IP for innovators

April 24th, 2017 / By: / Featured

Wearable technology faces rising legal questions.

Wearable technology is impacting the college and professional sports industry at every level from fitness training to spectator engagement. With the trend set to increase over the next five years, it is worthwhile to ask, “What could this mean for intellectual property (IP) and data ownership?”

Consider the audience

Technological advances have a history of impacting not just how sports appear, but how they are experienced and played. The U.S. Golf Association (USGA) says, for example, “The main objective of Rules [relating to equipment design] … is to ensure that technological advances in the design and manufacture of golf equipment are in the best interests of the game of golf”.

A player is expected to use a golf ball that meets exact specifications, based on rules first introduced in 1976. This coincides with the increase in television audiences for the sport, largely as a result of the more widespread availability of color television that made it more interesting as a spectator sport. The dangers of not appealing to television audiences could be seen in the reduced popularity of the fast-moving, low-color sport of table tennis from the mid-1970s. Golf, in contrast, has maintained its pace, spectacle, audience and sponsorship.

So, how does wearable technology figure in? In fact, wearables are set to play a central role in sport for the foreseeable future, with the technology being used in many ways from increasing television audience interaction to gathering player data during training and games. What this means in terms of IP and data ownership is that the number of stakeholders is increasing—which compounds the complexity of issues to be addressed.

In professional sports leagues around the world, wearable biometric trackers that provide players’ statistics are the norm, but who should have access to the information is in hot debate.
In professional sports leagues around the world, wearable biometric trackers that provide players’ statistics are the norm, but who should have access to the information is in hot debate.

Data as currency

Team owners, sponsors, coaches and players have long had a vested interest in player fitness and performance. The data has to be facilitated, gathered, measured and distributed, which brings an additional group of stakeholders to the table, such as STATS and Catapult that specialize in data measurement for sports. Based in the US, STATS gathers, compiles and distributes sports data for baseball, basketball and other sports aimed at enhancing team performance and fan engagement. The company describes their technology as offering “a new NBA fingerprint” using STATS SportVU data. This metric, termed “impact percentage,” provides information on how often a player terminates possession as well as how they impact a possession with a drive, a ball screen, an isolation or a post up.

Data gathered in this manner is sometimes made available to the public, or it can be restricted to coaches and players. The information (however it is used) has significant financial value, and cases of this kind are already leading to lawsuits over IP infringements.

“Today’s currency is data” according to Edith Ramirez when she served as chair of the Federal Trade Commission (until January 2017). On March 17, 2017, Adidas filed a lawsuit against Asics accusing them of infringing ten of its patents relating to fitness software, wearable devices and fitness data sharing. The company claims to be “the first in the industry to comprehensively bring data analytics to athletes”, which makes it difficult for competitors to develop product in the area without either reaching an agreement with Adidas or facing a legal challenge. This is not the brand’s first legal action in this field, having previously sued Under Armour in 2014. In that instance, an out-of-court settlement was reached.

With the fitness tracking market projected to grow to $5.3 billion by 2019, according to market researchers Park Associates, lawsuits may very well continue. Individuals and start-ups have operated effectively in wearable technology, producing innovations that have helped to develop the industry. While important to protect IP, it would also be unfortunate if the prospect of legal action were to deter the generation of new ideas.

The hacker problem

Competitors are not the only challenge facing wearable technology’s data gathering; it is also vulnerable to hackers. The range of technologies and systems that communicate in generating Big Data is problematic from a security point of view.

Sanjay Sarma, co-founder of the Auto-ID Center at MIT laments the absence of a comprehensive security strategy around the Internet of Things (IoT). The problem is that even if an individual system is secure because of its nature, “The chain will only be as strong as its weakest link,” Sarma says.

Radio-frequency identification (RFID) tags are just one of the technologies that can be used in wearables for the gathering and transmittance of data. The chips can be cloned, overwritten, have data transposed from one chip to another or cookies placed on the chips in just the same way that they appear on the Internet. For the sports industry it is easy to see how it might be used to distort data on player fitness or team performance in a way that is not immediately obvious.

Part of the issue, ironically, is the low cost of RFID tags that make the price of security encryption relatively high in comparison. The chip can cost as little as a quarter but the encryption protection as much as $5. It could be likened to making weekly car repayments of $100 but paying an insurance premium of $2,000.

Katherine Biritton of Simmons Legal PPLC, writing for the American Bar Association Journal Landslide, raises the question of whether the U.S. government is regulating sufficiently to address security and data privacy in the wearables industry. Her conclusion is that more needs to be done, particularly for future uses of data that may not be anticipated in the original agreement between the subject and data owner.

“If a customer approves his or her data to be collected and used for a particular purpose today, that does not mean the use could be different in the future,” Britton writes. She also notes that while data can be de-identified, it can also be re-identified if proper security safeguards are not in place.

The future is also of concern to college athletes at the University of Michigan. The university signed a deal with Nike worth an estimated $170 million, one of the most lucrative in college sports. However, there is a concern that a clause in the contract would allow the sportswear brand to harvest athletes’ personal data, using wearable technology, for future use. This is not clearly defined, nor is it assured that the data gathered is not vulnerable to hackers.

Innovation and the development of strong IP for wearable technology in sports has a vitally important role to play in the future of sports. Protection needs to be offered to individuals, brands, start-ups and teams. Given the complexity and number of stakeholders, it is easy to point to someone else who should take responsibility for drawing up protective codes of practice. But just as collaboration proves possible in lucrative product deals, it is necessary to cooperate in the creation of an IP blueprint that offers protection to all. Otherwise, the only people to benefit will be lawyers.

 

Marie O’Mahony is Professor of Digital Futures at Ontario College of Art and Design (OCAD) University, Toronto. She is the author of several books on advanced and smart textiles published by Thames and Hudson and a member of the Canadian Smart Textile and Wearables Innovation Alliance (STWIA).