Multi-component products: each component a separate product with its own expiry period

Introduction

On 16 July 2021, the Dutch Supreme Court rendered an interesting judgement on the qualification of components of a multi-component product as separate products. It determined that each component is a separate product with its own expiry period starting at the time the relevant component was put into circulation. The Supreme Court thereby overturned decisions of Dutch lower courts in which it was held that the multi-component product once fully assembled could be considered an (end-)product.

Facts

A hip prosthesis consists of four separate components: (i) a cup placed in the pelvis, (ii) a head that rotates in that cup, (iii) a taper adaptor, and (iv) a hip stem. The components are combined in the body of a patient during surgery by an orthopaedic surgeon.

The question whether these components could be considered separate products came up in legal proceedings initiated by a patient against a manufacturer of hip prostheses. The patient had instituted a claim for damages allegedly suffered by him as a result of the implantation of a hip prosthesis. 

Each component of the relevant hip prosthesis was manufactured by the manufacturer and delivered to the hospital on different dates. One of the components (the head) was put into circulation more than 10 years before the proceedings were initiated by the patient.

Legal framework

The Product Liability Directive 85/374/EEC (the "Directive") sets out that the liability of a producer should expire after a reasonable length of time. According to the Directive (11th recital), it would not be reasonable to hold a producer liable for an unlimited period of time, as products age in the course of time, higher safety standards are developed and the state of science and technology progresses.

Article 11 of the Directive therefore provides that European Member States must contain a provision in their legislation that the rights conferred upon the injured person pursuant to the Directive shall be extinguished upon the expiry of a period of 10 years from the date on which the producer put into circulation the actual product which caused the damage, unless the injured person has in the meantime instituted proceedings against the producer. This provision is implemented in art. 6:191(2) of the Dutch Civil Code ("DCC").

In the O'Byrne/Sanofi case, the European Court of Justice held that a product must be considered as having been put into circulation, within the meaning of Article 11 of the Directive, when it leaves the production process operated by the producer and enters a marketing process in the form in which it is offered to the public in order to be used or consumed (par. 27).

A 'product' is defined in the Directive (art. 2) and the DCC (art. 6:187(1)) as all movables, even though incorporated into another movable or into an immovable. A 'producer' includes the manufacturer of an end-product (art. 3(1) Directive and art. 6:187(2) DCC).

Decision of the Dutch Supreme Court

In its judgment dated 16 July 2021, the Dutch Supreme Court determined that the hip prosthesis, once it is assembled during surgery following the combination of the four components, cannot be regarded as an (end-)product within the meaning of art. 6:187(1)-(2) DCC that is manufactured and put into circulation by the manufacturer. This would mean that the assembly of the hip prosthesis would start a new 10-year expiry period for product liability against the manufacturer, which cannot be correct according to the Supreme Court. The Supreme Court thereby overturned judgments of Dutch lower courts, in which it was held that the hip prosthesis once fully assembled could be considered an (end-)product.

The Supreme Court held that each component is a separate product with its own expiry right, starting at the time when the relevant component is put into circulation. As the head was put into circulation more than 10 years before the legal proceedings were initiated, the manufacturer can no longer be held liable for the head pursuant to art. 6:191(2) DCC.

However, the Supreme Court also made clear that in the event, in the remainder of the proceedings, the cup is found to be defective, e.g. on the ground that it causes damage when it comes into contact with the head, the expiry period referred to in art. 6:191(2) of DCC commenced on the date the cup was put into circulation. The liability of the manufacturer for damages resulting from the defective cup coming into contact with the head is not reduced by the fact that the manufacturer can no longer be held liable for the head.