Just because a drone is manufactured in a foreign country doesn’t mean the manufacturer can avoid getting sued in the United States. In a decision on April 21, 2016, the Colorado Court of Appeals concluded that Align, a Taiwanese company that manufactures remote control helicopters and related parts, could be sued in Colorado for the plaintiff losing his eye when the main rotor broke off. The plaintiff, a Colorado resident, had bought the helicopter from Hobby Town Unlimited, a retail store in Ft. Collins. Horizon Hobby, another US company, had been Align’s distributor.
Relying on well-established US Supreme Court precedent, the Colorado court concluded that:
- Align provided marketing materials to its distributors, attended trade shows in the United States where Align actively marketed its products, and established channels through which consumers could receive assistance with their Align products.
- Align injected a substantial number of products into the stream of commerce, knowing that those products would reach Colorado.
- Align took steps to market its products in the United States and Colorado.
Do the Court’s conclusions sound familiar? Well, they should because they describe the manner in which most non-US manufacturers of drones sell their products in the United States.
So, what are the takeaways?
- If you’re a non-US manufacturer who wishes to distribute or sell your drone or related part in the US, you can be sued in the US.
- If you’re a US retailer or distributor of a non-US manufactured drone or related part, you will be sued.
- If you’re a US retailer or distributor of a non-US manufactured drone or related part, carefully examine the terms and conditions pursuant to which you are acting as a retailer or distributor for the non-US company. If the product hurts someone due to a design or manufacturing defect, the way to protect yourself, in addition to having your own insurance, is to have contractual recourse — indemnity, duty to defend — running in your favor from the manufacturer.
With the number of non-US manufactured drones being sold in the United States, US distributors and retailers should proceed with great care in establishing relationships with foreign manufacturers.
Originally posted May 4, 2016