The Risks of Innovation

How to navigate the legal concerns of new glazing technologies
Matt Johnson
February 15, 2019
COMMERCIAL, RETAIL, FABRICATION : LEGAL

Safety glasses and construction hat

For many years glass and glazing were considered passive participants in a building’s performance. Innovation is changing that approach. Today, the use of glass in active and dynamic energy management systems is growing. Now, glazing integrates variable opacity and shading elements that are linked to ventilation and solar generation. These are just a few current innovations that tie glazing to building elements in the active management of a structure’s overall performance and occupant health.

Managing these products and new customer demands is complex. So too are the risk issues surrounding new innovations. These systems are often supplied by third parties and must be brought together by glazing trades, and we have seen that mixing give rise to new claims. 

This article presents several key risk management considerations when working with new glazing innovations. 

The systems

Vertical integration of manufacturers is disappearing. Vendors are relied on to supply unique components at lower cost and increased quality. Sourcing and managing the contractual relationships within third-party supply arrangements is legally critical. 

Companies must pay special attention to intellectual property protections for integrations and proprietary design elements that integrate these elements into systems. Even trades must consider whether their own unique method or specialty tooling for bringing elements together is worth seeking patent protection for innovation or process.

Warranties for incorporated systems must be managed. Often, glazing system manufacturer warranties conflict with third-party systems that must embed within the glazing system itself. Contract and warranty commitments must be balanced at the project level to be sure claims of defect or deficiency have a potential remedy before heading to the courthouse.

Data and integration

Like most areas, glass and glazing innovation is currently focused on the internet and the Internet of Things, the linking of cyber-innovation to physical innovation. But as physical things begin to generate, collect and share information with themselves and others, Big Data risks must be considered.

Privacy is an ever-present data concern. Systems that collect information about how owners use glazing, as well as their habits and the performance impacts of that use, develop information that is personal to the user. And as Facebook and Google show, there is value in knowing human habits from seemingly everyday activities. Ensuring data privacy for glazing innovation cannot be overlooked, including something as simple as opening or closing blinds.

Installers must also recognize that these complex systems require complex linkages. Communication between imbedded building systems is essential so they can talk to each other and work efficiently. Watch for change orders or design engineering that do not consider these data communication needs. Improper installation, rather than system compatibility, is often blamed when there is a data communication failure. 

Installation and use

Once installed and operating, legal risks can arise based on the representations of performance. Contractual targets for energy performance are everyday terms now. Glaziers must seek out these terms and negotiate them carefully. 

Often these targets are within the prime contract. Where a subcontract incorporates the prime, builders argue sub-tiers are responsible for an owner’s claim that a deliverable energy target was not met. Trades must find these building targets and work to define how their works contributed to that target in their own agreement. Items that do not fall within a scope-of-work for that trade should be disclaimed.

Equally, the performance requirements must be based on whole building performance over a set period of time. As innovation develops, glazing and building systems are providing real-time access to performance and then extrapolating that performance to near-instantaneous cost calculations. This has allowed some owners to overly focus on seasonal energy costs or one-time event expenses. Contracts that require delivery of performance-based energy savings should have the basis for that performance defined in terms of time and scope. 

Finally, as trades stretch to meet customer goals for new innovations, they are working in areas where the prospect of insurance coverage becomes unsettled. Typical claims surrounding energy or data may not be covered by commercial general liability insurance policies. Owners should talk with their insurance broker about project- or system-specific coverage when opportunities for use of an innovation arise. 

The author is a member of The Gary Law Group a Portland-based firm specializing in legal and risk issues facing manufacturers of glazing products. Write him at matt@prgarylaw.com.