M

Attorneys at Law

edenica Law PLLC

Olivera Medenica

3 Columbus Circle, 15th Fl.

New York, NY 10024
Tel: (212) 785-0070
Fax: (646) 514-5302
OMedenica@MedenicaLaw.com

WEARABLE TECHNOLOGY AND

THE FASHION INDUSTRY

Medenica Law PLLC White Paper Series October, 2016

Authors:
Olivera Medenica, Esq.
Perri Michael
Tiffany Pho
Anna Radke
Elisabeth Schiffbauer

I.

Introduction

Named by Time Magazine as one of the Best Inventions of the Year,1 Google
Glass received a 12-page spread in Vogue, was the subject of comedy skits on Saturday
Night Live and The Colbert Report, appeared on presidents, royalty, as well as
celebrities around the world, and was integrated into Diane von Furstenbergs runway show
during New York Fashion Week 2012. Google Glass exploded with the kind of fuss and
pageantry usually reserved for an Apple iSomething.2 More surprising, however, has been
Googles announcement earlier this year that Glass is going away.3
Tech reviewers who finally got their hands on Glass described it as the worst
product of all time, aptly noting that it had an abysmal battery life, and that it was a
product plagued by bugs.4 Most notably, Glass raised privacy concerns, with people
afraid of being recorded during private moments, and has been banned from bars, movie
theaters, Las Vegas casinos and other places that did not want customers surreptitiously
recording.5
In other Google news, the company dropped its appeal seeking to overturn a fine
from Frances data protection authority, the Commission Nationale de Linformatique et
Des Libertes (CNIL), imposed in 2014,6 finding Googles unified7 privacy policy violated
Frances 1978 data protection law. Google was fined 150,000 euros ($171,821), the
CNILs highest-ever fine.8 Recently, on March 10, 2016, CNIL issued a verdict, in which
it fined Google Inc. 100,000 for failing to properly implement the right to be forgotten.9
The decision is based on the Judgment of the Court of Justice of the European Union
(ECJ) in Costeja v. Google, which stated that Internet users residing in Europe could ask

Nick Bilton, Why Google Glass Broke, N.Y. TIMES (Feb. 4, 2015), E1, available at
http://www.nytimes.com/2015/02/05/style/whygoogleglassbroke.html.
2
Id.
3
Nicky Woolf, Google Glass Ceases Production In Present Form, THE GUARDIAN, (Jan. 16, 2015, 3:26
PM), http://www.theguardian.com/technology/2015/jan/15/googleglassceasesproductionfornow.
4
See supra note 2.
5
Id.
6
Rick Mitchell, Google Drops Appeal of French Fine Over Single Privacy Policy Across Products,
Bloomberg BNA Daily Report for Executives (Feb. 6, 2015),
http://dailyreport.bna.com/drpt/display/batch_print_display.adp.
7
Id. (Google launched its unified privacy policy in March 2012 to track user information across its e-mail,
social networking, YouTube, search engine and other services, as part of a plan to integrate multiple
privacy policies into one.)
8
Id.
9
Decision no. 2016-054 of March 10, 2016 of the Restricted Committee issuing Google Inc. with a
financial penalty available at: https://www.cnil.fr/sites/default/files/atoms/files/d2016054_penalty_google.pdf

search engines to delist their personal data.10 Google has also been sued in additional EU
jurisdictions.11
The above illustrates some of the prominent issues faced by a company in the
advent of wearable technology. While privacy currently is arguably the largest obstacle
facing consumers and businesses, additional issues regarding employment, intellectual
property, and product liability will be discussed below.
a.

What is Wearable Technology?

Both the newest [tech] trend and one of the oldest we have been wearing
functional objects ever since watchmakers like Peter Henlein developed portable clocks in
the 16th century.12 Wearable technology encompasses innovations such as wearable
computers or devices; augmented reality (AR); and virtual reality (VR).13 Currently, the
existing wearable technology market is primarily comprised of smart glasses, watches, and
fitness gear, such as the SCOTTeVEST and other Technology Enabled Clothing (TEC),
that allow a wearer to store and use electronic devices.14
Some exciting potential professional uses of wearable technology include surgeons
using wearable technology to perform complex procedures, and even performing
procedures remotely with wearables,15 firefighters using wearable technology, such as
Google Glass, to respond to fires and other emergencies, with maps of the emergency site
16
and retailers target[ing] shoppers with personalized services and promotions either
inside their stores or before the customers even arrive.17 Some airlines are already using
wearable technology to compile personal passenger profiles to provide more personal
service.18

