[co-author: Caroline Jones]
On July 26th, Hogan Lovells hosted another installment in its 2017 webinar series on emerging issues involving the Internet of Things (IoT). This webinar focused on potential legal issues with connected vehicles and smart cars, including in the areas of regulatory compliance, privacy, litigation, and intellectual property.
Lance Bultena, a partner in Hogan Lovells Washington, D.C. office, moderated the discussion. Lance opened by explaining why the automotive industry is changing, emphasizing that the world is younger, more urban, more connected, and more concerned about the environment. Connected vehicles have emerged, in part, as a response to these changes, creating opportunities for new revenue streams for original equipment manufacturers (OEMs), equipment suppliers, content and applications developers and others. Furthermore, advances such as driverless cars have the potential to significantly reduce the costs of transportation and infrastructure, in addition to reducing accidents and promoting environmental efficiency.
Fast, reliable communications networks are essential for high-quality connected vehicle applications, and there is robust competition for access to the wireless networks and spectrum that enables them. Auto companies currently have access to special purpose spectrum for dedicated short-range communications (DSRC) that is immediately adjacent to a popular 5 GHz Wi-Fi spectrum band. DSRC technology enables vehicle-to-vehicle communications that auto companies use primarily for safety applications. Wi-Fi advocates argue that auto companies should share this spectrum, which could affect the reliability and safety of DSRC applications. These industries are battling not only at the Federal Communications Commission (FCC), the United States telecommunications regulator, but also at the National Highway Traffic Safety Administration (NHTSA). Under former President Obama, NHTSA proposed to mandate vehicle-to-vehicle technologies in all light vehicles in the United States, citing the potential to reduce accidents caused by human error. The current administration will likely determine the outcome of that proposal.
At the same time, the auto industry is leading efforts to address a number of privacy concerns raised by the data collection required for these applications. This data collection enables a host of benefits, including safety, vehicle diagnostics, entertainment services, and in-vehicle application offerings. Recognizing the sensitivity of geolocation, biometric, and driver behavior information, nearly all OEMs have adopted a set of privacy commitments that provides protections beyond what is currently required by law in the United States. Automotive trade associations and OEMs have also developed best practices to address cybersecurity issues such as remote vehicle hacking and signal jamming.
Webinar panelists also discussed new litigation risks and patent licensing issues associated with connected vehicles in the United States and abroad. As connected vehicle applications reduce the occurrence of accidents, drivers may blame their vehicles for those that do occur. This may lead to an increase in class-action claims against OEMs and equipment suppliers. OEMs should use software updates to address and minimize safety risks. They should also take steps via indemnification and representations from third-party suppliers to further manage these risks. Moreover, because the standards for communications systems involve thousands of patents, companies must also evaluate their existing IP portfolios and determine whether they must secure licenses to employ new technologies.
As the automotive industry moves to bring new applications to market, companies must consider all of the emerging regulatory, privacy, IP, and litigation issues. Hogan Lovells’ Automotive and TMT groups have specialists in each of these areas, in the United States and abroad. As leaders in the IoT space, we are eager to help you maximize the value of the exciting new opportunities that IoT represents for the automobile industry.
For a full recording of the webinar, please click here.
