MAY 2019 | AROUND THE ABA

Internet connectivity presents challenges, opportunities for lawyers

Whether it is a remotely controlled drone that delivers packages to your home, an air taxi service that will fly you over rush-hour traffic, smart meters that transmit information via the internet or autonomous farming equipment controlled through a tablet, the Internet of Things is a growing development for lawyers, businesses and policymakers, according to experts on the recently held webinar, “The Internet of Things: Everything Will be Connected.”

“It’s a game changer,” said Ruth Hill Bro, co-chair of the ABA Cybersecurity Legal Task Force.

“It’s one of the most transformative and fast-paced technology developments in recent years,” Bro added. “Literally billions of vehicles, buildings, process-controlled devices, wearables, medical devices, drones, consumer or business products, mobile phones, tablets and other smart objects including smart buildings are wirelessly connecting to and communicating with each other and raising unprecedented legal liability issues.”

Bro said that since the Internet of Things (IoT) was identified as a new legal practice area in 2016, lawyers have had to contend with the “escalating legal risk of doing business in a connected world.”

She added that IoT affects, “all lawyers,” as well as “all of us as consumers.”

Stephen Wu, shareholder at the Silicon Valley Law Group in San Jose, Calif., said IoT moves beyond computers and mobile devices to smart machines that are connected in various ways.

“The machines will be talking to each other,” he said.

Wu said the industry has created some new economies of scale with new businesses and new products and services.

“You can think of the connectivity and the processing power of the Internet of Things as being the new electricity, the way we electrified the world by adding telephone lines and connecting devices to allow the use of electricity and having an ecosystem from generation to use. Now we’re going to have the same kind of thing with processing power and communications all around us,” Wu added.

Automation will reach all major sectors, including: environmental monitoring, energy management, infrastructure management, medical and health care systems, transportation management, home and building automation, manufacturing management and large-scale development, he said.

Wu said the growth curve on the number of connected devices is going up “exponentially,” and cited these statistics:

Number of connected devices

  • 1992: 1 million
  • 2009: 4 billion
  • 2018: 34.8 billion
  • 2030: 125 billion

According to Wu, the market for connected products has increased as well. In 2017, there was $235 billion in revenue, and $1 trillion is projected for 2022. Wu said the mobile phone industry is a half a trillion-dollar business right now. “This shows you the scale,” he said.

Wu said the profound technology changes will lead to challenging legal issues in the future.

Thomas J. Smedinghoff, of counsel at Locke Lorde LLP in Chicago, said cybersecurity regulation will increase this year, and that although updates are generally pushed out automatically on everything from phones to cars, security threats continue to loom.

“We don’t know if the change is introducing new problems, or whether the code is malicious or a good thing,” Smedinghoff said. However, he said increasingly we need to rely on devices for important operations, such as a heart monitor. “We really do not know everything about them, such as devices being controlled remotely or reacting differently under certain conditions.”

Consumers, Smedinghoff said, need to feel comfortable with the security, programming and ecosystem of the device to trust it. From a manufacturer viewpoint, security is often not a priority, but regulations continue to emerge, he added.

At the 4th Internet of Things National Institute in Washington, D.C., held in March, keynote speaker Michael Chertoff, former secretary of the Department of Homeland Security, challenged lawyers to “think through” and address the new legal problems posed by technology.”

“Oftentimes, we try to fit new technologies in the old models and we discover that the old model doesn’t really address the important issues, so we have to rethink them,” Chertoff told attendees at the event that was sponsored by the ABA Section of Science & Technology Law.

Chertoff mentioned several new technologies that hold promise, ranging from health sensors that alert doctors to medical problems to “smart” devices that can reduce traffic congestion in cities. But he warned that increased connectivity creates risks “to individuals and risks to society.”

Vulnerabilities are caused by gaps in software development, configuration and failures to update and upgrade devices, he said. Chertoff believes that unless technological risks are addressed, they could ultimately threaten privacy and freedom.

Chertoff encouraged lawyers to take the lead in establishing the rules and laws around technology “before you’re in crisis.”

He added, “This is the time to think about what is a reasonable set of principles to govern liability before we have a catastrophe.”

Chertoff is co-founder and executive chairman of the Chertoff Group, which provides high-level strategic counsel to corporate and government leaders on security topics ranging from risk identification and prevention to preparedness, response and recovery.

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