11

Supra 6. (On January 30, 2015, the U.K. Information Commissioners Office ordered Google to improve
its privacy policy in the U.K. by providing more information to service users about how it collects their
personal information. On December 15, 2014, the Dutch Data Protection Agency issued a cease-and-desist
order to Google regarding its privacy policies. Spains Data Protection Agency levied a 900,000 euro ($1
million) enforcement fine against Google over its unified privacy policy and also faces actions in
Germany and Italy, as part of a joint EU enforcement action on Googles privacy policy.)
12
Emma Poole, The Brave New World of Wearable Technology: What Implications for IP?, WIPO
MAGAZINE (June 2014), http://www.wipo.int/wipo_magazine/en/2014/03/article_0002.html.
13
Id.
14
Brian Socolow, Wearable Technology: The Next Big Thing in Fitness and Sports,
http://groupynetwork.com/wearable-technology-the-next-big-thing-in-fitness-and-sports, (last visited Mar.
30, 2015).
15
Anahad OConnor, Google Glass Enters the Operating Room, N.Y. TIMES (June 1, 2014, 12:01 PM),
http://well.blogs.nytimes.com/2014/06/01/google-glass-enters-the-operating-room/?_r=0.
16
Joanie Ferguson, Firefighter Creates Google Glass App to Help Save Lives, DAILY DOT (Mar. 5, 2013,
2:28 PM), http://www.dailydot.com/technology/firefighter-google-glass-app/.
17
Adam D. Thierer, The Internet of Things and Wearable Technology: Addressing Privacy and Security
Concerns Without Derailing Innovation, 21 RICH. J.L. & TECH. 6, 29 (2015).
18
Nicola Clark, Cool or Creepy? Airlines Use Digital Technology to Get Even More Personal, N.Y. TIMES
(Mar. 18, 2014), at B4, available at http://www.nytimes.com/2014/03/18/business/airlines-use-digitaltechnology-to-get-even-more-personal.html.

Many wearable technology devices interact with smartphones and tablets via apps
to track users sleep, health, and movement patterns. This constant monitoring via smart
devices, apps, and wearables has additionally inspired the health trend, the quantified self,
which refers to individuals who use digital logging tools to continuously monitor their daily
activity and well-being.19
As opposed to other smart devices such as phones or tablets, wearable technology
is personal. Other devices such as tablets may be shared among several users, but wearable
technology may be specifically designed or adapted to a single person. Wearables are not
tied to a particular location and [are] continuously acquiring data as a user transitions from
situation to situation and place to place.20 Unlike other devices that may be used during
the day or work hours, wearables are constantly operating (or are ready to operate) at night,
and during personal or intimate settings. Highly attentive to their environment, wearables
monitor and observe their location, collect information, and record their surroundings,
generating vast amounts of data.
b.

Wearable Technology and the Fashion Industry

What is different today is that technology developers are working to make wearable
devices more fashionable. Many wearables are clunky and unsightly, which has likely
limited their adoption to some degree.21 This may change with the development and use
of conductive fibres, which will allow wearables to become incorporated into more
stylish clothing; making the fabric itselfan electronic device.22
The emergence of wearable technology is generating partnerships between
designers, fashion houses and large tech companies. Before wearable technology, tech
companies were used to designing products for their functionality, such as computers and
cell phones; they were not used to designing wearable products for consumers. This is
where the fashion industry has a much bigger role to play in helping wearables find the
right balance as fashion objects emerging from the consumer electronics industry.23 These
increasingly important partnerships stress collaboration from the start of the design
process, so that technological design teams can work towards understanding design fit for
consumers.24

19

Gary Wolf, The Quantified Self, TED Talks (June 2010),

http://www.ted.com/talks/gary_wolf_the_quantified_self?language=en.
20
Stephen S. Intille, Ph.D & Amy M. Intille, J.D., New Challenges for Privacy Law: Wearable Computers
That Create Electronic Digital Diaries, (Sept. 15, 2003), http://www.ccs.neu.edu/home/intille/papersfiles/IntilleIntille03.pdf.
21
Adam D. Thierer, The Internet of Things and Wearable Technology: Addressing Privacy and Security
Concerns Without Derailing Innovation, 21 RICH. J.L. & TECH. 6, 23 (2015)..
22
Woven Electronics: An Uncommon Thread, THE ECONOMIST, Mar. 8, 2014, available at
http://www.economist.com/news/technology-quarterly/21598328-conductive-fibres-lighter-aircraftelectric-knickers-flexible-filaments.
23
Vikram Alexei Kansara, Amanda Parkes on Why Wearable Tech is About More Than Gadgets, THE BUS.
FASHION, (Nov. 30, 2014, 10:49 AM), http://www.businessoffashion.com/2014/11/amandaparkes
wearabletechgadgets.html.
24
The N.Y. Times Conferences, Can Wearable Tech Be Luxury Fashion?, YOUTUBE (Dec. 2, 2014),
https://www.youtube.com/watch?v=tS0tuFsOOU.

