April 27, 2017

Statement of Acting Chairman Ann Marie Buerkle on the Proposed Standard for Table Saws

I regret the Commission’s vote today to approve publication of a proposed standard for table saws.  I believe the proposal is defective and does not merit approval at this point.  The major shortcomings relate to (1) the scope of the standard; and (2) the lack of assurance that manufacturers will be able to license the technology needed to meet the standard on reasonable terms.

    A. The Scope of the Standard

The notice of proposed rulemaking (NPR) points out that there are three distinct types of table saws.  Some are portable, some are not.  Some run on ordinary household electrical wiring, others cannot.  Some table saws are 25 times more expensive than others.  This leaves a burning question: how do the different types of table saws differ in terms of injury rates?  Does it make sense to apply the same performance requirements to all of them or not?

To help answer that question, in 2007 the CPSC staff designed a special study of table saw injuries from the National Electronic Injury Surveillance System (NEISS).  The goal was to discover which type of table saw was responsible for each injury and then to develop national estimates for the proportion of table saw injuries attributable to each type of saw.

Unfortunately, the results of that study were not made public until 2011.  As the details finally became known, commenters pointed out that the results were internally inconsistent and so could not be used to classify injuries by saw type.  Given the importance of the issue, the staff designed another NEISS special study in 2014.  Due to different problems, however, this study also failed to shed light on which table saw type was responsible for particular injuries.

The NPR explains why it might not be appropriate to apply the same standard to three different saw types:

“Because of the differences in the physical characteristics, the use patterns, and the likely population of users of each of the table saw types (i.e., bench, contractor, and cabinet saws), an independent evaluation of the benefits and costs for each table saw type could be useful.  For example, the costs of the proposed rule could exceed the benefits for one or more saw types, even though, in aggregate, benefits could exceed costs for the market as a whole.”

The staff’s persistent efforts to develop injury estimates for each saw type underscore the importance they assign to this factor.  Indeed, despite the prior setbacks, the staff has launched a third special study, following up all NEISS table saw cases as they are reported throughout 2017.  Today, the Commission has also directed staff to attempt to learn what type of table saw was associated with blade-contact injuries reported through NEISS in 2016.  Nevertheless, the Commission majority refuses to wait for the results of these studies before proposing a standard.  The result is a “one size fits all” proposal that glosses over the differences among the saws in this broad category.

In my view, this approach is a serious mistake.  As the staff has recognized all along, promulgating the same standard for three different types of saws may well impose costs that are not justified by the benefits.  The proposed generic standard is expected to wreak havoc on the table saw market.  The staff predicts that some saws will more than double in price and other manufacturers will exit the market.  Under these circumstances, the Commission should not be taking shortcuts, but getting the data that is needed to make responsible decisions.

My colleagues insist upon a two-track approach—securing public comment on a generic saw standard at the same time as we develop the data needed to determine whether such a standard is appropriate.  Thankfully, they contemplate a second round of comment when the necessary data become available.  In my view, however, we should know the answers to these questions before we shape our proposal. 

    B. Creating a Monopoly

The second serious problem with the proposed standard is that it almost certainly would require the use of patented technology, and the Commission lacks sufficient assurance that the patent holder will license the technology on fair, reasonable and non-discriminatory terms.  In effect, we may be granting a monopoly in favor of one company that could control the supply of table saws and charge whatever it wants without any effective competition.

In essence, the proposed standard requires table saw manufacturers to incorporate an active injury mitigation (AIM) system.  An AIM system performs two distinct functions: (1) it must detect actual or imminent human contact with the table saw blade; and (2) it must react by stopping the blade or taking other action so as to prevent a serious injury. 

SawStop first introduced AIM technology on table saws in 2004 and on a number of different models thereafter.  The firm’s principal, Dr. Stephen Gass, and the affiliated entity SD3 LLC, reportedly hold over 100 different patents that relate to AIM technology on table saws.  No other manufacturer even attempted to introduce a table saw employing AIM technology until Bosch finally did so in 2016.  Dr. Gass promptly brought suit in federal court for patent infringement and separately asked the International Trade Commission (ITC) to block importation of the Bosch saw on that basis.  Thus far, that effort appears to be successful, leaving SawStop as the sole provider of table saws employing AIM technology.

In recent years, Underwriters Laboratory (UL) has proposed to add AIM performance requirements to the voluntary standard for table saws, UL 987.  In the NPR approved today, it is reported that the effort failed “because the table saw industry objected to making AIM requirements part of the UL standard.” 

This doesn’t tell the whole story.  During development of the voluntary standard, several members of the Standards Technical Panel advised UL that the proposed performance requirements (much the same as CPSC’s proposed standard) implicated SD3 patents.  Pursuant to its patent policy, UL asked Dr. Gass to “identify the specific patent claims that are essential for compliance with the AIM[] requirements” and, with respect to all such claims, to “confirm that a license will be made available to applicants desiring to utilize the license for the purpose of implementing the standard . . . under reasonable terms and conditions that are demonstrably free of any unfair discrimination.” 

In response, Dr. Gass raised a number of objections to UL’s request.  Among other things, he argued that the proposed voluntary standard was a performance standard, not a design standard, and therefore would not necessarily require table saw manufacturers to adopt his technology.  He stated that SD3 “declines, at present, to provide any type of statement concerning its patents, other than to say SD3 reserves all its patent rights.”  

UL’s proposal did not achieve consensus.  The Power Tool Institute (PTI) opposed the addition of AIM technology to the voluntary standard for several reasons.  The first stated reason was that after years of research, the only known technology for meeting the standard “may be covered by ‘Standards-Essential’ patents that are not likely to be licensable on “Reasonable and Non-Discriminatory” terms.  In other words, UL’s proposal to add AIM technology to the voluntary standard might have made it impossible for any manufacturer other than SawStop to comply.

In the present situation, the Commission is proposing a standard that is much like UL’s failed voluntary standard.  Like UL, the Commission has no assurance that manufacturers will be able to meet the proposed standard without infringing on SawStop’s patents or that SawStop will be prepared to license the technology on reasonable terms. 

At the staff’s briefing on the table saw NPR, one of my colleagues claimed that Dr. Gass has in fact pledged to license the AIM technology.  He pointed to SawStop’s 2003 petition asking the CPSC to mandate AIM technology.  Others have criticized that 2003 licensing offer as unreasonable.  When my staff and I recently met with Dr. Gass, moreover, he made clear that he would no longer stand by the 2003 offer without additional conditions.  According to PTI, some table saw manufacturers have tried in recent years to negotiate licensing agreements with Dr. Gass, but met with escalating demands or outright refusals.

Under these circumstances, I am not at all comfortable with the proposed standard.  I do not begrudge Dr. Gass the royalties he is due for his original ideas.  But neither do I want to advance a proposal that gives him a blank check to monopolize the table saw market.  I think that before proposing a table saw standard, we should clearly understand the extent to which manufacturers are dependent on patented technology and the willingness of the patent holders to grant licenses on fair, reasonable and nondiscriminatory conditions.  If mandatory standards cause sharp price increases for table saws, some consumers may shun the safer products in favor of cheaper but more dangerous alternatives.