Protecting innovation.

For many us, 2006 was spent planning and implementing programs designed to comply with the RoHS and WEEE initiatives. And for some, the past few months may have been spent evaluating what impact the latest EU regulation, REACH, may have on our businesses, or deciphering the labeling requirements of China RoHS. Suffice it to say, we probably spent more than a few hours doing what many refer to as non-revenue generating tasks. At a time when margins are already being squeezed, these types of activities don't help the bottom line. And it's hard to innovate on a strapped budget.

As our industry wrestles with the latest regulations, the burgeoning nanotech field has come under scrutiny by environmental groups including the Environmental Protection Agency. In late November the EPA took its first steps toward regulating nanotech, which until then had not fallen under the watch of any government agency. This apparent knee-jerk reaction comes on the heels of negative feedback from some U.S. water authorities over a new washing machine marketed by Samsung that releases silver ions into the wash water to kill bacteria. The concern was that ionic silver (note: not silver nanoparticles, which the EPA has ultimately regulated) when discharged from potentially hundreds of homes into wastewater treatment plants would kill beneficial bacteria. For those of us embroiled in the RoHS debate it seems more than a little ironic that the first nanomaterial to be regulated would be based on silver.

The EPA's approach so far has been disturbing. It hasn't banned the material, but the regulations require that manufacturers of products containing nanosilver provide scientific evidence that its use will not have a negative impact on public water supplies, water-based ecosystems or human health. Such proof must include product lifecycle analysis. By putting the burden of proof on the manufacturer this regulation is in stark contrast to other laws and regulations governing the chemical industry. The EPA is putting the burden of proof on producers, effectively shifting the cost of compliance to nanotech's bottom line. If you follow the nanotech market as I do, you know there aren't many big companies playing in this space and fewer still that are making big profits, at least this year. It will be interesting to see if they are able to absorb additional non-revenue generating costs into their quarterly reports and keep investors happy.

What's at the basis of the EPA's recent regulations and change of posture toward the nanotech industry? It appears to be a combination of what they know and what they fear. What the EPA knows is silver is a heavy metal that has a known environmental and animal toxicology including the ability to accumulate in organs of the body just like lead, mercury, cadmium and other RoHS-banned heavy metals. It also knows that silver can act as a pesticide and has the potential to kill good bugs as well as bad ones if it leaches into the ecosystem. The fear factors are the unknown attributes of this newly created nanosilver material, and just how physical changes in the silver that created the nano features will affect its acute and long-term toxicology.

I'm not saying we shouldn't have regulations. I was actually quite surprised to discover the nanotech industry was regulation-free. We do, however, need to make provisions that are realistic in breadth, and we need to consider how compliance will be accomplished and at what cost to the industry in question. Perhaps this scenario falls under "other lessons learned from RoHS."

One thing is for certain: Any regulation that pushes the burden of proof for "no harm" back on individual manufacturers will result only in innovation prevention. And that would be disastrous to our economic future. With so many electronics related projects underway that utilize nanoparticles in miniaturization schemes, we should all be concerned over unreasonable legislative positions that would retard innovation and industry growth without demonstrated cause. As I write this, the ink is still wet on this EPA regulation. In a few weeks we'll have a better idea of how they plan to implement this regulation. This may be another fight that we as an industry need to join for the sake of innovation protection.