On January 13, 2014 the Council of Fashion Designers of America (CFDA) and
Intel entered into a strategic collaboration to create a community for technology
developers and fashion designers focused on wearable technology.25Additionally, in
December 2014, Luxottica Group announced its partnership with Intel to make wearable
technology stylish.26 Later in 2014, Apple added Burberry CEO Angel Ahrendts and YSL
Paul Deneve to its executive leadership,27 and as of February 2015, Google Glass is being
overseen by jewelry designer Ivy Ross. Designers, including Tory Burch and Rebecca
Minkoff have teamed up with FitBit and Case-Mate to create tech accessories,28 Michael
Kors also successfully partnered up with Android, and launched a chic smartwatch in the
fall of 2016.29
Levis together with Google designed The Levis Commuter x Jacquard by Google
Trucker Jacket, a piece of wearable technology aimed at urban cyclists. Its technological
advancement is based on a conductive yarn is weaved into the left cuff enabling touch
interactivity so users can tap, swipe or hold to fulfill simple tasks like changing music
tracks, blocking or answering calls or accessing navigation information (delivered by
voice).30 Other examples are garments measuring the wearer's vital metrics, such as a new
athletic shirt line launched by Ralph Lauren, named the PoloTech Shirt, which tracks
real-time workout data through fibers woven directly into the fabric of the item that read
the user's heart rate and other key metrics. The shirt is configured such that data is streamed
to the user's smartphone via a Bluetooth attachment.31 Designers have also tried to
incorporate social media into wearable technology. CuteCircuit introduced the world's first
haute couture Twitter Dress, an evening gown that displays tweets as they are received.32
While the marriage of fashion and technology is bringing together two powerful
industries, these collaborations may raise concerns. Large tech companies partnering with

25

Council of Fashion Designers of America, CFDA & Intel Unite on Wearable Technology, (Jan. 13,
2014), http://cfda.com/the-latest/cfda-intel-unite-on-wearable-technology.
26
Cynthia Martens, Luxottica Signs Intel Deal for Wearable Tech, Womens Wear Daily, Dec. 3, 2014,
http://www.wwd.com/accessories-news/eyewear/luxottica-signs-intel-deal-for-wearable-tech-8054996.
27
Connie Guglielmo, Apple Hires Wicked Smart Burberry CEO To Run Retail, Serve As First Woman On
Cooks Top Team, FORBES, (Sept. 15, 2013, 10:48 AM),
http://www.forbes.com/sites/connieguglielmo/2013/10/15/apple-hires-burberry-ceo-to-run-retail-serve-asfirst-woman-on-tim-cooks-top-team/.
28
Kim Bhasin, Michael Kors Is Getting Into Wearable Tech, BLOOMBERG BUS., (Feb. 5, 2015, 3:32 PM),
http://www.bloomberg.com/news/articles/2015-02-05/michael-kors-is-getting-into-wearable-tech; See also
Sharon Edelson, Rise of the Machines, WOMENS WEAR DAILY, (Dec. 19, 2014), at 12, available at
https://pmcwwd.files.wordpress.com/2014/12/wwd1219web.pdf
29
Brian Heater, Michael Kors Brings Really, Really Big Design to Android Wear, TECH CRUNCH, (Sept. 6,
2016), https://techcrunch.com/2016/09/06/michael-kors-access/.
30
Rachel Arthur, The Future of Fashion: 10 Wearable Tech Brands You Need to Know, FORBEs, (Jun. 30,
2016), http://www.forbes.com/sites/rachelarthur/2016/06/30/the-future-of-fashion-10-wearable-techbrands-you-need-to-know/#7d8406284852.
31
The Polotech Shirt, RALPH LAUREN,
http://www.ralphlauren.com/product/index.jsp?productld=699l7696&kw=polotech&sr=l&origkw=polotech
(accessed on Oct. 17, 2016).
32
The Twitter Dress, CUTECIRCUIT, http://cutecircuit.com/the-twitter-dress/#read-more (accessed Oct.
17, 2016).

a number of designers may have implications for a fashion companys intellectual property,
business operations, and trade secrets. Fashion companies may want to closely monitor
these partnerships, using vehicles such as licensing agreements or non-disclosure
agreements to protect their company information. In order to avoid partnership with a large
tech company, smaller companies that create components for fashion companies are
emerging, such as i.am+, recording artist Will.i.ams firm. As wearable technology is
seemingly here to stay, fashion designers and companies may consider having their own
in-house technology design departments, complete with software and hardware engineers.
Wearable technology has brought together fashion and technology, and the promise
of instant data, particularly regarding health. However, increased monitoring, production,
and quantification of new data is raising privacy and protection concerns.
II.

Privacy Considerations

Todays policy discussions relating to wearable technology reflect concerns about

privacy and security. A recent Federal Trade Commission (FTC) report (the FTC
Report) identified potential privacy risks associated with wearable devices including the
direct collection of sensitive personal information, such as precise geolocation, financial
account numbers, or health information, and the collection of personal information,
habits, locations, and physical conditions over time.33 While these risks are self-evident
in the context of Internet and mobile commerce, wearables present different challenges as
the volume of data gathered from users could be significantly, if not exponentially, higher
than regular mobile device, such as smartphones and tablets.
a.

