Can a faulty new equipment be repaired and sold as new?

[Saturn88]

I am having a really hard time finding any regs regarding selling out-of box-failed equipment as new. Everything talks about "refurbished" or "remanufactured", and that the company must disposition these items based on risk, but what about a device that was never technically "used"?
We ship a device to a customer, they open it, it doesn't work, and they ship it back. Can this item be sold as new after repair? Please point me to the proper US, EU, or Canadian regulations regarding this.
Thank you!

 

[MIREGMGR]

This question is not addressed in medical device regulatory systems, to my knowledge.

One might think it would be addressed in the Uniform Commercial Code, but it's not there either, as far as I can tell.

I think this is a matter of traditional practice and (in USA) state laws. That accounts for the variability in practice.

Most of the participants here are regulatory and quality practitioners. Your question pertains to commercial law.

 

[Bev D]

In my experience in the US it is a matter of case law.
the line that every lawyer in 4 different industries that I've worked in is at the point where the product moves from the company warehouse to the shipping truck for delivery to a customer (distributors are included as customers). this is because the line needs to be drawn somewhere and at the point it leaves your control you can no longer be certain what happened to the product.

 

[Randy]

I am having a really hard time finding any regs regarding selling out-of box-failed equipment as new. Everything talks about "refurbished" or "remanufactured", and that the company must disposition these items based on risk, but what about a device that was never technically "used"?
We ship a device to a customer, they open it, it doesn't work, and they ship it back. Can this item be sold as new after repair? Please point me to the proper US, EU, or Canadian regulations regarding this.
Thank you!

Can it be sold as new? Absolutely, Yes, Positively, Of course

The proper question should be..."Is it legal to sell as new?" And the answer totally depends on where you are in the world and where in the world you plan to sell it.

 

[Ronen E]

I am having a really hard time finding any regs regarding selling out-of box-failed equipment as new. Everything talks about "refurbished" or "remanufactured", and that the company must disposition these items based on risk, but what about a device that was never technically "used"?
We ship a device to a customer, they open it, it doesn't work, and they ship it back. Can this item be sold as new after repair? Please point me to the proper US, EU, or Canadian regulations regarding this.
Thank you!

Hello and welcome to the Cove

Remanufacturing and refurbishing is handled differently in the USA and in the EC. I've never studied that aspect under the Canadian system.

For the EC regulations, research the Europa/Enterprise website. Warning: The legislation and guidance are extensive.

In the USA, the actual term for Medical Devices repair is "Reconditioning". To the best of my knowledge, this whole subject is intentionally left out of FDA regulation for a long, long time now. Instead, it is governed by voluntary agreements subscribed to by industry. As far as I understand, it makes no difference whether the device has been in use or not, before the repair; as suggested above, the only thing that matters is that it left the control of the Manufacturer.

Cheers,
Ronen.

 

[Saturn88]

Thank you all for your responses.

Found this from FDA for "reconditioning":

Reconditioning means the reworking, relabeling, segregation, or other manipulation which brings a product into compliance with the law, whether or not for its original intended use.
(I have a source, but Forum won't let me post links)

So if we relabel the device as "reconditioned", then it should have a separate price point?

Also found this from MDD:

4.2 A device is not fully refurbished and subsequently placed on the market if either of the criteria at 4.1 is not met. Examples of where at least one of the two criteria is not met include:
- normal repair/maintenance activities (performed by either the original manufacturer/distributor or a third party, including the replacement of original components/sub-assemblies with new or reclaimed spare parts, either from the original manufacturer or another source);
- repair/replacement schemes, in which the user receives a serviced or repaired device which is not necessarily his original device;
- new items repaired before sale or supply (for instance to repair transit damage, in accordance with the manufacturer's instructions);

I dunno. It sounds like we can do what we want as long as we have clear criteria and risk assessment to justify our decisions.

I am not familiar with case law at all. Looks like I need to hit the interwebs again!

 

[Marc]

Thanks for posting what you found out.

<snip> (I have a source, but Forum won't let me post links) <snip>

Until a person has 10 posts they can't post links. This is to keep spammers at bay. We do heavily monitor posts here so if if you want to put in a link, just do something like this using spaces: http:// www . website . com - A moderator or I will see it and make it a live link.

