By Maki Iatridis, © 2007
(Mr. Iatridis, a partner at the law firm of Berg, Hill, Greenleaf & Ruscitti, LLP, advises businesses on environmental, health and safety issues.)
Nanotechnology's small size makes it a big deal for our economy, including real estate. Nanotechnology is common in our everyday lives, although most of us don't know it. Cars, cosmetics, sports equipment, clothes, furniture, fuel, sunscreen, pharmaceuticals, and other everyday products contain nanomaterials. With Boulder County hosting one-third of Colorado's nanotechnology companies, the new technology poses new challenges and issues for the business community. Addressing nanotechnology issues in real estate transactions requires new ways of thinking about traditional issues of liability, contracts, measuring chemical substances, risk management, and due diligence for transactions.
Let's start with the basics. What is nanotechnology? Nanotechnology is the science of intentionally manipulating extremely small particles between 1 and 100 nanometers. How small is this? Very, very small. You can stretch 75,000 nanoparticles side by side within the width of one human hair. A virus is 7 nanometers wide. One nanometer is narrower than the width of a DNA strand.
So what's the big deal about being small? At nanoscale sizes, the physical, biological, and chemical properties of materials behave very differently than similar conventional-sized materials. Nanomaterials can perform novel and unique functions due to their unique properties. Gravity does not affect these materials in the same way. The surface area of nanomaterials is enormous in proportion to conventional-sized materials. These unique properties enable nanomaterials to perform new functions.
What can nanomaterials do that areso unique? Nanotechnology improves fuel efficiency, drinking water treatment, sensors to detect weapons, electronic devices, and many other functions. Other examples are health companies trying to use nanotechnology to cure cancer by 2015 through nanotechnology that will seek out cancer cells, enter the cells, and deliver a deadly dose of chemotherapy medicine that leaves healthy cells untouched. Researchers project that nanotechnology will be a $1 trillion market in 2015. A CU study estimates that nano companies in Colorado already contribute $14.2 million annually in R&D expenditures in many vital industry sectors: electronics, aerospace, homeland security, biomedical, defense, and energy. Lux Research Inc. recently projected that the nanotechnology sector will grow 74% by 2008.
One of the important issues for nanotechnology is the environmental, health and safety risks. In general, these risks are believed by many to be unknown and hotly debated in some circles. Because these nanoscale materials behave so differently than their conventional-sized counterparts, there are not many studies proving what their risks are. Moreover, the existing regulatory programs for environmental, health and safety were not necessarily designed to cover nanoscale materials, leaving uncertainty as to whether these materials are regulated and, if so, how they are to be regulated. Another problem is that the instruments of measurement typically used in the environmental, health and safety industry are not able to detect nanoscale materials. Very sophisticated equipment is needed, but is not readily available.
While research learns more about the health risks, which can take many years to perform, the nanotechnology economy marches on, leaving businesses to provide traditional services for novel materials. How does one protect employees, workers, or adjacent tenants when the health risks are not known and you cannot readily detect the materials? Businesses must find ways to perform environmental due diligence with respect to real property where nanomaterials existed. How are nanomaterials to be measured when the traditional instruments cannot see them? How do you know what is there? Will nanomaterials create liability risk and how do you allocate the risk in a contract? Will a standard "comply with all laws" provision in a contract cover nanomaterials if the laws do not regulate nanomaterials in the same way that other conventional-sized chemical substances are regulated? These are but a few challenges the business community faces with nanotechnology. As usual, those with knowledge and creativity to adapt to changing business conditions will fare better than those who don't. Although small, nanotechnology is a big deal.