For Consumers

Because much of the existing wearable market is comprised of health and fitness
devices, there has been a large focus on the types of data generated from these products.
Health and fitness wearables monitor and gather information such as steps per day, sleep
patterns, calories burned, and GPS location, and may also require users to input private
health information. While this data may be necessary for the wearables functionality, its
input, and subsequent management, leave the user vulnerable to potential third party
transfers or security breaches.
A recent Mobile Ecosystem Forum (MEF) report on the use of wearable devices in
the health sector found that the current global health and fitness app market is worth $4
billion and is slated to be worth $26 billion by 2017.34 FTC guidelines apply to digitial

33

Federal Trade Commission Staff, Internet of Things: Privacy & Security in a Connected World, (Jan.
2015), at 14, available at http://www.ftc.gov/system/files/documents/reports/federal-trade-commissionstaff-report-november-2013-workshop-entitled-internet-things-privacy/150127iotrpt.pdf.
34
MEF, GLOBAL MHEALTH & WEARABLES REPORT 2015: MEASURING AWARENESS OF
WEARABLE DEVICES AND THE EMERGENCE OF MHEALTH AND WELLBEING (2015),
http://www.mobileecosystemforum.com/wp-content/uploads/2015/04/mHealth-wearables-reportFINAL.pdf.

health applications.35 In September 2013, the United States Food and Drug
Administration (FDA) released guidelines on mobile medical devices.36 A loophole
exists in these guidelines as they apply only to apps that are promoted for medical
purposes, such as the diagnosis, cure, treatment or prevention of a disease. Without a
secure privacy policy or protection from [the Health Insurance Portability and
Accountability Act], users health information obtained via these trackers could be sold to
third parties.37 Unless you live in a state that treats this health data as Protected Health
Information (PHI), developers may share your data without your permission.38
According to the FTC Report, massive volume[s] of granular data gathered by
devices allows those with access to the data to perform analyses that would not be possible
with less rich data sets.39 Consumers have additionally voiced concerns that the collection
of sensitive behavior patterns via wearable devices may be used in unauthorized ways or
by unauthorized individuals, and that companies may use collected data to make credit,
insurance, and employment decisions.40As mentioned above, data collection is critical to a
wearables optimum functionality, but is also a vast trove of valuable information for
tailored marketing purposes. Consumers want to know the answer to questions like: who
owns the data, where it is stored, if its encrypted, how it can be used, and whether the data
can be repackaged and sold for purposes not expected by consumers remains
unanswered.41
There are a variety of ways consumers can protect themselves. They can avail
themselves of password protect, security lockout, security software or encryption features
on the devices. Consumers can also disable third party cookies on devices that use Internet
browsers. As with any other device, they should be aware of dangers of cloud computing,

35

Digital Health, U.S. FOOD & DRUG ADMINISTRATION, http://www.fda.gov/medicaldevices/digitalhealth/

(accessed on Oct. 17, 2016).
36
Mobile Medical Applications: Guidance for Industry and Food and Drug Administration Staff, U.S. Food
and Drug Admin., (updated Feb. 9, 2015),
http://www.fda.gov/downloads/MedicalDevices/.../UCM263366.pdf.
37
Press Release, Senator Charles E. Schumer, Schumer Reveals: Without Their Knowledge, Fitbit
Bracelets & Smartphone Apps Are Tracking Users Movements And Health Data That Could Be Sold To
Third Parties; Calls For FTC To Require Mandatory Opt-Out Opportunity Before Any Pers. Data Can Be
Sold, (Aug. 10, 2014), http://www.schumer.senate.gov/newsroom/press-releases/schumer-reveals-withouttheir-knowledge-fitbit-bracelets-and-smartphone-apps-are-tracking-users-movements-and-health-data-thatcould-be-sold-to-third-parties-calls-for-ftc-to-require-mandatory-opt-out-opportunity-before-any-personaldata-can-be-sold.
38
Cindy Ng, 5 Privacy Concerns About Wearable Technology, VARONIS BLOG, (Mar. 11, 2014),
http://blog.varonis.com/5privacyconcernsaboutwearabletechnology/.
39
Federal Trade Commission Staff, Internet of Things: Privacy & Security in a Connected World, (Jan.
2015), at 15, available at http://www.ftc.gov/system/files/documents/reports/federaltradecommission
staffreportnovember2013workshopentitledinternetthingsprivacy/150127iotrpt.pdf.
40
Federal Trade Commission Staff, Internet of Things: Privacy & Security in a Connected World, (Jan.
2015), at 15, available at http://www.ftc.gov/system/files/documents/reports/federaltradecommission
staffreportnovember2013workshopentitledinternetthingsprivacy/150127iotrpt.pdf.
41
Hamza Shaban, Will the Internet of Things Finally Kill Privacy?,THE VERGE, (Feb. 11, 2015, 9:30 AM),
http://www.theverge.com/2015/2/11/8016585/will-the-internet-of-things-finally-kill-privacy .

and carefully read terms of service agreements and privacy policies before clicking accept42
Query whether consumers truly follow such guidelines, and the extent to which they are
even aware of data security risks when using wearables. There is no question, however,
that consumer sophistication and sensitivity to privacy measures is growing, and that
consumers will come to expect a company to address such concerns in a straightforward
and transparent manner.
b.

