This article was produced by Olswang LLP, which joined with CMS on 1 May 2017.
"The Internet of Things" is a catch-all term for the technology that connects objects to the internet and allows those objects to work together on a system. We have all got used to connected devices on our desks and in our pockets, but IoT allows those devices to interact with smart objects and appliances.
– Anthony Waller
Growing up in the 1980s, I was a regular reader of the weekly comic The Eagle. In between stories of Dan Dare chasing the evil Mekon around the galaxy, Doomlord, The Thirteenth Floor and much other fun nonsense there was often a feature called "The World of Tomorrow". The World of Tomorrow was a window into the future predicting gadgets, gizmos and ways in which our lives would change come our time to be grown-ups. Back then the world of tomorrow looked pretty promising. Disappointingly, however, I am still not commuting to work strapped to a jet-pack, nor do I live in an under-water city driving my family around in a submarine.
Over the past few years a huge amount has been written about the advent of the so called Internet of Things or "IoT" as it is commonly known as (#IoT for the Twitterati amongst you). To date however most of the commentary has looked a lot like The World of Tomorrow, more of a fun fiction than a reality. That, however, is about to change.
The connected fridge
The poster-child of IoT has for several years now been the "connected fridge". If you look it up on the internet you will find page after page of search results including analysis and commentary about this as yet unrealised dream. Stories of fridges that will automatically order your food for you when you run out and help you explore new recipes based on your tastes and preferences abound. The cynics amongst you will no doubt be raising a gentle sneer at this idea, which has become a bit of a gimmick. In some senses the focus on intelligent white goods has detracted from the true potential for the underlying technology. IoT is another revolution in the making. It will change the world we live in, the way we interact with the world around us and the way we do business together. Paradoxically, I also strongly suspect that in ten years' time very few people will talk about The Internet of Things as a stand-alone idea. IoT will have become so integral to our everyday lives that it will just be the way things work in the world.
So what is this revolutionary concept and why can I be so confident about its potential impact? "The Internet of Things" is a catch-all term for the technology that connects objects to the internet and allows those objects to work together on a system. We have all got used to connected devices on our desks and in our pockets, but IoT allows those devices to interact with smart objects and appliances. IoT is often mentioned in the same breath as "M2M" or machine to machine communication. M2M is the technology that makes IoT work, it allows the connection between devices and the network over which one machine can talk to another; it is sometimes described as the plumbing of IoT.
Looking a little further at the technical chain involved in IoT it can be broken down in to a number of layers and at each layer there are separate businesses providing services and deriving value from those services. Much of what has been written about in IoT has focussed on the objects and devices collating the data. These devices range from smart energy meters in our homes to the alluring world of 'wearable' technology such as the plethora of fitness-bands (Fuel; Jawbone etc) now available and the range of smart watches already on the market. These high-profile bespoke products are likely to be subsumed into our everyday lives in the very near future. Just as smart-meters will track your energy usage and switch off lights when they are not needed, watches will track your heart-rate and alert your doctor if there is a problem. As silicon becomes ever thinner there reason to think that any object can be connected right down to the pipes, wires and fabric that make up the world around us. IoT enthusiasts have us living in an environment where everything around us will be sending data all day, every day. Businesses are creating applications that store this ever increasing array of digital signals sent by connected objects. Those applications store and then process that data to form a value-add service to a business or a consumer and accessed by businesses and consumers using a proliferation of platforms have sprung-up across different sectors. The applications are making the world around us safer, more efficient and more relevant to us as individuals. Finally, in the background, there are the ever-important telecoms network and services businesses controlling the transmission and routing of digital signals between applications and devices and transporting those signals between devices and platforms.
Much as this might sound like science fiction, this technology is already at our fingertips and is having an impact today. Analysts expect the number of connected objects to reach around 24 billion by 2020 and Cisco recently predicted that IoT would be driving $14.4 trillion of value across all industry sectors by 2022. The potential for the industry is validated by Google's $3.2bn acquisition of NEST, the connected thermostat that learns your energy consumption patterns and adapts to your way of life. The industries most likely to see significant changes driven by IoT in the short to medium term are healthcare, automotive, logistics and energy but IoT is also already having an impact in a wider range of sectors such as agriculture, education and infrastructure. It is not a significant leap to see how it will also have an impact on the service industries, including the legal profession - where efficiency, cost savings and new business opportunities are paramount. IoT will help law firms to manage their resources in a more efficient and effective way, whether that be in the buildings we work in or the people we work with. An article I read recently, with its tongue firmly in its in cheek, envisaged a world in which lawyers will be fitted with connected bands that track daily movement, help automate the recording of time and monitor when you are dozing off in important meetings, sending you a little buzz to keep you awake! A little far-fetched perhaps, but somewhere in this rather dystopian vision there's a good idea trying to get out.
More importantly and immediately for law firms, with technological change comes both challenges and opportunities, all of which drive a need for legal services throughout the IoT ecosystem. Whether we are helping businesses to protect the intellectual property underpinning this new technology, advising on the consolidation of IoT businesses through mergers and acquisitions or supporting the commercial arrangements across the entire IoT value chain, legal services are an essential ingredient to helping this technology thrive and develop. Despite a critical study on the governance of IoT carried out by the European Commission, and high-level discussions taking place on both sides of the Atlantic on the topic, including for example at BEREC (the European regulatory body for electronic communications) and at the Federal Trade Commission in Washington DC, regulation has yet to catch up with the fast paced development of IoT. To date - other than regulatory driven numbering allocations - there is nothing legally tailor made for it. The challenge for lawyers therefore is to advise clients as to how they fit into, and take best advantage of, the existing regulatory environment of electronic communication networks and services. Creating or amending relevant and effective regulation to support this new market is rapidly rising up the political agenda.
A growing market
Much of the immediate concern however is around what this proliferation of data will mean for us all and for our security and our privacy. The mass of data created by IoT will significantly increase the locations and jurisdictions where our personal data resides. As our watches, our cars and our thermostats all start to collect and push critical data about us (our health, our location, our interests) into the ether, concerns about who, if anybody, owns that data, what it can be used for and what our rights are to retain control over it will come to the fore. Data encryption and device authentication are key, as is the challenge of providing an adequate protection against false requests for information and protection against unauthenticated commands. In the EU there is no consensus on whether the current Data Protection Framework is sufficient for IoT and M2M. What is currently at stake is the right to be invisible within the concept of "connected living" how to guarantee that the explicit consent, purpose and proportionality principles, data anonymisation and privacy by default are feasible and practical.
By delving too deeply into the legal risks around IoT however, we risk losing sight of the prize. Not all of the data made available by IoT is personal data and much of it will simply be about ensuring that the objects around us talk to each other and to the devices in our pockets and on our wrists in an intelligent way, to help us access a level of information never before possible. My jet-pack may remain a pipe-dream but I am confident that IoT will play an important part in ensuring that our 'World of Tomorrow' is a better, more efficient, safer place to live. A world, you might say, that just works.
This article first appeared in Legal IT Today issue #6. Please click here to download the original publication.
