The Era of the Internet of Things: Can Product Liability Laws Keep Up?

• Author: Gorman, Leta
• Position: Prvac

1. The Internet of Things Era

   WE ARE living in an era that some refer to as the "Internet of Things" ("IoT"), where wireless connected devices know how we work, play, shop, sleep, drive, manage our homes, and medicate. IoT is a concept that represents the network of smart devices (or "things") that are connected to the Internet and to each other and have the ability to collect and exchange data on every aspect of our lives and businesses. (1) "Though there is no specific definition of IoT, the concept focuses on how computers, sensors, and objects interact with each other and collect information relating to their surroundings." (2) The connected devices operate on embedded sensors that automatically measure and transfer data (i.e., environmental and activity information) over a network to data stores without human interaction. (3) These data stores interact with analytic engines to collect and provide data that can be acted upon. (4)

   Among connected devices are devices that allow for the remote monitoring of babies and children; devices to help you to remember to take your medications; devices to track your activity levels; devices to help monitor an aging family member; medical devices that allow your health to be monitored by your doctor and that automatically release proper levels of medication; devices that allow you to remotely monitor your home; devices that allow you to turn off appliances or change the temperature in your home; devices that allow you to feed and water your plants and pets; and refrigerators that remind you when you are out of eggs. There are smart TVs and toys. There are devices that allow cities and governments to monitor trash pick-up, traffic flows, pollution levels, electricity usage, and the structural soundness of buildings and roads. There are devices that allow companies to monitor the repair and maintenance needs of equipment and track real time marketing trends in stores. This list of IoT devices is in no way complete, and it grows longer every day.

   In 2009, the number of IoT devices surpassed the number of people, (5) yet, the development and use of connected devices is really just in its infancy. By 2020, it is estimated that there could be 50 billion connected devices. (6) By way of example, only 10% of consumer cars were connected to the Internet in 2009, but in 2020, 90% of consumer cars will be connected. (7) "All of these connected machines mean much more data will be generated: globally, by 2018, mobile data traffic will exceed fifteen exabytes--about 15 quintillion bytes--each month. By comparison, according to one estimate, an exabyte of storage could contain 50,000 years' worth of DVD-quality video." (8)

   Certainly, IoT devices can provide many benefits to consumers--convenience, home safety, medical monitoring, and reduced energy waste are a few examples. These benefits help explain IoT's rapid growth. But, these devices create both security and privacy risks. IoT devices can be hacked and controlled by third-parties. For example, imagine if the software system for the electronic thermostat in your home is hacked and turned off. Your home is damaged as a result of frozen pipes and/or water damage. Or, imagine if your home security system is hacked and disconnected. Your home is then vandalized and robbed. (9) Or, what if your doctor's medical monitoring equipment software is hacked? Your medical device doesn't release the medicine you need to survive. Or, what if your implanted defibrillator has been reprogrammed by an unauthorized user?

   There are also privacy risks related to IoT devices. The devices collect, transmit, and store consumer data, some of which is highly personal. If they are hacked, your private personal information could be shared, sold, and used. Private conversations could be exposed. Your private life is now no longer private.

   Beyond these security and privacy risks, a device may also simply malfunction. A remotely operated device might fail and cause property damage such as fire or water damage. A home security device might leave doors or windows open, allowing intrusions or burglaries. Or, a medical device may fail to provide crucial medication to a patient or information to a doctor, causing serious injury or even death.

2. Can Product Liability Law Keep Up in the IoT Era?

   If an IoT device is hacked and/or malfunctions, there will be new challenges with regard to product liability law. Traditional notions of product liability law provide that a product manufacturer, component part supplier, or seller (and others who make products available to the public) are to be held liable if they put a defective product into a consumer's hands and the defect causes personal injury or property damage. A consumer can sometimes be liable for mishandling or misusing a product as well. Product liability claims are based on...