For Businesses

Given the discussion of privacy and data security risks above, companies
developing wearable technology products should implement reasonable security measures.
There is no one size fits all checklist, and reasonable security depends on a number of
factors, such as the volume and nature of data collected, and the cost of a potential impact
should a security breach occur. This is of particular importance for wearable technology
devices; since some devices possess tailored functions generating specific data the inquiry
into developing reasonable security measures is device-specific. According to Justin
Brookman, the consumer privacy project director at the Center for Democracy and
Technology, consumer protections should be baked in from the beginning of a
developing a product.43 Users should be in control of the devices they own. Companies
shouldnt just collect data unrelated to core functionality just on the theory that it might be
interesting for advertising or research one day, and too many Internet of Things devices
seem to be developed with security as an afterthought.44
Companies with wearable technology products should draft terms of service and
privacy policies accompanying their products that outline what data is collected, how it is
stored, its use, any third party involvement, and should clearly explain to consumers if and
how security updates are handled. Some options for companies to provide choice to
consumers before data collection include choices at point of sale, tutorials on privacy
settings, and choices during device set-up.45 These alternative options for choice are
particularly important for wearable devices that do not have a screen or interface to connect
with a consumer. When possible, companies should limit the collection and retention of
consumer data. Companies should also ensure that service providers maintain reasonable
security and oversight. Any collected sensitive information should be encrypted or
otherwise secured.
Additionally, companies should ensure that their personnel practices promote good
security. Discussed further below, companies and their human resources teams should
ensure policies, business operations, and employee contracts are updated and take into
account the implications of wearable technology and the workplace, and the need to protect
a companys confidential information, intellectual property, and trade secrets.

42

Privacy Rights Clearinghouse, Fact Sheet 18: Online Privacy: Using the Internet Safely, (Mar. 1, 2015),
available at https://www.privacyrights.org/online-privacy-using-internet-safely#cloud.
43
Alexei Alexis & Lydia Beyoud, Tech Week Ahead: Senate Panel on Internet of Things; FTC, FCC at
Capitol Hill Tech Talk, BLOOMBERG BNA, (Feb. 6, 2015),
http://dailyreport.bna.com/drpt/display/batch_print_display.adp.
44
Id.
45
Id.

III.

Privacy and Data Protection Laws

a.

The United States

One of the most central concepts in information privacy regulation is personallyidentifiable information (PII).46 The scope of privacy laws turn on whether PII is
collected. Generally speaking, information or a combination of information that can
identify an individual is considered PII and warrants protection. This includes, but is not
limited to an individuals name, social security number, biometric records, and medical,
educational, financial, and employment information.47
Currently, there is no comprehensive legal protection for personal information in
the United States, only a patchwork of laws that apply to specific areas. The FTC is the
administrative agency that enforces laws that protect consumers from unfair or deceptive
business practices. The Federal Trade Commission Act (the FTC Act or the Act)48
authorizes the FTC to seek equitable and injunctive relief, including redress, for the
violations of the Act, and provides a basis for government enforcement of fair information
practices. For example, failure to comply with stated practices and policies may constitute
a deceptive practice, and may be inherently unfair.49
The need to protect PII was first established by the Privacy Act of 1974, which
requires federal agencies to apply Fair Information Practices Principles (FIPPs) to PII.50
The FTC Report focuses on four FIPPs in particular: data security, data minimization,
notice, and choice with regards to the Internet of Things and wearable devices. As
mentioned above, with regards to data security, the FTC recommends companies
implement a security by design approach that assesses the privacy and security risks of
a product, both at the design stage and throughout the Internet of Things devices life
cycle.51
With data minimization, the FTC recommends limiting data collected and retained,
and disposing of data when it is no longer needed. It also addresses the concern that
maintaining large troves of consumer data could make a company a target for criminals
and could increase the risk that the company will use the data in a way that departs from

46
Rules and Policies-Protecting PII-Privacy Act, U.S. GEN. SERV. ADMIN., (last visited Apr. 1, 2015),
http://www.gsa.gov/portal/content/104256.
47
Erika McCallister et. al., U.S. Dept of Commerce, Natl Inst. of Standards and Tech., Guide to
Protecting the Confidentiality of Personally Identifiable Information (PII) (April 2010), at 2-1,
http://csrc.nist.gov/publications/nistpubs/800-122/sp800-122.pdf.
48
The Federal Trade Commission Act, 15 U.S.C. 41-58 (1949).
49
The Federal Trade Commission Act, 15 U.S.C. 41-58 (1949).
50
The U.S. Dept of Justice, Overview of the Privacy Act of 1974, 2012 Edition, (June 19, 2014),
http://www.justice.gov/opcl/overview-privacy-act-1974-2012-edition.
51
James N. Duchesne, et al., BALLARD SPAHR, LLP, Internet of Things: Federal Agencies Offer Privacy
and Data Security Best Practices, (Jan. 29, 2015),
http://www.ballardspahr.com/alertspublications/legalalerts/2015-01-29-internet-of-things-federal-agenciesoffer-privacy-data-security.aspx

consumers reasonable expectation.52 The FTC acknowledges the obstacles associated

