IoT Lawyer:
Legal Advice for Internet of Things

What is the Internet of Things (IoT)?

The Internet of Things (IoT) is a catch-all term for the ongoing digitisation and networking of products and services. In short, IoT describes the automated exchange of information between physical and virtual things. The basic principle is the transfer of data between many different systems using network technologies.

The intelligent, networked devices can perform more and more tasks automatically for their users and provide information to other devices. The essential basis for this is communication between the devices, known as machine-to-machine communication.

What are the use cases for IoT?

IoT technologies offer numerous application opportunities for companies in a wide range of industries, from industrial to healthcare, to increase efficiency, reduce costs and develop innovative business models. Common application areas include:

• Autonomous Driving and Connected Cars
• Process automation
• Quality control and management; e.g. traffic management, supply chain management, energy management
• Energy monitoring and optimisation (smart grids)
• Smart home and consumer applications
• Wearables and connected health devices in healthcare.

What are the legal challenges for businesses in the IoT sector?

• Data protection law: The Internet of Things is by definition data-driven and requires data, as the very purpose of the devices is to collect data. Depending on the application, the devices are capable of processing a large amount of personal and highly sensitive data (e.g. health data). GDPR compliance therefore plays an important role in the implementation.
• Licensing: IoT requires strong networking and standardised protocols, which is why open source components are often used. However, as their use is often subject to licensing conditions, breaches can result in a ban on their use, so legal requirements must be considered at an early stage.
• Contract law: Complex contractual issues arise in the IoT space, either through standardised framework agreements and licence terms or through automated contracts via software agents. Even in the case of autonomous contracts, it is unclear who counts as a contracting party and how general terms and conditions are accepted in the absence of negotiations.
• Liability issues: IoT products and services can ideally be divided into hardware (1), its embedded software (2), outsourced digital content (e.g. a control app on a smartphone) (3) and server-based digital content and services (4). Each of these four components raises liability issues: Systems software needs to be kept up to date through updates - who is liable for errors or delayed delivery of security-critical updates?