Competitors' Products' Compliance with Chemical Control Laws and Regulations

Date: Jul 18, 2006

Often, competitors' products are believed to be "very similar" to one's own products. The belief is usually based on analyses; sometimes it is based on hearsay. Companies can be encouraged in this belief by the hope that if those competitor's products have satisfied their pertinent regulatory burdens, then one's own products will not need to meet those same burdens.

In our experience, it is difficult to confirm that a competitor's product is "the same" or that the regulatory path for a "very similar" product is clear. It is very difficult to be certain of the specific chemical identity of a competitor's product. In general, the information that is available or can be ascertained about a competitor's product might be confidential, incorrect, or not sufficiently detailed or specific. Therefore, usually no confirmation exists that a product is "the same." In such cases, any such reliance can be fragile at best and very expensive at worst.

Two products can be "very similar," but not "the same." Certain products can be quite different in appearance and in physical and chemical properties and be "the same" (have the same formal chemical description). Certain other products can be quite alike in appearance and in physical and chemical properties and not be "the same." Due to peculiar chemical naming conventions, feedstock identity problems, and different synthetic routes, so-called similar products are often only related and not even "very similar."

In many cases, only an evaluation of correct information by qualified experts can confirm whether two substances are identical for purposes under the Toxic Substances Control Act. This determination also can be dependent on the country and the law for which the determination is made. For example, a polymer in the U.S. might not qualify as a polymer in Canada, Europe, or Japan.

It is not unusual that substances are identified incorrectly. Therefore, comparing two chemical descriptions for congruency is not valid if either or both substances are not properly identified. Sometimes two substances are incorrectly described as the same, but they are not the same. This is unfortunate, and it happens too frequently. The reverse also occurs; two substances are not the same because they have different names, when in fact the substances are identical.

A competitor might have complied with TSCA, but in complying might not have caused the substance to be listed on the TSCA Chemical Substance Inventory (Inventory). For example, a substance manufactured or imported at up to 10,000 kilograms per year could have been commercialized because a Low Volume Exemption Application (LVEA) was granted, but the chemical substance will not be listed on the Inventory. Moreover, the commercial activity granted, which is a kind of license, is only granted to the submitter of the LVEA.

Manufacturers and importers might not be (and might not know they are not) in regulatory compliance. This is usually a lapse or the result of a mistake, but manufacturers and importers are held to a high standard of civil liability. Monetary penalties for non-compliance in the U.S. can be very high, up to $32,500 per substance per day. Willful, knowing violations can be punished by additional monetary penalties and imprisonment. Hopefully all manufacturers or importers know there is a law and regulations that govern the introduction of new chemical substances. Sometimes they do not know much more than that. By following what the competition is doing in such circumstances does not excuse or lessen penalties for a violation of TSCA, which is a strict liability statue.

If the correct, specific chemical identities of products are listed on the non-confidential TSCA Inventory they may be manufactured or imported by anyone immediately. However, they can be so listed and subject to other requirements. Therefore, even if all of the issues described above are resolved, one might find that the other requirements are burdensome. The wisest course is to be smarter than the competition.

Keller and Heckman's international chemical control practice group has extensive and unique knowledge, skill, and experience in bringing a wide range of new industrial chemicals (including biochemicals and nanochemicals) into commerce and maintaining the commercialization of existing industrial chemicals throughout the world. In addition to chemistry review and verification services, we stand ready to assist with other regulatory matters.