with notice and choice, particularly with devices that do not have an interface, as discussed
above. Whatever approaches are chosen by a company, notification should be clearly and
prominently disclosed.53 Companies, are not required to provide choice before collecting
and using consumer data for practices that are consistent with the context of a transaction
or the companys relationship with the consumer.54 These practices, referred to as
commonly accepted practices, include product service and fulfillment, internal
operations, fraud prevention, legal compliance and public purpose, and first party
marketing.
The Obama Administration has advocated that these principles should govern
private-sector data collection and they have been formally included in the Consumer
Privacy Bill of Rights a framework developed by the current administration to address
consumer privacy concerns.55
On January 28, 2015, in honor of Data Privacy Day, U.S. Representatives Bobby
L. Rush (D-Ill.) and Joe Barton (R-Texas) reintroduced the Data Accountability and Trust
Act (DATA), H.R. 580.56 Substantially similar to the bill originally introduced by the
110th Congress, DATA requires commercial entities that own or possess any personal
information of consumers to implement effective information security policies and
procedures to safeguard that information.57
Members of the United States Senate Committee on Commerce, Science, and
Transportation have also entered into the growing policy debate surrounding the Internet
of Things and wearable devices, and held a hearing to discuss the issue on February 11,
2015.58 The hearing focused on how devices from home heating systems controlled by
users online to wearable devices that track consumers health will be made smarter and
more dynamic through Internet technologies.59

52

Id.
Id.
54
Federal Trade Commission Staff, Internet of Things: Privacy & Security in a Connected World, (Jan.
2015), at v, available at http://www.ftc.gov/system/files/documents/reports/federaltradecommission
staffreportnovember2013workshopentitledinternetthingsprivacy/150127iotrpt.pdf.
55
Consumer Data Privacy In A Networked World: A Framework For Protecting And Promoting Innovation
In The Global Digital Economy, THE WHITE HOUSE, (Feb. 2012),
http://www.whitehouse.gov/sites/default/files/privacyfinal.pdf.
56
Press Release, Representative Bobby L. Rush, Reps. Rush and Barton Reintroduce the Data Act (Jan. 28,
2015), http://rush.house.gov/mediacenter/pressreleases/repsrushandbartonreintroducethedata
act.
57
Press Release, Representative Bobby L. Rush, Reps. Rush and Barton Reintroduce the Data Act (Jan. 28,
2015), http://rush.house.gov/mediacenter/pressreleases/repsrushandbartonreintroducethedata
act.
58
The Connected World: Examining the Internet of Things, Hearing Before the: U.S. Senate Comm. On
Commerce, Science, and Transp., (Feb. 22, 2015, 9:45 AM),
http://www.commerce.senate.gov/public/index.cfm?p=Hearings&ContentRecord_id=d3e33bde-30fd-4899b30d-906b47e117ca&ContentType_id=14f995b9-dfa5-407a-9d35-56cc7152a7ed&Group_id=b06c39afe033-4cba-9221-de668ca1978a.
59
Id.
53

10

The FTC has shown that it is not afraid of changing its opinion as development of
data security progresses. On July 29, 2016, the FTC made the latest decision in its battle
with LabMD, Inc. (LabMD) when it reversed an initial verdict. The FTC determined that
LabMDs data security practices constitute an unfair act or practice within the meaning of
Section 5 of the Federal Trade Commission Act. It issued an Opinion and Final
Order requiring LabMD to notify affected consumers, establish a comprehensive
information security program reasonably designed to protect the security and
confidentiality of the personal consumer information in its possession, and obtain
independent assessments regarding its implementation of the program.60
b.

Europe and Other Countries

Privacy parameters are substantially different in other geographical locations, and

in particular in the European Union. The EU Data Protection Directive (the Directive)
is expected to be replaced by the uniform General Data Protection Regulation (the
regulation).61 On May, 4 2016, the official texts of the Regulation and the Directive were
published in the EU Official Journal in all the official languages. While the Regulation will
enter into force on May 24, 2016, it will apply starting from 25 May 2018. The Directive
enters into force on May 5, 2016 and EU Member States have to incorporate it into their
national laws by May 6, 2018.62 Each member state is required by the Directive to establish
a supervisory authority to implement and enforce its data protection laws.63 Many
member states currently require data processors to file annual summaries of the personal
data being processed.64 The regulation will require additional internal controls and
documentation relating to personal data processing, and will also require the appointment
of data protection officers.65
Other countries, such as Canada and Australia have their own sources of data
protection laws. In Canada, the Personal Information Protection and Electronic Documents
Act (PIPEDA), and in Australia the Privacy Act of 1988, which aim to address privacy and
data concerns.66
c.

Next Steps, Current Solutions

Existing legislation in the U.S. and abroad arguably may or may not address privacy
and data protection concerns. Given the speed of technological transformation, it is

60

In the Matter of LabMD, Inc., FTC, https://www.ftc.gov/system/files/documents/cases/160729labmdopinion.pdf.

61
Olivera Medenica, The Importance of Counsel in the Context of the Fashion Industrys Emerging Issues,
in NAVIGATING FASHION LAW, 58 (Aspatore Books 2015),
62
Protection of Personal Data, EUROPEAN COMMISSION, http://ec.europa.eu/justice/data-protection/
(accessed on Oct. 17, 2016).
63
Id.
64
Id.
65
Id.
66
Risk Map, TAYLORWESSING, http://www.taylorwessing.com/globaldatahub/risk_map.html (last visited
Apr. 1, 2015).

