. • These data should include information on material characterization, hazard, use, potential exposures, and risk management practices. • Submitted under the Basic Program are 29 organizations and businesses covering more than 123 nanoscale materials

16. EPA Carbon Nanotubes • On October 31st, 2008, the EPA issued a Federal Register notice regarding carbon nanotubes (CNTs). • The notice reminded manufacturers and importers that they must notify EPA 90 days prior to the manufacture or import of new chemical CNTs for commercial purposes, in accordance with TSCA Section 5 regulations for “new” chemicals. • EPA generally considers CNTs to be chemical substances distinct from graphite or other allotropes of carbon listed on the TSCA Inventory. • This first notice warned that the EPA may soon begin to initiate enforcement actions against persons in violation of the PMN provisions.

17. EPA Silica and Alumina • On Nov. 5, 2008, EPA issued a significant new use rule (“SNUR”) under section 5(a)(2) of TSCA for two nanoscale substances, siloxane modified silica and alumina nanoparticles. • With regard to the silica nanoparticles, EPA notes it has concerns for potential lung effects, and potential systemic effects from dermal exposure. • With regard to alumina nanoparticles, EPA states that it has concerns for potential systemic effects from inhalation and dermal exposure. • The agency recommends, but does not require, a 90-day inhalation toxicity test for each substance. • The EPA has indicated that it will eventually shift from its current focus of collecting information to a focus of controlling risks.

18. EPA Nanosilver Petition • On November 18, 2008, the EPA published for public review and comment a petition for rulemaking and collateral relief filed by the International Center for Technology Assessment (ICTA) and other environmental activists. • In general, the petition requests that the EPA classify nanoscale silver as a pesticide, analyze the potential human health and environmental risks of nanoscale silver, and take regulatory actions under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) against existing products that contain nanoscale silver. • Whether EPA will actually issue regulations specific to nanosilver (or other nanoscale materials) under FIFRA or its other statutory authorities remains to be seen.

19. FDA Activity • Specific references to the types of products FDA regulates are found on the FDA Internet Web Site. The following list is provided only for illustrative purposes: • Biological products (vaccines, blood products, tissues) • Cosmetics • Devices • Foods (for humans and animal feed, though generally not meat and poultry) • Dietary supplements • Drugs (human and animal) • Radiation Emitting Electronic Products • Color additives used in food, drugs, cosmetics, devices • Combination products (i.e., drug-device, drug-biologic, and device-biologic products)

20. FDA Activity • According to the FDA, few manufacturers of regulated products have claimed the use of nanotechnology in the manufacture of their products or made any nanotechnology claims for the finished product. • The FDA is aware that a few cosmetic products claim to contain nanoparticles to increase the stability or modify release of ingredients. Similarly, the FDA is aware of nanotechnology-related claims made for certain sunscreens. • The FDA currently is not aware of any safety concerns, but is planning additional studies to examine the effects of select nanoparticles on skin penetration.

21. Manufacturers’ Obligations • Cosmetics must be safe and truthfully labeled. The manufacturer of a cosmetic product is responsible for the safety of the product and its ingredients. • Applications for new drugs must demonstrate the product's safety and efficacy or the product's bioequivalence to a previously approved drug product. • Device applications must show a reasonable assurance of safety and effectiveness or substantial equivalence to a legally marketed device. • Although proprietary product data may not be available, published research may include both analysis and summaries of these data.

22. NIOSH Activity • Current Intelligence Bulletin 60: Interim Guidance for Medical Screening and Hazard Surveillance for Workers Potentially Exposed to Engineered Nanoparticles (2/09) • Concerns have been raised about whether workers exposed to engineered nanoparticles are at increased risk of adverse health effects. • The current body of evidence about the possible health risks of occupational exposure to engineered nanoparticles is quite small. • While there is increasing evidence to indicate that exposure to some engineered nanoparticles can cause adverse health effects in laboratory animals, no health studies of workers exposed to the few engineered nanoparticles tested in animals have been published.

