Surfing the Third Wave of Computing

Contracting with eObjects

Kayleen Manwaring

UNSW Law, UNSW Australia, Kensington, Australia

1 RESEARCH PROBLEM

During the last two decades, a “third wave of

computing” has emerged: a move from a model of

accessing the Internet and other internetworks almost

exclusively via a desktop computer to alternative

forms of distributed information technologies, such as

smartphones, wearable computers, and sensors and

microprocessors embedded in everyday objects.

Mobile commerce is now part of the mainstream of

e-commerce technologies, with applications for mobile

entertainment, retail shopping, banking, stock trading

and gambling all well-established and on the rise. The

widespread use of computing devices embedded into

buildings and everyday objects has also moved from

the vision of a few computer scientists to a (partial)

reality, with current applications for home automation,

energy management, healthcare and environmental

monitoring, just to name a few. Current terminology

used to describe the third wave such as ubiquitous or

pervasive computing, ambient intelligence, or the

Internet of Things, all have important limitations.

Therefore, I have adopted the term “eObjects” for the

central technological element of third wave computing.

In summary, an eObject is an object that is not

inherently computerised, but into which has been

embedded one or more computer processors with data-

collection, data-handling and data communication

capabilities.

These technological developments have resulted

in the creation of new things to be bought and sold,

new activities for business and consumers to engage

in, and new kinds of commercial relationships

between consumers and businesses. My research

project will examine how legal rules around the

formation of contract and the enforceability of

onerous contract clauses operate in the face of this

socio-technological change. It is widely recognised

that there are distinct legal problems which may

arise in relation to socio-technological change. If the

development and use of these new forms of

information technology give rise to inconsistencies,

unmet expectations and unpredictable outcomes in

the law, this may well lead to substantial problems

for product and service providers, as well as

individual consumers using or interacting with the

technologies. I intend to consider these issues in the

context of Australian law and will also be guided by

what is happening in international jurisdictions.

2 OUTLINE OF OBJECTIVES

My aim is to examine whether aspects of contract law

in Australia, specifically as it applies to the use of

eObjects in consumer transactions, appropriately

protects the interests of consumers, innovators and

business. I will do this in large part by examining

legal problems that have arisen or are likely to arise in

Australia and the international jurisdictions in regard

to a context which involves eObjects and relationships

among participants governed by contract. I will also

evaluate the current operation of the law against the

goals of contract and consumer law in Australia.

In particular, my objective is to answer the

following questions:

1) in what ways will socio-technological change

brought about by eObjects create legal problems in

Australia, in the areas of formation of contract and

enforcement of onerous contract clauses?

2) if there are significant contract law problems that

do arise out of the use of eObjects, what reforms are

required in order to appropriately protect the

interests of product and service providers and

consumers, in light of the goals of contract and

consumer protection law in Australia?

3 STATE OF THE ART

3.1 The Technology under

Examination

"In order to craft appropriate laws, both the

technology and its uses must be well understood.”

(Reed, 2007)

Manwaring, K.

Surﬁng the Third Wave of Computing - Contracting with eObjects.

In Doctoral Consortium (DCIT 2016), pages 3-13

For the last two decades, scholars, journalist and

IT consultants, have been presaging what has been

labelled the “third wave of computing”, “a new age

of embedded, intuitive computing in which our

homes, cars, stores, farms, and factories have the

ability to think, sense, understand, and respond to

our needs” (Forbath, 2013). The first wave

comprised the introduction of mainframe computing,

with a “many people to one machine” model. The

second wave of personal computing saw the

development of one-to-one relationships between

people and their computers. The third wave

envisages a move from a model of people accessing

internetworked computing services almost

exclusively via a personal desktop computer to a

“many people to many machines” model.

Advocates of the third wave predict the large scale

development and use of alternative forms of

distributed information technologies, of which early

examples include smartphones, wearable computers

and sensors and microprocessors embedded in

everyday objects. Examples of concrete applications

currently in commercial use or in advanced stages of

development include:

 electricity smart grid technology;

 wearable electronics and other consumer

devices;

 healthcare products;

 home and industrial automation applications;

 traffic applications;

 smart and driverless cars and trucks; and

 environmental monitoring.

To develop more meaningful scholarship in this

particular area of technology regulation, there needs

to be a good understanding of the character of the

technology at issue. It is particularly important to

clarify exactly what technology is being discussed.

Koops, in his analysis of mapping research spaces

within the discipline of technology regulation,

argues that “[t]he questions raised by a certain

development in technology depend very much on the

character and level of abstraction of the technology

at issue” (the “technology type”) (Koops, 2010).

