INDIANAPOLIS--Small businesses and entrepreneurial toy makers may face tough times or extinction when planned revisions to the Consumer Products Improvement Act take effect, according to Phil Fowler, an attorney with the Indianapolis law firm Bingham McHale.

Designed to quell concerns of U.S. parents after recent toy safety issues, the new requirements are part of the Consumer Product Safety Improvement Act (CPSIA) of 2008, which added certification and testing requirements for all products subject to federal standards or bans.

The law, championed by the U.S. Consumer Product Safety Commission (CPSC), requires certain testing and certification requirements for manufacturers, vendors and importers of regulated products intended for children 12 years old and younger. Among other things, the CPSIA bans lead and phthalates used to soften plastic in toys, mandates third-party testing and certification for all toys and requires toy makers to permanently label each toy with a batch production run number.

Although larger manufacturers will incur expenses associated with the change, the new requirements will have a big impact on small business owners, according to Fowler.

“Many home-based and small businesses are concerned about complying with the new law,” Fowler said. “They have until February 2010 to get testing done and make sure their products are safe, but they need to be proactive and get legal counsel now.”

The law, designed to protect the United States’ most vulnerable consumers, has the potential to permanently change the nation’s diverse retail market.

“Ultimately, unless the law is modified, many handmade children’s products will basically be illegal in the United States,” Fowler said. “Many of the products sold online or at craft fairs will be vulnerable to lawsuits, and lots of small business owners won’t be willing to take the risk of continuing sales if they can’t afford to pay the high testing costs.”

Also impacted by the law are secondhand stores and consumers who resell new and used children’s products online through Web sites like eBay and Craigslist. Although they aren't obliged to test the items they sell, they can be subject to liability if any of their products are recalled or found to be non-compliant.

“Business owners need to understand that they bear the responsibility of compliance,” Fowler added. “There’s not a ‘one-size-fits-all’ solution. Getting legal counsel on the front end of this process will not only reduce the risk of civil and criminal lawsuits, it will save the business money in the long run.”

Bingham McHale, a multidisciplinary business law firm serving regional, national and international clients, is the fourth largest law firm in Indiana, with offices in Indianapolis, Jasper and Vincennes. It ranked first among large law firms on the Indiana Chamber of Commerce list of 2008 Best Places to Work in Indiana.