What Does the Internet of Things Mean for Corporate Secrecy?

The Citizen's Guide to the Future
April 4 2014 10:39 AM

What Does the Internet of Things Mean for Corporate Secrecy?

Last week, a new group called the Industrial Internet Consortium—made up of several technology companies including AT&T, Cisco, GE, IBM, Intel and interestingly, Vanderbilt University—announced its plans to create engineering standards for the “Internet of Things.” IoT refers to the connection of smartphones, routers, thermostats, sensors, and other objects to the Internet and one another.

In IoT, we can see the classic trade secrecy conundrum—secrecy vs. disclosure—with a new twist. IoT creates an unusual (and perhaps groundbreaking) unity of interest between industry, the technology itself, and consumers on the openness and sharing side of the equation.  The IoT’s need for interoperability and connection may take precedence over manufacturers’ desire to keep their intellectual property locked down under a veil of secrecy. Because there is big money in IoT, industry might be forced to share with one another proprietary information related to open standards, like code and capabilities.


But there’s a hitch. In this IoT model, industry’s desire for secrecy is challenged by the technological need for openness.  “Sharing” proprietary information and openness are not time-honored traditions in commerce and among competitors—secrecy is.  But for the IoT to reach its potential, a lot more sharing and openness, and a lot less secrecy, will be required.  If the IIC’s essential goal of “breaking down technology silo barriers to drive better Big Data access and improved integration of the physical and digital worlds” is to occur, as one commentator has described it, then the IIC and its members will have to come to terms with their goals’ impact on what they do with their most valuable secrets.  As a result, industry is seemingly pitted against itself.    

The risks of getting this balancing wrong are significant: It could affect the capabilities of the technology and consumers’ willingness to purchase and use it. Users will want to know what the IoT knows about them and what it can do, if not in specifics, then at least generally.  For example, if the meter in your home is collecting data, what data is it?  What does it say about you and your family?  And where is it being stored—in your neighbor’s house, or somewhere else? Moreover, users may want to build their own IoT goods and services and offer informed input to industry so as to improve or alter existing IoT. Sure, if industry gets it wrong at first, they could always correct—but that would cost money, hurt technological adoption and cause the public to doubt the IoT industry’s claims of good intentions.

While most people may now be accustomed to the connectedness of their desktop computer and smartphone, what will consumers think about a thermostat that violates their privacy by secretly sharing personal data from their homes, with trade secrecy as the barrier to confirming what exactly is being shared? When—and it is likely a when—an IoT router is hacked, creating security loopholes that allow consumer private data to be mined by who knows who, or the connected device to be controlled by someone with bad intentions, will the manufacturer claim that information about the exploit is a trade secret? (Change the hacked device to a pacemaker and the ramifications go well beyond informational and financial security.) And while we’re at it, how about those trade-secret protected algorithms that can be used within IoT to mine and order all gathered information from any source?

While it might be too hopeful to predict a world of costless communal sharing for the benefit of humanity, it would not be a stretch to envision IoT forcing us to reconsider how and when commercial and proprietary information might be disseminated for the good of all of us, industry and its customers.  And if that happens, then the predictions of IoT as technologically revolutionary may take on a much more important, and human, dimension.

Future Tense is a partnership of SlateNew America, and Arizona State University.

David S. Levine is an associate professor at Elon University School of Law, an affiliate scholar at the Center for Internet and Society at Stanford Law School, and the founder and host of Hearsay Culture on KZSU-FM Stanford University.



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