'On Software Bugs and Legal Bugs: Product Liability in the Age of Code' (Indiana Legal Studies Research Paper No. 535) by Asaf Lubin comments
Despite software’s ubiquity in modern life, its classification within product liability law remains unsettled. Is software a product, a service, a good, a component, a medium, a force, or something else altogether? Under the Restatement (Third) of Torts a product is defined as a “tangible personal property distributed commercially for use or consumption.” But has this definition been embraced by states? And how has it been applied in the Courts, since its adoption some 26 years ago?
Through a 50-state survey and the canvassing of all relevant case law, the paper reveals widespread doctrinal inconsistencies within the common law. Some states adopt restrictive definitions of “product” tied to tangibility, while others take broader approaches or leave the term undefined, creating uncertainty in software-related claims. Judicial decisions further complicate this landscape, with courts diverging on whether software qualifies as a product, particularly in cases involving embedded or cloud-based solutions like software-as-a-service.
The paper contrasts U.S. law with the 2024 European Union Product Liability Directive, which redefines software and artificial intelligence as products, establishing a forward-looking framework that imposes strict liability for software defects. This stark divergence exposes the U.S.’s failure to modernize its legal frameworks, forcing courts to rely on outdated definitions that inadequately address the risks posed by emerging technologies. By lagging behind Europe, the U.S. cedes its historic role as a pioneer in tort law, creating a regulatory vacuum that prioritizes developer interests over consumer safety and undermines global trust in its ability to regulate the digital economy effectively
