LS&HC Horizons 2023 - Flipbook - Page 42
Hogan Lovells | 2023 Life Sciences and Health Care Horizons | Patents, Litigation, and Beyond
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The product vs. service debate: health care software as a “product” for liability purposes
As part of the ongoing digital revolution in
health care, challenging legal issues surrounding
software in the context of products liability
continue to evolve. The longstanding question
of whether and to what extent software should
be treated as a “product” for purposes of
products liability remains a gray area in many
jurisdictions around the world.
In the U.S., most decisions to date, as well
as both the Second and Third Restatements
of Torts, suggest that intangible items like
computerized information are not “products.”
But, as a recent decision by the U.S. Court of
Appeals for the Fourth Circuit implies, the
“product vs. service debate” is far from settled.
In Lowe v. Cerner Health Services, the
“product” at issue was an electronic health
records (EHR) system — a software system
designed to allow health care providers to
submit orders and prescriptions and record
medical information electronically. No. 202270, 2022 WL 17269066 (4th Cir. Nov. 29,
2022). Lowe arose from a doctor’s order for
“continuous pulse oximetry” entered into the
EHR software developed by the defendant
and configured/deployed by the purchaser, a
hospital. The doctor had intended for the order
to be effective from the time she entered it that
afternoon, but because she selected “once” and
“daily” from the system’s dropdown menus,
the system defaulted to a “start” time of 10:00
a.m. the next morning in accordance with the
parameters configured by the hospital. The
default 10:00 a.m. start time was correctly
reflected on the final approval screen, which
Lauren S. Colton
Office Managing Partner,
Baltimore
displayed a consolidated listing of all unsigned
orders the doctor entered that day requiring
final approval. However, since the doctor
had entered several orders that day, rather
than scrolling to review the order in question,
she simply used the “approve all” function.
Consequently, the patient was not monitored
continuously, experienced respiratory distress
and suffered a severe and permanent disability.
After the plaintiff settled with the hospital, she
sued the developer of the EHR software system
for negligent design and failure to warn. The
district court granted summary judgment for
the developer after finding the plaintiff failed
to establish that the EHR system violated
accepted safety standards where it complied
with government standards, and “provided no
evidence” that the defendant knew or had reason
to know that its software was dangerous for its
intended use such that it owed a duty to warn.
The Fourth Circuit, however, reversed the lower
court’s decision and held that the plaintiff’s
experts had sufficiently demonstrated that the
software did not meet other, non-governmental
standards and that expert testimony, combined
with a 2009 complaint regarding the system’s
“default start times” feature, was enough to
establish a duty to warn that the software
could change the start time for treatment
from what physicians intend depending on its
configuration.
Although the question of whether the intangible
EHR software system was a “product” for
liability purposes was never expressly raised in
the case (presumably because Virginia does not
Julie Schindel
Senior Associate, Baltimore
recognize strict liability), that’s exactly how the
Court treated it. As a result, the opinion suggests
the outcome would have been the same under
a strict products liability theory, had one been
available.
Whether Lowe is simply an outlier in its
treatment of EHR software as a “product” for
purposes of U.S. products liability jurisprudence
or suggestive of a broader impending shift in
the “product vs. service” debate for software
remains to be seen. With the continued
uncertainty on this issue and the ever-increasing
use of software in the health care context,
software developers should be mindful of the
following considerations when developing and
selling health care software:
• include indemnification provisions in
customer contracts and ensure language is
drafted to provide for broadest protection
possible;
• provide clear, unambiguous and robust
warnings/automated notifications to users
and consult with product liability specialists
as needed;
• if possible, avoid incorporating into software
certain streamlining features, such as
“approve all,” and “sign all,” features for
patient orders, prescriptions, or any other
item relating to a patient’s treatment; and
• consider liability insurance issues
as appropriate.
