From wearable technologies, to drones, to driverless cars, the Internet of Things, commonly known as IoT or “the Internet of Everything,” is everywhere. And it is growing exponentially.
What is IoT?
IoT applications connect us. Typical IoT applications consist of a network of physical devices that are embedded with software, sensors, and/or network connectivity. The embedded sensors and software allow devices to communicate by collecting, sharing, and aggregating data. For example, the popular Fitbit fitness tracker and other health wearables measure and collect the number of steps you take, your heart rate, the length of time you sleep, the amount of time per day you meditate, and more. Based on this data, the device will send you reminders to get up and get moving. The device also sends your data into a Fitbit account so that you can track trends and make adjustments to live a healthier lifestyle. You can share this data with your connections through the Fitbit platform. Fitbit aggregates your data with that of others to track trends, among other things.
IoT is also being used to create efficiencies in manufacturing. IoT applications allow machines to communicate, automate, and improve manufacturing processes. Similarly, IoT applications allow companies to not only supply products, but also to provide related services which optimize the products. For example, grocery stores have long used sprinkler systems to keep their produce fresh. Today, stores can purchase smart systems that will automatically sense when water should be turned on and off, and can aggregate usage data to maximize usage and save resources.
The benefits and convenience of IoT applications are undeniable. The potential use of IoT applications across industries is astounding. That is no doubt why the IoT market is rapidly growing and companies are investing millions of dollars in IoT technology. IBM recently invested $200 million to foster IoT collaboration. According to some reports, there will be more than 50 billion connected devices by 2020. Others believe that number will be much higher. SAP estimates that by 2020, the number of connected things sending and receiving data will be more than we can possibly even predict. Eric Schmidt, Google chairman, predicts that in the future there will be so many devices and sensors interacting with individuals on a regular basis, “the internet will disappear.”
But what happens to all of the data that is collected? Where is it stored? Who owns it? What happens if these applications or devices are hacked or otherwise compromised? What are the risks and how do those risks weigh against the rewards of convenience, connectedness, and innovation? What legal implications are involved? These are all issues companies should consider when developing or implementing IoT applications.
What are the risks of using IoT?
The number one risk with IoT is security. As we saw in late October with the massive distributed denial of service attacks against a major domain name system (DNS), Dyn, the security of IoT applications is of critical concern. During that attack, numerous internet-connected devices were hijacked, allowing hackers to create significant Internet outages. Twitter, Amazon, Netflix, PayPal, Reddit, Spotify, and many other websites and services were rendered inaccessible due to targeted malware that hackers sent through the IoT devices and networks.
Security analysts predict that this type of problem will only continue to escalate and will continue to cause major security risks. Although the Dyn attack appeared to be designed to create outages, similar attacks could be used to steal valuable data or intellectual property, compromise the connected devices, or penetrate networks that would otherwise be difficult for hackers to enter. Even more concerning, attacks could constitute cyber terrorism and could pose a threat to personal and public safety.
(Continued)
What legal issues should be considered?
In addition to security issues, there are many other issues that arise when dealing with IoT applications. For example, there are intellectual property and data ownership issues that should be clarified among the parties involved. The applicable privacy laws and regulatory environment is constantly evolving and may differ among IoT applications depending on the type of IoT application involved, the nature of the information being collected, and the geographic locations from which data is being collected.
In addition, IoT applications often include many different players. It is important to ensure that the agreements between application designers, platform hosts, product manufacturers, and cloud storage providers account for ownership issues, safety concerns, and other legal risks involved.
In summary, when developing or implementing an IoT application, it is critical that security is reviewed from the outset. Legal counsel should be consulted to determine on what other legal risks, issues, and regulatory implications may be involved. The IoT future is bright, but it will take careful planning to implement it correctly and safely.
Mindi Giftos is the office managing partner of Husch Blackwell’s Madison office. She practices in the areas of intellectual property and technology law, and co-leads Husch Blackwell’s Data Privacy, Security & Breach Response team. She can be reached at mindi.giftos@huschblackwell.com.
Click here to sign up for the free IB ezine – your twice-weekly resource for local business news, analysis, voices, and the names you need to know. If you are not already a subscriber to In Business magazine, be sure to sign up for our monthly print edition here.
