wearable technology: the present and future of...

© 2014 LOEB & LOEB LLP

Wearable Technology: The Present and Future of Sports and Entertainment

Brian Socolow Partner, Loeb & Loeb LLP

9.16.2014

2 © 2014 LOEB & LOEB LLP

: Today’s Topic: Wearable Technology

•  What is wearable technology?

•  How it is used by:

•  Consumers

•  Elite athletes, teams and leagues

•  Entertainers

•  Some emerging legal issues are in sports/entertainment


What is Wearable Technology?

Clothing and accessories incorporating computer and advanced electronic technologies, worn on (and perhaps eventually in) a person’s body that: •  Collect data about the wearer: motion, speed,

temperature, effort, sleep, food consumption, etc. •  Store, analyze and/or transmit data •  Charge or store electronic devices

•  Function as computers, cameras, music players and phones, among other things


What is Wearable Technology?

•  Wearable computers (Google Glass) •  “Smart” watches (Apple Watch) •  Activity tracking devices – watches, bands, on-

bike computers and other devices •  Sensors imbedded in clothing/shoes/equipment •  Amplified and enhanced reality for skill

development and gaming •  Technology-enabled clothing •  E-Textiles/smart textiles/smart fabrics


Examples of Wearables


The Wearable Technology Industry


The Wearable Technology Industry

•  Industry size is hard to pin down because of breadth of what wearable technology means

•  One projection: $30 - $50 billion industry in the next three to five years

•  Led by consumer spending on wearable technology including smart watches, smart glasses, and wearable sensors

•  Sport and fitness-related technology not expected to continue to lead consumer market

© 2014 LOEB & LOEB LLP 8

Amplified and Enhanced Reality

•  Gamegolf - http://www.gamegolf.com/products/en-us/gamegolf by S.F.-based Active Mind Technology

•  Sensors are worn by golfer and placed in tags on grip of club

•  Data is captured and transferred to a digital destination

•  Uses personal GPS, 3-D motion sensor technology and Geospacial technology

•  Collects data regarding distance ball traveled

•  Online social component – personal data is uploaded and shared to other users


Applications for Athletes, Teams and Leagues

Training

•  Collecting and analyzing data on output (e.g., speed or accuracy)

•  Collecting and analyzing biometric data (e.g., respiration, heart rate, body temperature, etc.) and psychometric data (e.g., stress level and energy output)

•  Collecting and analyzing data to improve skills, technique, form

•  Tracking stats for improvement


Applications for Athletes, Teams and Leagues

•  In-game performance and coaching

•  Collecting and using data to make real-time adjustments in athlete play and in team strategy

•  Safety •  MC 10 Hydration monitor •  Reebok CHECKLIGHT™ measures force of impact,

flashes red if player is hit too hard


Other Possible Applications for Sports

Fan Engagement

•  Live, broadcast and second screen implications

•  Enhanced fan experience

•  Gaming and social elements

•  Video and gaming play (e.g., GolfGame by Active Mind Technology )

•  Fantasy leagues and daily play fantasy sites


Other Possible Applications for Sports

•  College and professional team recruiting

•  Contract and salary negotiations


Applications for Entertainment

•  Gesture-sensing wearable instruments to create music (e.g., Imogen Heap Gloves Project)

•  Wearables to enhance performance (e.g., iRing, eMersion to control music)

•  Performer biometric and psychometric monitoring

•  Fan engagement – interaction with fans

•  Live, broadcast, second-screen

•  Video and gaming play


Legal Implications

•  Patent/Intellectual property issues

•  Product liability

•  Data Ownership/Access/Privacy

•  Employment and labor law issues

•  Regulatory concerns


Intellectual Property Issues

•  Is the technology patentable?

•  Who owns the patents?

