United States: The Internet Of Things And The Inevitable Collision With Product Liability PART 5: Security And The Industrial Internet Consortium

The rapid emergence of the Internet of Things (IoT) led to the establishment of the Industrial Internet Consortium (IIC) in the spring of 2014 by five primary stakeholders: AT&T, Cisco, General Electric, IBM and Intel. IIC now claims a membership of 211 in more than 26 countries. Each of the five founding members, like many other companies, is undergoing significant transformations within their core business platforms to take advantage of the immense growth opportunities with IoT.

On November 3, 2015, the IIC held its initial Industrial Internet Security Forum at IBM's New York City headquarters. Not surprisingly, security, security and more security was the theme du jour.

Part of IIC's mission statement is "To bring together the organizations and technologies necessary to accelerate the growth of the Industrial Internet by identifying, assembling and promoting best practices." Its goals are to:

  • Drive innovation through the creation of new industry-use cases and test beds for real-world applications
  • Define and develop the reference architecture and frameworks necessary for interoperability
  • Influence the global development standards process for Internet and industrial systems
  • Facilitate open forums to share and exchange real-world ideas, practices, lessons and insights
  • Build confidence around new and innovative approaches to security.

Guest speakers at the program were members of the IIC and security experts. Key takeaway points from this meeting include the convergence and friction between information technology (IT) and operational technology (OT); the inevitable identification of payloads for IoT cyberattacks; interoperability issues and defense of legacy technologies; and perimeter defense and partition of systems to improve security. All of these terms and concepts were addressed by speakers and panelists to define IoT security within the Industrial Internet.

Opening remarks by Lynne Canavan, IIC's Vice President of Program Management, emphasized IIC's mission statement and the charter of the Security Working Group to "define a security and privacy framework to be applied to technology adopted by the IIC." This "will establish best practices to be used to identify security gaps in existing technologies."

Key Drivers

Brian Dalgetty of IBM IoT, Industry Solutions, identified some of the key driving and disruptive forces of IoT, which include improving operations and lowering costs, creating new business models and products, and driving engagement and customer services. Among the challenges identified were (1) the unprecedented data volumes, (2) fundamental shifts in business models, (3) incompatible standards, (4) entirely new security threats and (5) the new privacy landscape.

While big data is one of the driving forces behind the IoT, Dalgetty observed that 60 percent of data collected loses its value within seconds. Part of IBM's strategy is to partner with companies that provide services for the IoT, and not necessarily to make new things. IBM wants to capture data and use it to transform businesses. To that end, it is developing horizontal platforms with partners. Collecting and capturing the data, however, is not the end game. The application of the data is the new game.

One innovative IoT application identified was Daimler's Car2Go, which is a new concept for renting vehicles. Among the new features is providing insurance as well as a menu of options to have interconnectivity services with the vehicle. Airbus was another example of a company that is optimizing operations and performance with real-time monitoring of critical components in their aircraft engines. Among the benefits of optimizing operations is to increase the resale value of aircraft by as much as 20–25 percent due to the employment of advanced maintenance features.

Health Care and the IoT

Beth Hoenicke, Senior Integrated Computer Solutions strategist with Johns Hopkins University, discussed many of the advances IoT will make in the health care industry. She described a digestible pill that when swallowed by a patient would allow a medical service provider thousands of miles away to conduct a diagnostic analysis. She referenced a McKinsey & Company forecast that 40 percent of the Industrial IoT will be in the health care industry. However, there will be a lot of data "exhaust" (pollution) from all the information generated. In addition, the continuing use of legacy technology with IoT will present challenges.

While harmonization of standards is a desirable goal, Hoenicke noted that "one size fits all" is not achievable, so there will be challenges among industrial sectors, as well as between the advanced nations at the forefront of the development of IoT and the less-developed nations to work out standards that will help with interoperability of different platform applications of products.


Steve Hanna of Infineon Technologies discussed the use of advanced chips with encryption to help secure IoT products. He noted that while the need for software patches will be inevitable as there is widespread agreement that there is no software code written that does not contain vulnerabilities, the use of encrypted software patches is viewed as a means to prevent reverse engineering of patches and can help prevent counterfeiting by competitors. However, security challenges exist in network systems, software and the cloud.

Infrastructure: OT versus IT

Jesus Molina, Security Consultant, Fujitsu, and co-chair of the Security Working Group for the IIC, discussed the challenges faced by an aging legacy infrastructure. Industrial systems with cyber-physical components were created with security assumptions that are no longer valid. He noted the distinctions between IT and OT and that in the past there was a separation between the two, but they are merging and in a short period of time may be indistinguishable.

With OT, the first priority is safety to prevent injury or death, preserve the public welfare and avoid an environmental catastrophe. The second priority is reliability of the operation of the machinery and infrastructure. Among the challenges is that OT generally has a slower path to an upgrade whereas IT can be upgraded routinely on an almost daily basis. Old technology deployments being married with new technology was also identified as security vulnerability. Older technology deployments will not go away due to the significant capital investment required to develop the new technology deployments. Molina also emphasized that with so many IoT-connected devices and their vulnerabilities to hacking, it is only a matter of time before hackers identify "payloads" that will drive the monetization of the cyberattacks. This pattern is similar to what occurred with the development of PCs and servers. Hackers were initially able to gain access to them, but it took time before they realized the opportunities to secure confidential data and financial information and thereby monetize their criminal activities.


The program concluded with a panel discussion moderated by Francis Cianfrocca of Bayshore Networks. The panelists included (1) Tim McKnight, Global Chief Information Security Officer with GE, (2) Demitrios Pendarakis, IBM Watson Group, (3) Brian Witten, Symantec, and (4) Mike Firstenberg, Waterfall Security. The panel discussed the convergence of IT and OT as a crucial challenge faced by the Industrial Internet of Things. OT deals with the maintenance and operations of the machines that are required to run 24/7. The challenge for IT is to monitor and constantly ensure the security of the software program operating the new IoT industrial applications. The two tech teams do not always see eye-to-eye and at times can feel challenged that each is working at cross purposes to the other's goals. However, without the cooperation of the two, the Industrial Internet of Things will remain vulnerable. Nation state hacking and organized criminal hacking were also identified and discussed as being present threats that will remain threats for the foreseeable future.

The development and deployment of IoT across so many industry sectors is beginning to reveal the patterns of similarities in security concerns as well as the unique challenges that each technology sector will be required to confront as product and service platforms emerge. Meanwhile, the steps being taken by the IIC to establish a framework of open cooperation and sharing of ideas and experiences holds some promise that the inevitable collision of product liability and cyber security issues will be mitigated to some extent. Ideally, as threats are identified, new solutions will be developed and shared across industry sectors.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions