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Could your clothing one day tell you when it needs washing? Could grocery stores check the freshness of a produce order when the ship carrying it is still at sea?
The Internet of Things creates all sorts of previously unimagined scenarios for retailers and suppliers. It also creates a whole new world of legal challenges for the attorneys who serve those companies.
On Monday, March 20th, Womble Carlyle’s Ted Claypoole and Bond Dickinson’s Malcolm Dowden presented “An Introduction to the Internet of Things” as part of the two firms’ joint recognition of International Innovation Week.
The “Internet of Things” involves connecting everyday physical objects to the Web. For example, shipping containers can be equipped with devices that constantly broadcast location, temperature & atmospheric conditions. Also, Claypoole said the municipal trash cans in Charlotte, N.C. are sensor-equipped to let maintenance workers know when they are full. This approach has cut sanitation labor needs by one-third.
Dowden said the impact of innovations on commercial practice “all comes down to the contracts that make commercial relationships work.”
The Internet of Things (IoT) will revolutionize supply chain management, he said. Buyers will benefit from “just in time” procurement. It also could greatly change how procurement contracts are structured. Currently, buyers lock in a long-term price in exchange for flexibility.
Dowden said, “You lose the possibility of benefitting from shifts in the market.”
But through IoT technology, buyers may start shopping from multiple vendors, depending on who can offer the best price that day. Dowden said this turns supply chain agreements to “one-hit contracts” rather than long-term relationships. It also raises the legal question, “Can contract forms be adjusted in real time?” Certainly, the IoT will create the need for far more responsive contract management, Dowden said.
Claypoole also noted that IoT devices can be hacked and the information they gather can be abused. What happens if a self-driving car is hacked on the road, for example? This raises significant privacy and data security concerns for companies.
“There are a lot of business issues we haven’t considered yet,” Claypoole said.
Innovation Week continues Tuesday with a presentation on “Artificial Intelligence in Legal Research Innovation” by ROSS Intelligence CEO Andrew Arruda.
Click here to learn more about Innovation Week at Womble Carlyle and Bond Dickinson. And follow all the developments on Twitter at @Bond_Dickinson and @WCSRTweet using #InnovationWeek.