Koops explains that questions of regulation will

differ depending on whether a researcher is

examining a concrete application of a certain

technology, such as an Internet-enabled fitness

tracker, to more abstract areas such as information

technology, or even technology, itself.

However, despite the fact that it is easy to point

to current (and potential) examples, it is difficult to

arrive at an accurate scope definition of this “new

model” of computing. The terminology used by

researchers, industry participants and governments is

not fixed, and a number of different terms are

frequently used, in particular ubiquitous computing,

pervasive computing, ambient intelligence, and the

Internet of Things (IoT). In the literature, sometimes

these terms are used interchangeably, other times

they are used in different but overlapping contexts

and with wider or narrower scopes of meaning. This

profusion and confusion of terms may be due to a

number of reasons. Terminologies and descriptions

in the literature appear to be contingent on a number

of factors: they vary over geographical locations,

and with individual researchers, and they change

over time. In particular, terminology has often varied

depending on the particular entity funding the

research being discussed. Also, whereas many areas

of information technology research have a

significant and defined technical problem or

problems to be solved, the research arenas of

ubiquitous computing, pervasive computing and

ambient intelligence have a far greater focus on the

human (rather than technical) outcomes.

Therefore, as a first step, I have completed a

paper that outlines the literature on historical and

current definitions of particular areas of the new

model and extracts its key dimensions (Manwaring

and Clarke, 2015). The paper discusses in particular

the dominant terms ubiquitous computing, pervasive

computing, ambient intelligence, and the Internet of

Things in order to provide a clear statement of the

terminology and concepts behind the new model.

After tracing the history of these terms and their

various uses, the paper goes on to extract and

analyse the key attributes of the terms. This paper

proposes a new term, “eObject”, for the central

technological element of the new model, and defines

that term as:

An eObject is an object that is not inherently

computerised, but into which has been embedded

one or more computer processors with data-

collection, data-handling and data communication

capabilities.

The core attributes of an eObject are elaborated

in Table 1. These attributes are intended to be

definitional: that is, a devices or system that is

missing one or more of them is not considered an

“eObject”.

However, while this definition outlines the core

attributes of the new model, by itself it does not give

a full picture of the types of technologies that the

literature discusses.

Therefore, the paper goes onto outline a research

framework of interactions and common (rather

than core) attributes to assist in exploring legal

problems that might arise out of socio-technological

DCIT 2016 - Doctoral Consortium on Internet of Things

Table 1: An eObject’s Core Attributes.

Attribute Description

Object Is a physical object, which may be

natural or an artefact, of any size,

and inert or living

Computer Contains one or more general-

purpose programmable computers,

sufficiently miniaturised

Embedded One or more computers are

physically embedded in the object

(as distinct from being socially,

culturally or metaphorically

embedded)

Data-Collection Contains one or more sensors that

can collect or generate data.

Note that sensors are a core

attribute, while actuators are not:

an ability to act in a physical

manner on the environment is

common in eObjects, but not

essential (other than the ability to

communicate data).

Data-Handling Includes a capability to process

data.

Data

Communication

Can communicate with other

nodes inside the same object, or

with other objects

change brought about by eObjects. Figure 1 sets out

a graphical representation of these interactions,

which are further elaborated in Manwaring and

Clarke, 2015.

Figure 1: Interactions between eObjects.

A summary of the common attributes is set out in

Table 2 the Appendix. Even though they fall outside

of the core definition, they are included within the

framework because their existence, inter-

relationships, and even the frequency with which

they appear can lead to more specific and detailed

analysis of problems that might arise in relation to

an eObject.

This technical framework will be supported by a

conceptual framework, outlined below. Both will be

used to assist in analysing the impact of socio-

technological change brought about by eObjects, and

the legal problems which may arise.

3.2 Legal Problems Already Identified

Academic commentators have already undertaken

some preliminary analysis of legal problems arising

out of aspects of eObjects in overseas jurisdictions,

but the Australian conversation has been quite

limited. The United States conversation began

predominantly with an article in 2005 by Kang and

Cuff (law and architect professors respectively), who

outlined a ground-breaking vision of a mixed

real/virtual shopping centre created by the use of

existing and future eObjects technologies (Kang and

Cuff, 2005). For example, translating this to an

Australian experience, a shopping centre customer

may enter a shopping centre, go into a department

store, look at the child restraints on display, take out

her smartphone to look at product review and price

comparison sites and then buy a restraint from a

completely different store with a mobile shopping

application. Her smartphone then alerts her to a

shopping task he has forgotten: consequently she

checks the shopping list created by her smart fridge

and diverts to the supermarket to buy milk and

bread. Her incidental movement through the

shopping centre may lead to the collection of

information about which store windows she looks

into, and her use of e-loyalty cards to the collation of

information about her pink iced donut consumption.

