The ‘Internet of Things’ (IoT) is a term first coined by Kevin Ashton of the Massachusetts Institute of Technology. In simple terms the IoT is everyday objects informing and being informed about other objects systematically, via connection and exchange of information over the internet.

The premise is that enabled network devices can exchange information without the involvement of humans. For this reason, it is also incorporates the term machine to machine (M2M).

The uniqueness of the IoT rests largely with the inter-operation of products that previously have had no interconnection or functionality, for example, fridges, heating systems, washing machines, even clothes or furniture.

The development of the IoT is at an early stage but it is estimated by some that over 25 million devices will be online by 2020, with a view that it will change all aspects of people’s lives. Despite the IoT being in its infancy, the impact is already being noted with the increase in smart-metering and wearable technology, particularly in the field of fitness.

Regardless of whether it is an emerging technology or not, there are some legal elements which it is already clear will need to be carefully considered.

Intellectual property

Areas of technology and development, inevitably include a wide range of intellectual property rights (IPR) to be aware of. For example, parts of the technology may be protectable by patents. This is not always a straight forward consideration due to the views of different jurisdictions on what is capable of being registered as a patent, however, serious consideration has to be given to this. As well as patents there is know-how and trade secrets.

As with many markets, e.g. that of mobile phones, branding will be a key component. This will largely be met by the protection of trade marks. As the market sector increases, the design of the physical objects will also become more important, and protection for their aesthetic features will need to be considered in the context of design rights. Any other creative elements may be protected by copyright. Inevitably there will be ‘tie-ups’ in this field, those with the technology linking with significant brands, and the inevitable licensing agreements as a result.

This is not the only area where licensing could end up playing a key role. For the IoT to reach its full potential there needs to be a unified interaction between all products. Looking at established markets where this has already been addressed, e.g. the smartphone sector, a solution to this will be the use of ‘standardised technology’.

However, much of the IoT is being built on established technology and, in particular, technology companies already own many of the key patents, therefore, the use of standardised technology has to be considered in that context. Of course the technology can be licensed (regardless of the protection it has) and there may be an argument for such licenses to be made available on a fair, reasonable and non-discriminatory basis (as seen in the smartphone sector).

Data Protection

Inevitably, due to its nature, the IoT will see a significant amount of data obtained. Much of this data may be of a sensitive, personal nature.

The advent of the IoT, and the risks that it presents in respect of data protection, has been much considered and discussed over the last few years. The European Commission provided an Opinion in 2014. The underlying view is that the IoT, whilst providing significant opportunity, also has inherent risks in light of the quantity and nature of data held. This has been taken into account when the General Data Protection Regulations (which came into effect in May 2016 and will apply from 25 May 2018) were put together.

These regulations introduce significant developments in the field of data protection, and have potential for significant impact on any organisation which operates in the field of the IoT, including, but not limited to, those making the devices, application developers and social platforms.

The IoT is anticipated to impact significantly on our lives going forward and there is, without doubt, a wealth of opportunity for a variety of businesses. However, to ensure that the businesses thrive and make the most of the opportunities, businesses need to ensure:

  • that, at an early stage, innovations are properly identified and the assets that are developed are properly protected
  • embarking on any sector requires careful due diligence, carrying out searches of what is already in existence is useful (although this can sometimes incur significant fees)
  • if there is any possibility that the entity will be using someone else’s technology, all the correct licences are in place
  • data protection regulations have been taken into account and appropriate policies and methods for dealing with the data are in place.