Because Technology Has Its Rights Too!

Jonathan Hudis, Partner, Quarles &Brady LLP
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Jonathan Hudis, Partner, Quarles &Brady LLP

Jonathan Hudis, Partner, Quarles &Brady LLP

The Internet of Things (IoT) is becoming the next big technology wave as a means by which devices of any type can communicate with one another. There are literally tons of data sets that come with IoT technology. The problem is that not everyone considers the ramifications of intellectual property as applied to IoT—that is, patents, trademarks, copyrights, and trade secrets. When we consider technology and the devices connected to IoT, there is the ever-constant potential for running afoul of utility or design patents, trademarks, copyrighted works, or sometimes even trade secrets of another company.

The areas of IoT enterprise are evolving so fast that developers are too involved in the engineering aspects that they ignore the intellectual property side of the technology. Developers may not even stop to consider the intellectual property issues arising from IoT unless they are advised by skilled intellectual property counsel. It therefore is vital to retain knowledgeable technology counsel skilled in the areas of intellectual property to advise IoT developers while their technology is being created and implemented.

When the IoT technology of a third party is going to be used, appropriate agreements need to be in place. Such agreements come in the form of intellectual property licenses or warranties and indemnifications that the IoT device obtained from a vendor does not violate the patents, trademarks, copyrights or trade secrets of other companies. In the scenario where an unexpected intellectual property violation may be found, it is wise to take precautionary measures, such as procuring intellectual property liability insurance.

 When we consider technology and the devices connected to IoT, there is the ever-constant potential for running afoul of utility or design patents, trademarks, copyrighted works, or sometimes even trade secrets of another company 

Since the days that the reach of connectivity to the Internet extended from the hard wire to wireless, companies far and wide have explored various facets of IoT technology—from wearables, to in-home and consumer gadgets, to industrial monitoring and data aggregation apparatus. Some of these companies are dealing with IoT technology for the first time, and some for several years.

A relatively recent court case demonstrates the potential collision between IoT technology and trade secret rights. In Allied Portables LLC v. Youmans (M.D. Fla. 2015), information claimed as trade secrets was taken and let out to competitors prying eyes via IoT technology. The plaintiff was unable to obtain a preliminary injunction, because the alleged confidential information was stale and the nature of its business had since changed. Even though the plaintiff lost, this case brings to mind that ongoing data aggregation by the use of IoT technology can result in the real-time loss of trade secrets. A company with valuable proprietary information should protect itself, either by contract or in the way the underlying software and communication technologies are designed and operated, such that trade secrets are not unintentionally divulged.

Open source is a whole different area when it comes to IoT technology involving embedded software. Open source licenses come in multiple varieties, some of which are permissive, with little or no restrictions on the use, modification or redistribution of the software, other than requiring original author attribution (for example, the Apache license). Then, there are less restrictive open source licenses where any use of the software requires attribution and any redistributed modification requires making the modified source code available to third parties unless the new code simply links back to the original source code (for example, the Mozilla license). Finally, restrictive open source licenses require original author attribution and any redistribution requires making the source code available to third parties under the same open source terms as the original code (for example, the GPL license).

Impact of Big data on Intellectual Property

Over IoT connectivity technology corridors, a tremendous volume of data is exchanged, aggregated, sorted and analyzed—ranging from proprietary business data to sensitive personal data, such as medical information. Big data has, and will continue to have, a massive impact on the privacy and cybersecurity concerns of businesses and the general public. Loss of this information, or intellectual property rights, can be a threat. To protect these rights of all sorts, it is important to keep one’s guard up concerning intellectual property or the misuse of trade secrets or personally private information.

Jonathan Hudis is a partner with Intellectual Property Group of Quarles & Brady LLP out of the firm’s Washington, D.C. offices.

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