 

[Bev D]

can you post what 4.1 from MDD says?
most of the conditions listed in 4.2 are those that case law precludes you form selling a product as new.
you can sell a product that is reconditioned or refurbished as long as it is clearly labeled/advertised as such. (ever been to Big Lots? many of their vacuum cleaners and other electrical household appliances are refurbished...and they aren't sell human medical devices). Nothing precludes you from selling refurbished product at the same price - or higher - as your truly new product. (except your Customers of course)

As my corporate lawyer says: you can do anything you want - until you get caught.

 

[Ronen E]

Thank you all for your responses.

Found this from FDA for "reconditioning":

Reconditioning means the reworking, relabeling, segregation, or other manipulation which brings a product into compliance with the law, whether or not for its original intended use.
(I have a source, but Forum won't let me post links)

So if we relabel the device as "reconditioned", then it should have a separate price point?

Also found this from MDD:

4.2 A device is not fully refurbished and subsequently placed on the market if either of the criteria at 4.1 is not met. Examples of where at least one of the two criteria is not met include:
- normal repair/maintenance activities (performed by either the original manufacturer/distributor or a third party, including the replacement of original components/sub-assemblies with new or reclaimed spare parts, either from the original manufacturer or another source);
- repair/replacement schemes, in which the user receives a serviced or repaired device which is not necessarily his original device;
- new items repaired before sale or supply (for instance to repair transit damage, in accordance with the manufacturer's instructions);

I dunno. It sounds like we can do what we want as long as we have clear criteria and risk assessment to justify our decisions.

I am not familiar with case law at all. Looks like I need to hit the interwebs again!

Hi,

Here's the link.

I'm afraid that this content might be misleading. It defines Reconditioning in the context of Sections 304 and 801 of the FD&C Act, which deal with reconditioning or destruction of goods under domestic seizure or import detention.

There's a lot of online content on Reconditioning of medical devices as in repair and resale, and a lot of it is not published by the FDA. Go and have fun!

WRT the MDD -
The clause you highlighted includes "before sale or supply". There is extensive guidance on what constitutes "Sale" and "Supply" in the EC (not necessarily in the specific Medical Devices context). This is especially significant in borderline cases.

Cheers,
Ronen.

Added in edit:
I knew something was wrong. The above quote is not from the MDD, if MDD stood for Medical Device Directive (of the EC). It is most likely from Recommendation NB-MED/2.1/Rec5, an official guidance of the Notified Bodies Coordination body (not of the EC itself).

Clause 4.1 of the same reads:

4.1 The following criteria if fulfilled in combination, indicate that a device is „fully refurbished“ and placed on the market:
(a) the device is “fully refurbished“. This typically involves:
- stripping into component parts or sub-assemblies;
- checking their suitability for reuse;
- replacement of components/sub-assemblies not suitable for reuse;
- assembly of the reclaimed and/or replacement components/subassemblies;
- testing of the assembled device against either original or revised release criteria;
- the identification of the „fully refurbished“ device by appropriate means;
(b) the „fully refurbished“ device is placed on the market* under the name of the person responsible for the full refurbishment, without changing the intended use.

Note: If the intended use is changed, then the device necessarily becomes a new device, subject to the provisions of the MDD or IVDD.

*) „Placing on the market“ is defined in the Directive [the MDD]. Additional guidance is given in Guide to the
implementation of Directives based on new approach and global approach ["the Blue Guide"].

 

[Ronen E]

can you post what 4.1 from MDD says?
most of the conditions listed in 4.2 are those that case law precludes you form selling a product as new.
you can sell a product that is reconditioned or refurbished as long as it is clearly labeled/advertised as such. (ever been to Big Lots? many of their vacuum cleaners and other electrical household appliances are refurbished...and they aren't sell human medical devices). Nothing precludes you from selling refurbished product at the same price - or higher - as your truly new product. (except your Customers of course)

As my corporate lawyer says: you can do anything you want - until you get caught.

I assume this all relates to the USA...?

In this specific instance I believe it is necessary to separate the discussion between the USA and the EC, because their legal systems handle this topic so differently.

Cheers,
Ronen.