The legal issues involved in IoT, wearable technology and 3D printing

Innovation in the form of the Internet of Things (IoT), wearable technology, and 3D printing have been hot topics in the manufacturing sector for some time, but what do developments in this space mean for the supply chain specifically - and what are the legal implications?

Internet of Things
Predicted to be the largest device market in the world by 2019, the IoT is moving into mainstream consumerism, with Internet-connected televisions, fridges, heating and home security systems, for example, already being integrated into normal aspects of daily life.

Cerys Wyn Davies, Partner at Pinsent Masons LLP international law firm.
Cerys Wyn Davies, Partner at Pinsent Masons LLP.

There are currently minimal legal regulations specifically overseeing IoT devices, although the European Commission has them firmly in its sights. For example, the European advisory body on data protection and privacy published an opinion piece on 16 September 2014 highlighting the need to address loss of privacy and other data protection risks. The piece also recommends that IoT-connected devices should be designed from the start to include suitable data privacy requirements that underpin the right of deletion/ right to be forgotten, data portability, and broader privacy and data protection principles, otherwise known as “privacy by design”. The law is playing catch-up.

Andrew Hornigold, Partner at Pinsent Masons LLP international law firm.
Andrew Hornigold, Partner at Pinsent Masons LLP.

Increasingly, the dividing lines between manufacturing and services are blurring – customer needs are increasingly being met by “servitisation” where a manufacturer bundles services along with the sale of products. This trend is accelerating as a result of technological change. Philips, for instance, are offering a service that allows organisations to rent lighting systems in buildings for a lifetime arrangement. This could prove to be a positive development, as renting means that multiple parts could be recovered and repaired – this really is “recycling 2.0”.

This innovation can create a much more personalised supply chain too – for example, HP have a product, Instant Ink, which allows your printer to sense when you’re running out of ink. At this point it will notify HP to send you the ink by post. Your lifetime contract is with HP rather than having to buy ink from a stationery shop. As companies move towards this sort of model they will need new forms of customer contracts, as well as thinking about their IT and telecoms arrangements.

Wearable technology
Google X, the search engine’s research unit, is currently working on self-driving cars, and Google Glass is now developing services using nano technology and wearables. The search giant is reported to be developing a nano monitor delivered via a pill, which will circulate in the patient’s bloodstream to aid the detection of strokes and cancer. As well as this, the company’s X Labs team has been focusing on developing other medical devices, such as smart contact lenses to measure glucose in the tears of diabetes patients and eating utensils that cancel out hand tremors from Parkinson’s or MS. These disruptive technologies, together with the demands of stratified medicines and treatments, will have a direct impact on the supply chain, and the business models of the pharmaceutical industry and other industries will need to adapt.

Another advancement in wearable technology comes from ProGlove, a wearable glove which can monitor the efficiency and training of staff working on a production line. While such a product brings clear benefits to the supply chain – tracking efficiency for example – it also raises a myriad of legal issues including privacy and other rights of the worker.

3D printing
The sector is seeing a rapid expansion of 3D printing. HP recently announced its new 3D printer with Multi Jet Fusion Technology that is said to revolutionise the 3D industry by being the fastest on the market so far.

As the sector booms we can expect to see localised supply chains – if you’re a big automobile or aerospace manufacturer you don’t need to keep spare parts in your central warehouses; instead you can get them printed locally. This, in turn, has a direct impact on the logistics sector, creating a more streamlined and cost effective supply chain.

However, there are a myriad of issues surrounding the ownership and enforcement of intellectual property rights. As 3D printing becomes more sophisticated, parts are produced and distributed at a higher rate. The ability to produce products in the public domain rather than in factories raises significant concerns with regards to the prevention of patent, design, copyright and trademark infringements – these developments make it extremely challenging to monitor and protect intellectual property rights. The demands of 3D printing may also lead to fundamental changes in business strategy, with revenue being made through the licensing of intellectual property rights rather than from the sales of products.

Innovations in IoT and 3D printing have truly disrupted businesses across the sectors – from retail through to automotive – and there are no signs of it slowing. This is a time for experimentation, and changing business models, whilst the law works hard to keep pace with this technology. Data security and data protection in particular should be top of mind for those developing their supply chains around these new technologies, as well as the safeguarding of their intellectual property rights and the rights of their workforces.