11

unlikely that comprehensive legislation will be developed and implemented in the near
future that fully addresses privacy and innovation concerns. Until the law catches up,
policymakers should not forget that individual and societal adaptation may play an
important role in shaping norms to regulate wearable technology.
Best practices for companies entering the wearable technology realm remain the
same as in any social media platform. The collection and use of consumers data must be
clear, accurately described, and reflected in a companys privacy policy. Any sensitive
information, including PII, financial, and precise location data should only be used after
obtaining express affirmative consent from users. Appropriate security measures must be
provided to protect sensitive information. But most importantly, and obviously, a company
should comply with its own privacy policies. Failure to do so may result in substantial
FTC sanctions.
IV.

Employment Considerations

Analogous to the issues raised by the advent of smartphones, wearable technology

may be making its way into the workplace via employees personal use. In the context of
labor and employment, the overarching issue is privacy. Employees bringing their personal
wearables into the workplace may result in privacy breaches of confidential, sensitive
information, either in the form of company information, or sensitive information relating
to private conversations between employees.67 Given this, employers will need to address
if, when, and how they will accept wearables into their company.
Some specific issues that may arise in a workplace environment are an employee
using wearable technology to record private meetings or disciplinary actions, then using
the recording for bullying, blackmail or in legal proceedings, or employees using wearable
technology to view inappropriate content easily monitored on desktop computers.68
Moreover, employers are also interested in using wearable technology to monitor
employees' activities so that they can implement changes based on the employees
productivity and well-being. As wearable technology is able to collect some really personal
data, even outside of working hours, employers are bound by more stringent requirements.
The best practice, of course, is to obtain consent for the collection, use and disclosure of
personal data via wearables.69
Companies should establish clear procedures and policies regarding employees
use of technology in the workplace and consider revising their employment agreements to
reflect the same. While most employers currently have social media policies within their
current company manuals, the emergence of wearable technology may require employers

67

Bill Goodwin, Wearable Technology Creates New Privacy Issues for Employers,
COMPUTERWEEKLY.COM, (June 24, 2014, 10:30 AM),
http://www.computerweekly.com/news/2240223173/Wearable-technology-new-privacy-headaches-foremployers.
68
Id.
69
Jay Hancock, Workplace Wellness Programs Put Employee Privacy at Risk, CNN (Oct. 2, 2015,
12:37PM), http://cnn.it/1WL4GbZ.

12

to alter their policies.70 Wearable technology in the workplace may also require employers
to make amendments to employee manuals, employment agreements and require additional
training for human resources, supervisors, and employees.71
V.

Intellectual Property

While still in relative infancy, wearable technology may raise a number of

intellectual property (IP) challenges that may mirror those that came about with
smartphones and mobile technology. Similar to smartphones, wearables often involve
several components (an actual physical object, an app, and possibly downloadable
software) that may require different types of protection relating to a single saleable good.
As wearable technology provides opportunities for fashion and technology companies, it
is important for companies to consider protecting every aspect of their wearable technology
products, including the appearance, operation, and branding.
a.

Copyright

Copyright provides a powerful tool in the fashion industry for protecting fabric
designs and other types of protectable artistic expression. While copyright protects the
artistic elements of a product and not its functional elements, certain creative elements of
a product may warrant copyright protection as long as those creative elements are
conceptually separable from the whole product.72 With regards to wearable technology,
copyright may provide protection for the actual design of the product, jewelry, software,
and digital codes, depending on the device.
b.

Trademarks

Trademarks are perhaps the most widely used form of IP in the fashion industry.
Trademarks are words symbols, logos, or designs that serve as source identifiers, enabling
consumers to distinguish between goods and products of different companies in the
marketplace. Brand owners will want to make sure their trademarks are protected and used
correctly, particularly when collaborating and creating wearable products with technology
companies through various licensing arrangements.
But brands should also consider non-traditional methods of protecting trademark
rights such as product configuration, sounds, color, scent and motion marks. As mentioned
above, one wearable technology product may involve multiple dimensions in 3d, as an
app, or downloadable software. Trademark usage should remain consistent across the
board. But the wearable itself may benefit from trademark protection if it has a nonfunctional design. Furthermore, if the wearable emits a sound, a scent, or involves
movement (such as a digital icon), it can benefit from trademark protection as well.

70

The Wearable Technology Revolution: Is your Workplace Prepared?, TAYLORWESSING, (June 2013),
http://www.taylorwessing.com/globaldatahub/article_wearable_technology_revolution.html.
71
Id.
72
See Kieselstein-Cord v. Accessories by Pearl. Inc., 632 F.2d 989, (2d Cir. 1980).

13

Fashion brands entering the wearable tech field should therefore critically assess
all aspects of the product to determine whether some independent features of the product
could benefit from trademark protection, either immediately or through demonstrated
brand recognition in the marketplace.
c.