•  Permissible (and non-permissible) uses and extensions of technology

•  Licensing


Intellectual Property Issues: Adidas v. Under Armour

•  Adidas sues Under Armour for infringing its patents with its fitness tracker app, MapMyFitness®

•  Claims infringement of 10 patents for, among others,

•  “real-time interactive communication and automated route generation”

•  “personal data collection systems and methods”

•  “performance monitoring apparatuses” •  Adidas seeks injunctive relief, royalties and providing triple damages

for willful infringement


Product Liability Issues

•  Voluntary recall of Fitbit Force wristband activity tracker - Complaints of skin irritation - Fitbit declined to say how many were affected - Under 2 percent of users complained

•  Could see increase in claims against designers, manufacturers, and distributors of wearable technology marketed to amateur and professional athletes

•  Federal Trade Commission - will focus on these products and how they are marketed and advertised


Data Privacy Issues


Privacy Issues

•  Most wearable devices used in sports (and to a lesser degree, entertainment) collect, store and transmit data

•  What data is being collected? •  Is it personally identifiable information (PII)? •  Is it sensitive medical data?

•  How is it being used? •  How is it transmitted, stored and protected?


Privacy Issues

•  Who owns the data? •  Athlete? •  Team? •  League? •  Organizer of event?

•  May depend on how/when data is collected (individual training, team practice, in-game collection, tournament or event?)


Who Owns The Data?

•  Contracts may specify who owns what data

•  Employment contracts

•  Collective bargaining agreements

2011 NFL collective-bargaining agreement, Article 51, Section 13(c):

"The NFL may require all NFL players to wear during games and practices equipment that contains sensors or other non-obtrusive tracking devices for purposes of collecting information regarding the performance of NFL games, including players' performances and movements, as well as medical and other player safety-related data.“

•  Contracts with the device manufacturers

•  Contracts with related apps


Privacy Issues

•  Who has access to the data? •  Athletes •  Other teams?

•  May depend on how/when data is collected (individual training, team practice, in-game collection, tournament or event?)

•  May depend on third-party agreements for use of data •  Broadcast partners •  Fantasy sports


Privacy Issues

•  Who owns data and who has access to data impacts how data may be used

•  Notice and consent on collection and use of data? •  Professional athletes •  College athletes

•  May be governed by different agreements •  Collective bargaining agreements •  Agreements with event sponsor/organizer •  Agreements with third parties (e.g., trainers,

endorsers, etc.)


Data Security Issues

•  How data is safeguarded during collection, storage, transmission

•  Where is data stored? • Cloud storage security issues •  Third-party storage providers


Other Privacy and Data Security Issues

•  Privacy of consumers •  Spectators •  Consumers participating in gaming/enhanced reality

play and social media


Employment and Labor Law Issues

Uses for Biometric and Other Data •  Professional athlete’s employment prospects (e.g.,

influencing perceptions of an athlete’s athletic promise and achievement)

•  Salary •  Setting performance benchmarks •  Monitoring •  Enforcement of conditions of employment •  Improve player performance •  Engage fan base



•  Can a player’s (or performer’s) lapse be grounds for

termination? •  Should fans have access to this information? •  Do related apps have access to otherwise private data

concerning an athlete’s medical/biometric stats?



Potential For Negative Use •  Checklight and other safety equipment - puts pressure on

organizations and leagues to monitor safety considerations •  What if a team decides to keep a player on the field despite

sensors showing a traumatic hit? •  What if a player loses playing time—and, potentially, immediate

and long-term earnings—because of safety considerations? •  Use of these devices needs to be worked out in advance •  Despite interest in avoiding liability for injury to players, it’s not

clear that a wearable should be the ultimate arbiter of acceptable risk


Regulatory Concerns

•  Privacy laws - still evolving •  Patchwork of state and federal laws concerning data collection and

dissemination

•  Issues with direct regulation and oversight of devices •  “Checklight”—which monitors impact through chips on a skullcap—is

not currently under FDA “medical device” overview

•  As devices become more invasive, government intervention will become more likely


What to Expect In The Future

•  Devices/chips physically implanted in the user •  Monitoring and tracking of more sophisticated (and

intimate) physiological data •  Challenges

•  potential side effects •  privacy concerns •  legal challenges

•  Increased attention of regulators such as FTC


QUESTIONS?

© 2014 LOEB & LOEB LLP

Wearable Technology: The Present and Future of Sport and Entertainment

Brian Socolow 212.407.4872 [email protected]

wearable technology: the present and future of...

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