MENLO PARK - Embedded technology that collects and shares information from all kinds of everyday items may be improving quality of life, but the accompanying liability risks have legal experts predicting that the Internet of Things (IoT) will be the next litigation target for the plaintiffs' bar.

With policy making and the courts lagging behind a rapidly evolving industry, should the direction of cyber-related regulation be driven by financially incentivized lawyers?

A corporate defense attorney involved in tech-related complex litigation and regulatory proceedings believes that as "incredibly complex" layers of technology develop, "litigation is not a great way to improve security."

Megan Brown, partner at Wiley Rein in Washington, said litigation and the threat of it will chill the cooperation needed for security solutions among emerging technology innovators.

Brown was among panelists at an “Emerging Technologies and Torts of the Future” conference Wednesday, hosted by the U.S. Chamber Institute for Legal Reform in Silicon Valley.

She said the tort system is supposed to fix things, but right now it's being used for punishment and compensation for those bringing suit, effects that can stifle innovators.

"You don't want the litigation system to get too far out ahead," she said.

Even the fear of litigation can prevent companies or innovators from collaborating if they think their communications are discoverable and not privileged, she said.

Brown hopes policy makers will ensure that information sharing is encouraged and not "chilled" through fear of down-the-road vulnerabilities.

"Engineers, the smart people, shouldn’t be thinking about the downstream consequences," she said.

She also pointed out that varying evidence standards among state court systems needs to be addressed, suggesting that states not using Daubert - a standard requiring scientifically valid evidence - would produce inconsistent outcomes.

She questioned whether juries of lay people are capable of deciding complex matters, and whether court-appointed special masters with particular knowledge should be brought in to help manage complex litigation.

While panelists seemed to agree that a growing gap exists between what is actually happening in the industry and what state and federal courts understand about those developments, when the question was posed as to whether a federal department of technology should be created to help map things out, Brown was quick to respond that she is "not in favor of creating any new government."

She encouraged the Chamber and its technology engagement center (CTEC) to work with lawmakers to develop good policy.

Internet of Things

According to a report prepared by the ILR for the conference, an estimated 8.4 billion connected items will be in use this year. When that number jumps to an estimated 34 to 50 billion by 2020, only about one third of those items will be traditional smartphones and tablets, with the remainder being other "things."

"Homeowners may use an app on their phone to set the thermostat and turn the lights on and off," the report states. "Refrigerators may track and re-order food. Businesses may monitor the flow of products and restock shelves. Cities may embed sensors in roadways to make real-time adjustments to traffic signal timing to fit traffic conditions, while farmers could optimize irrigation schedules by placing sensors in the soil.

"Even people may be fitted with sensors that allow doctors or caregivers to remotely track a person's health, alert them to a medical emergency, or access data collected by a medical device."

The Internet of Things already reaches into many aspects of everyday living, connecting homes, cars and mobile devices.

Another place being transformed by embedded technology is within America's favorite past time – football.

Last season, for the first time, sensors were applied to NFL players' helmets to capture player data and convert it into real-time, usable statistics.

Panelist Jim Kaput, senior vice president and general counsel for the company that created helmet sensors for the NFL, Zebra Technologies, said his firm is a world leader for sensors, scanners and other "interesting" products.

"Every NFL player, they are tracked every moment of game," he said. "They are used by coaches after games to see who was playing, how well they were playing."

While his firm embarked on cyber security program a couple of years ago, he said Zebra continues to worry about insurance, product liability and negligence claims and indemnity.

Panel moderator John Doherty, president of Civil Justice Association of California, said there is a "huge role" for CTEC to get involved to help educate and guide policy decisions "otherwise things go haywire quickly."

Tech renaissance

Michael Steep, senior vice president of global business operations at PARC, a Xerox company that provides research and development, said we are living in a tech renaissance unlike anything before and involving many different areas – including consumer behavior and predictive analysis.

He said predictive analytics is becoming so good that at some point in the next few years, it will be 80-90 percent reliable.

While it can be applied to virtually any situation, Steep pointed to better healthcare outcomes with its use - keeping people on diets and ensuring chronically ill people stay on medicine regimens, for example.

For dieters prone to straying, predictive analytics could offer guides on how to mix up routines to stay on course through an understanding of where and when an individual's motivation breaks down.

In addition to health benefits for patients, pharmaceuticals might be able prevent lost revenue if they understood and could intervene when people stop taking their pills.

He said software is sewing together peoples’ activities at home and on smart phones to their cars and getting a “good profile on what you’re about.”

Steep also is an adjunct professor and executive director of the Stanford Global Projects Center’s Digital Cities Program at Stanford University.

He said that what is occurring now in the industry is not just about legal issues. There is an explosion of data layers creating a "plethora of complex equations" such that "we are going to lose control... technology will surpass our ability to manage," he said.

The U.S. Chamber Institute for Legal Reform owns Northern California Record.

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