INTERNET OF THINGS. Presented By Erin Bosman & Julie Park, Morrison & Foerster LLP ACC 14th ANNUAL GC ROUNDTABLE AND ALL DAY MCLE

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1 Friday, January 27 th, 2017 INTERNET OF THINGS Presented By Erin Bosman & Julie Park, Morrison & Foerster LLP ACC 14th ANNUAL GC ROUNDTABLE AND ALL DAY MCLE

2 This Talk s Objectives What is the Internet of Things? What s new in IoT? Smart Homes Automotive Healthcare Retail Consumer Products What role does the government play in this arena? 1

3 What Is the Internet of Things? Enabling data communication across traditionally siloed verticals Mandates common technology and standards to support sharing and manipulation of that data 2

Interoperability may make or break IoT Things

4 What Is the Internet of Things? Key Themes Things and their associated networks have a lifecycle Data is core asset from IoT: need rights to collect, share and use Interoperability may make or break IoT Things produce new risks, including privacy, security, IP and product liability 3

6 IoT by Industry Smart Homes Automotive Healthcare Retail Consumer Products 5

7 IoT by Industry: Smart Homes Number of smart home devices will grow from 83 million in 2015 to 193 million in 2020 Benefits Multi-user operation Automated functions Reduction in utility bills Energy conservation 6

8 IoT by Industry: Smart Homes Issues in the Last Year FTC v. D-Link Corp. et al. (filed Jan. 5, 2017) FTC alleges security risks in D-Link s routers and Internet-protocol (IP) cameras Highlights importance of security protocols and protections Paul v. CPS Energy (filed Nov. 7, 2016) Plaintiffs alleged smart meters exposed customers and the public to much more radio frequency radiation than they were led to believe Highlights relationship between marketing claims, disclosures, and consumer lawsuits Vulnerability of light bulbs Researchers uncovered a flaw in a wireless technology that is often included in smart home devices like lights, switches, locks, thermostats and many of the components of the smart home Potential to mitigate risk through warnings 7

9 IoT by Industry: Automotive By 2020, 1 in 5 vehicles will have some type of wireless network connection Growth driven by customer demand Source: Ford Motors 8

10 IoT by Industry: Automotive Developments in 2016 Ji Chang Son et al. v. Tesla Motors (filed Dec. 30, 2016): Class action alleges Tesla Model X has a sudden acceleration defect Autopilot In May 2016, Tesla announced the first death associated with one of its cars in Autopilot mode National Highway Traffic Safety Administration launched an official investigation of the self-driving car s Autopilot system Driverless cars First driverless fleet launched by Uber in Pittsburgh 9

11 IoT by Industry: Automotive Agency Guidance NHTSA Federal Automated Vehicles Policy (2016) NHTSA Cybersecurity Best Practices for Modern Vehicles (2016) 10

12 IoT by Industry: Healthcare IoT has offerings for patients and healthcare providers Better patient accessibility to healthcare providers Operational efficiency for healthcare providers Source: Freescale Semiconductor 11

13 IoT by Industry: Healthcare Implications for litigation Use of data from medical devices Creative litigators will use connected devices to tell a story Who controls the data? 12

insulin pump St. Jude Medical hacking-prone pacemakers (Jan.

14 IoT by Industry: Healthcare Developments in 2016 Johnson & Johnson (Oct. 2016) Publicly acknowledged a security vulnerability in its Animas OneTouch Ping insulin pump St. Jude Medical hacking-prone pacemakers (Jan. 2017) FDA found certain pacemakers, defibrillators, and other St. Jude products were vulnerable to cybersecurity exploits 13

15 IoT by Industry: Healthcare New Final FDA Guidance (Dec. 2016) Central to these recommendations is FDA s belief that medical device manufacturers should implement a structured and comprehensive program to manage cybersecurity risks Have a way to monitor and detect cybersecurity vulnerabilities in their devices Understand, assess and detect the level of risk a vulnerability poses to patient safety Establish a process for working with cybersecurity researchers and other stakeholders to receive information about potential vulnerabilities (known as a coordinated vulnerability disclosure policy ) Deploy mitigations (e.g., software patches) to address cybersecurity issues early, before they can be exploited and cause harm 14

IoT by Industry: Retail IoT is changing the way people shop Improved logistics tracking inventory and orders Automation of replacement of durable goods

16 IoT by Industry: Retail IoT is changing the way people shop Improved logistics tracking inventory and orders Automation of replacement of durable goods subscription services that replenish automatically Longer relationships between manufacturers and customers Better access to data to influence consumers Customer convenience 15

17 IoT by Industry: Retail Big investments Intel with $100 million IoT retail platform Honeywell acquired material handling automation provider for $1.5 billion to boost data collection platform By end of 2016, 60% of retail pursuing IoT initiatives 16

18 IoT by Industry: Retail Developments in 2016 Online Retailer Hackings Unknown hackers used millions of internet of things devices found in homes and offices Facilitated a massive cyber attack that disrupted access to sites such as Twitter, Amazon, Netflix, PayPal, The New York Times, CNN, and others Business was disrupted for multiple online retailers 17

19 IoT by Industry: Consumer Products Wearables/clothing Entertainment Personal items 18

20 IoT by Industry: Consumer Products Developments in 2016 FTC v. Breathometer Inc. et al. (filed Jan. 23, 2017) FTC alleges defendants marketed and sold blood-alcohol content breath detectors that connect to smartphones without notifying customers or retailers that the devices gave inaccurate readings. Vizio class actions A number of class actions nationwide allege Vizio s smart TVs track data for targeting advertising without consumer permission. Alan Rackemann v. LISNR Inc. et al. Class action alleges defendants developed smartphone app for Indianapolis Colts fans that continuously records users conversations using device s microphone, even when the app is closed and the screen is off. We-Vibe vibrator class action Class action alleges smart vibrator company made it possible to collect consumers usage information, such as how often and how long the item was used. Company has agreed to settle. 19

21 Government s Role in IoT As regulator As agenda setter As participant 20

Role of the Government: Regulator Conflicting interests Competition for resources Public policy interests Public safety and privacy concerns Example legislation Energy Policy Act of 2005 Rail Safety

22 Role of the Government: Regulator Conflicting interests Competition for resources Public policy interests Public safety and privacy concerns Example legislation Energy Policy Act of 2005 Rail Safety Improvement Act of 2008 Food Safety Modernization Act (2011) Drug Quality & Security Act (2013) FAA on Drones Registration and Marking Requirements for Small Unmanned Aircraft Interim Final Rule (2015) Final Rule for Operation and Certification of Small Unmanned Aircraft Systems (UAS) (2016) 21

23 Role of the Government: Agenda Setter Supporting public policy interests not only through regulation Funding research Issuing agency reports and recommendations Should the U.S. government take a larger role? International comparison 22

24 Role of the Government: Participant Government is a big spender Examples of government use: Military Public health Weather & environmental monitoring 23

25 QUESTIONS? Friday, January 27 th, 2017

Connected Medical Devices

Connected Medical Devices How to Reduce Risks Inherent in an Internet of Things that Can Help or Harm Laura Clark Fey, Esq., Principal, Fey LLC Agenda Overview of the Internet of Things for Healthcare