23. NIOSH Recommendations • As research into the hazards of engineered nanoparticles continues, the following recommendations are provided for workplaces where workers may be exposed to engineered nanoparticles in the course of their work: • Take prudent measures to control exposures to engineered nanoparticles, particularly fine particles that might be inhaled • Conduct hazard surveillance as the basis for implementing controls. • Continue use of established medical surveillance approaches, including periodic medical examinations at regularly scheduled intervals and specific medical screening tests when warranted.

24. LITIGATION UPDATE

25. Potential Causes of Action • Product Liability – Elements • In general, a manufacturer's responsibility is to market safe products. A manufacturer is held strictly liable when one of its products proves to have a defect that causes injury to a human being. • Many products, even the most ordinary, pose some level of risk, and the law recognizes that it is often not possible to design a totally safe product. However, manufacturers are legally obligated to warn consumers about known dangers.

26. Potential Causes of Action • Toxic Tort – Elements • Since manufacturers may forsee potentially harmful effects from toxins or chemicals, both in terms of generating the product and in the end product itself, manufacturers are responsible for attempting to minimize harm. • Manufacturers owe a legal duty of caution and prudence to consumers of the product and to community members who live near a production facility. • To establish “causation” in a toxic tort case, the plaintiff must: • Prove general causation (i.e. the chemical or toxin is capable of causing the harm alleged) and • Specific causation (i.e. there was a sufficient dose of the chemical or toxin to cause the harm alleged).

27. Medical Literature • Effects of Exposure to Engineered Nanoparticles* • Animal studies with some types of engineered nanoparticles have caused adverse lung effects and cardiovascular effects (e.g., inflammation, blood platelet activation, plaque formation, and thrombosis) • Other animal studies have demonstrated that discrete nanoparticles may enter the bloodstream from the lungs and translocate to other organs while other studies have shown that discrete nanoparticles (35-37 nm count median diameter) that deposit in the nasal region may be able to enter the brain by translocation along the olfactory nerve. • A broader review of the human and animal data can be found in the NIOSH document Approaches to Safe Nanotechnology: An Information Exchange with NIOSH. *http://www.cdc.gov/niosh/docs/2009-116/

28. So Far, Nano Claims Not Ripe • No known reports of injury or human disease due to nanomaterial exposure • No known cases or decisions involving nanomaterial injuries • No known pending cases involving nanomaterial injuries • No well established standards against which to judge a manufacturer’s conduct

29. BPA’s Cautionary Tale • History of BPA • A chemical used for 50 years and specifically approved by the FDA for food contact products and containers. It still is. • Many beneficial uses, including medical equipment, food can liners, shatter resistant baby bottles and water bottles, and electronics. • No medical studies to confirm that BPA has caused any harm in humans, although some animal studies exist. • Recent events • No longer will be used in baby bottles • Bills have been introduced in Congress to ban its use in all food and beverage containers • Manufacturers of BPA bottles now involved in multiple class actions • What Happened??

30. Recent Strategies for Banning Chemicals • Attacks at the National Level • File petitions against federal agencies (e.g. the nanosilver petition) that seek to force intervention • File nation wide consumer fraud class actions against manufacturers that only make claims for product reimbursement, not personal injuries (which are much more difficult to prove) • Focus on children and press legislators to act • Fund and publicize poorly controlled studies that support underlying agendas • Flood marketplace with exaggerated interpretations of scientific studies through the use of “press releases”, websites and blogging. • Attacks at the Local Level • Press for bans in city councils and state houses • Create inconsistencies between states and local governments, thereby forcing federal agencies and legislators to act.

31. Recommendations and Conclusions • Continued nanotechnology research is needed, with industry working in close partnership with academic institutions and those federal agencies involved in the NNI. • There must continue to be an industry wide commitment to disseminate accurate information in a timely and effective manner to balance fear generated by others. • Recognize that the marketplace and local legislatures may be battlegrounds just as important as the courts and regulatory agencies when it comes to responding to well organized groups that have public agendas to ban certain chemicals and products.

32. Thank You Thank you for the opportunity to share with the American Chemical Societyan update on Regulatory Responses and Litigation insights on Nanotechnology in Consumer Products Leonard S. Kurfirst, Partner Wildman, Harrold, Allen & Dixon LLP 225 West Wacker Drive Chicago, IL 60606-1229 T: 312-201-2702 F: 312-416-4761 kurfirst@wildman.com 32