Patents

Patents protect the novel and unique features of an invention. The invention can be
a tool, a design, or a technological innovation. In the wearables market, patents play a
critical role in obtaining a leading edge over competitive products. Given the abundance
of health related wearables, sensor technology is of particular importance. For example,
activity trackers that measure blood-flow and optical sensors are currently some of the most
sought after features of wearable technology. These may be incorporated into bracelets,
necklaces, watches, ear buds, and glasses.
Recently, Adidas and its partner, body sensor manufacturer Textronics, were
named defendants in a patent infringement lawsuit filed by a different body sensor products
manufacturer Sarvint - over the use of sensor technology employed in Adidas line of
miCoach training shirts. The shirt features special fibers designed to collect the wearers
vital signs, and it is connected to a smartphone app.73
Developing a patent in house, or partnering up with a company developing
proprietary sensory technology becomes a critical component of a successful wearable.
Although a full discussion of patent licensing pitfalls is beyond the scope of this White
Paper, fashion brands should carefully negotiate patent licensing terms such as
compensation, scope, territory and duration in order to maximize return on investment.

VI.

Product Liability

While the marriage of fashion and wearable technology brings a host of new
privacy and intellectual property concerns, it also increases a brands exposure to product
liability. Wearables can result in bodily injury, not only due to their inherent physical
proximity to the wearer, but also because of their ability to distract the wearer from daily
activities such as walking, or driving. In other words the product itself can cause injury,
or the wearer can cause injury to third parties as a result of wearing the product.
Recently, the U.S. leader in the activity tracking market, Fitbit, recalled its activity
tracker, the Force Wristband, after consumers complained of skin irritation and allergic
reactions due to the nickel in its stainless steel bands.74Even small-scale injuries, such as

73
Zainab Hussain, Weary of Wearabales: IP, Privacy and Data Security Concerns, LAW PRACTICE TODAY
(Jan. 14, 2016), http://www.lawpracticetoday.org/article/weary-of-wearables-ip-privacy-and-data-securityconcerns/.
74
Mark Rogowsky, Fitbit Force Recall Is Bad News For The Company And
Wearable Tech, But Is It Necessary?, FORBES, (Mar. 13, 2014, 8:45 AM),

14

the case of Fitbit, can lead to substantial liability exposure. Some have argued that
additional concerns may arise with respect to the long term health effects of wearables,
such as radiation or other currently unknown risks.75 There are, however, few studies
available that show the potential long-term health effects of wearables.
Another concern relating to wearables, is the wearers carelessness as a result of
operating or manipulating the wearable. A wearers absorption with the functionality of
the wearable can cause a consumer to become oblivious to his surroundings to the
detriment of third parties. Consider a driver toying with her wearable gadget while driving
on a highway. This can result in significant injuries to not only the wearer, but third parties
in the wearers careless path. 76 Lawmakers in New York, Maryland, West Virginia,
Delaware, Illinois and Missouri have already introduced bills proposing a complete ban on
wearable technology while operating a vehicle.77
Data generated by wearables can also constitute valuable electronic evidence. In a
Pennsylvania criminal case at the trial-level, Commonwealth v. Risley, police questioned a
woman's rape claim when her Fitbit contradicted her statement to the police.78 In another
case involving a wearable device, attorneys obtained data from a wearable technology,
called Strava, to show the defendant had been speeding and was responsible for the
accident in controversy.79
As with any good product liability strategy, brand owners should ensure senior
management quality assurance, provide documentation procedures, and emphasize the
importance of product safety warnings. Many wearable technology devices do not have a
screen or interface, creating the issue of where companies should place product disclaimer
and safety warnings so they are accessible and available to consumers. As with FTC
guidelines regarding notice and choice in privacy and data collection, companies may
consider disclaimers and warnings at point of sale, during product set up, or provide links
to online tutorials regarding possible health concerns and proper use of the device.80
Companies should also disclose the product makeup of the wearable and ensure it was
adequately tested by trained staff and experts prior to public consumption.

http://www.forbes.com/sites/markrogowsky/2014/03/13/fitbit-force-recall-is-badfor-the-company-and-wearable-tech-but-is-it-necessary/.
75
Rong Wang, PhD, Wireless Radiation from Google Glass: Is There a Risk?, PONG, (June 4, 2013),
http://www.pongcase.com/blog/wireless-radiation-google-glass-risk.
76
Roland Mathys, Legal Challenges of Wearable Computing, (2014), at 23,
http://www.swlegal.ch/getdoc/5ff2741a-6e1e-4108-99c7-8dc1566f21b2/140731_Roland-Mathys_PaperLegal-Challenges-of-Wea.aspx.
77
Wrong Glasses for Drivers, THE TIMES TRIBUNE, (Mar. 12, 2014), http://thetimestribune.com/opinion/wrong-glasses-for-drivers-1.1648895.
78
Commonwealth v. Risley, Criminal Docket: CP-36-CR-0002937-2015 (Lancaster Cty., Pa.).
79
John G. Browning, Legally Speaking: When All Else Fails, Blame Social Media, SE. TEX. REC. (July 6,
2012, 8:37 AM), http://bit.ly/25iuilK.
80
Will Fitbit Rashes Lead to Warning Labels on all Wearable Technologies?, TECH NEWS, (Oct. 20, 2014),
http://agbeat.com/tech-news/will-fitbit-rashes-lead-warning-labels-wearable-technologies/.

15