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28 August 2019
The EU Medical Device Regulation (2017/745) (MDR) was introduced in May 2017 and sets out the legal framework for medical devices in Germany. The MDR repeals the EU Active Implantable Medical Devices Directive (90/385/EEC) and the EU Medical Device Directive (93/42/EEC) and will fully apply from May 2020.
The MDR does not provide a definition of 'medical software' (only general statements in a few specific provisions) and provides only limited rules on liability (eg, Article 11(5)). Therefore, the following general rules must be taken into account:
Following the European Court of Justice Decision C-219/15 of 2 February 2017 (Recital 58), it is clear that these rules are applicable in parallel.
Liability under the German Act on Product Liability and the EU Product Liability Directive requires that medical software is qualified as a product; however, this qualification is controversial and has been widely debated.
According to Section 2 of the German Act on Product Liability, the definition of a 'product' includes all movable things, even things that are incorporated into other movable or immovable things (eg, electricity). However, neither the German Act on Product Liability nor the EU Product Liability Directive provide a definition of a 'thing'; in fact, no EU law provides such a definition.
In this regard, a reference to Section 90 of the German Civil Code is conceivable. Section 90 considers 'things' to be corporeal objects (ie, sensorially perceptible, spatially limited and controllable). Software as such is not sensorially perceptible, since it can be made perceptible only with aids (eg, other software that displays the presence, the source code or the result of a data process). Further, software is not spatially limited, which requires that a thing has a physical limitation in 3D space. While software is limited insofar as the source code has a beginning and an end, this cannot be deemed physically limited.
Some favour the notion that software is spatially limited when it is saved on a data carrier. Data carriers are indisputably physical objects limited in 3D space. Thus, software saved thereon would be spatially limited by the data carrier's physical properties. However, this use of a data carrier to justify software as being spatially limited is at least impracticable. It begs numerous questions that in turn lead to additional impracticalities, including whether:
Further, the result would be two distinct physical objects (ie, software and data carrier), even though one of them would not be a physical object itself.
In other cases, it might be conceivable that an artificial limitation could lead to a spatial limitation of certain goods, which would thus be considered 'products' (eg, gaseous or volatile substances). However, software is not comparable to such cases, since it is essentially something else (ie, it contains no chemical or physical microparticles) – namely, an intangible good.
Ultimately, storing software on a data carrier results in the software being duplicated, rather than delimited. In this regard, software is closer in kind to a book's contents, which is – in contrast to the book itself – not spatially limited and therefore not a product.
Since software is neither sensorially perceptible nor spatially limited, the question of whether software is controllable can remain unanswered. However, it seems conceivable that software is at least controllable.
Following the above understanding, medical software cannot be considered a 'product' under the German Act on Product Liability and the EU Product Liability Directive. However, a liability can be given under German tort law, particularly under Section 823(1) of the German Civil Code (Produzentenhaftung) because:
Therefore, Section 823(1) also applies to products which do not fall under the German Act on Product Liability and the EU Product Liability Directive.
In light of the major industrial changes that have taken place since the EU Product Liability Directive's introduction in 1985, the European Commission is reviewing the legal framework and intends to introduce new guidance in 2019. This guidance is expected to, among other things, take the developments in respect of software into account and amend the definition of a 'product'. It will also affect the German understanding of the EU Product Liability Directive and its implementation.
For further information on this topic please contact Fabian Huber or Caroline von Nussbaum at Simmons & Simmons LLP by telephone (+49 2 11 4 70 53 0) or email (firstname.lastname@example.org or caroline.vonnussbaum@Simmons-Simmons.com). The Simmons & Simmons LLP website can be accessed at www.simmons-simmons.com.
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