Kang and Cuff were interested in examining the

effect of the use of “pervasive computing” (a subset

of eObjects) on the laws affecting the public sphere.

They concluded that this vision of a shopping centre

with embedded and mobile information technologies

produced a significant need for legal development in

areas as diverse as the law of contract, property law,

privacy and telecommunications regulation.

Brenner also undertook a significant analysis of

pervasive technology in 2006, but confined it to the

criminal law.

Following on from the Kang and Cuff

collaboration, Fairfield undertook a preliminary

examination of the divergences between “online and

offline law”, and the difficulties this might raise

when virtual experiences are mixed with real life

experiences: for example, mobile phone

applications which display images and videos when

they are pointed at real objects, such as museum

exhibits (Fairfield, 2012). Fairfield raised a concern

that the US courts, when faced with lawsuits

eObjects

Living things

Other

eObjects

–

temporary/

permanent

Other

computers

Physical

world

Surﬁng the Third Wave of Computing - Contracting with eObjects

involving mixed reality applications, may have a

tendency to apply intellectual property laws

(particularly copyright) which might limit further re-

use of purchased items, rather than consider “real

world” implications under contract law and property

law. Interestingly, Kang and Cuff identified

somewhat the opposite problem: they were

concerned that their hypothetical shopping centre

owners would assert their private property rights

over Internet connectivity ports within the shopping

centre to shape and control information flowing to

their customers.

In these general preliminary investigations,

contract law emerged as an important theme. Peppet

went further and narrowed his focus to the impact of

eObjects on the law of consumer contracts. He

provided a preliminary analysis of some of the

possible effects of eObjects on contract law and the

impact of underlying technological conditions on

doctrine. In particular, he argued that the greater

availability of information that consumers have

about products and onerous contract terms means

that US courts should be less likely to hold a

contract unenforceable on the grounds of

unconscionability and related “unfairness” grounds

(Peppet, 2012).

However, most of the legal literature which

exists discussing eObjects concentrates on the

privacy and data protection implications of the ready

availability of this potentially vast store of data

about individuals, their lives, and their preferences:

and in particular the inadequacy of existing laws to

protect individuals. However, the legal conflicts

which may arise are unlikely to be confined to

commercial and government dealings with data

concerning the activities and information of

individuals. For example, Walker Smith contends

that the increasing amount of information available

to sellers about the way their customers use their

products is set to increase product liability claims as

the nature of foreseeability of harm changes (Smith,

2013-2014). Werbach argues that many legal rules,

in areas as diverse as evidence law, corporate

disclosure regulation, civil and criminal procedure

and patents law are problematic. The problems arise

because these rules are based on assumptions about

information scarcity and abilities to control

information flow may no longer hold true in

societies where sensors which collect, process and

communicate large amounts of data are prevalent

(Werbach, 2007).

The key research question posed in my

introduction was whether or not socio-technological

change created by the new model of eObjects is

likely to create new legal problems. In particular, I

would like to investigate the effect on the law that

applies when consumers enter into contracts

mediated by eObjects. The existing US literature on

eObjects points, in a very preliminary way, to

implications particularly in the area of contract law

and consumer protection law, which have not yet

been examined for their potential effect in Australia.

For example, what issues might arise around

enforceability of contracts formed through

interaction with “invisible” devices? When can a

movement through an embedded space constitute an

intent to create legal relations? How does

differential access to information affect a

consumer’s rights in a transaction? These are just

some of the questions that remain to be answered in

this research space.

Some initial guidance from scholars

concentrating on privacy may be useful. Such

scholars have spent some considerable time

analysing, in the context of privacy policies, the

problems with adequate notice that eObjects might

bring about. Related issues might well arise in

relation to notice required for the formation of

contract and reasonable notice required for the

enforcement of onerous contractual terms.

Legal problems arising out of the increasing

practice of entering into contracts online, using a

conventional computer, have attracted some

scholarly attention. Kim in a recent book discusses

in detail doctrinal problems that have arisen due to

the US courts’ desire to enforce shrinkwrap,

clickwrap and browsewrap contracts (Kim, 2013).

She argues that both form and substance of wrap

contracts are fundamentally different from paper

contracts, and that in their struggle with these

differences, the courts have actively distorted

contractual doctrine. For example, Kim argues that

courts have construed assent to contractual terms

from mere notice in ways that are problematic and

inconsistent, resulting in judicial decisions that

“make it difficult to predict what may constitute

adequate notice in any given case or what level of

action constitutes a manifestation of consent”.

She concludes that “while a specialized body of

law is unnecessary, doctrinal adjustments should be

made to address the problem of wrap contracts”.

Other commentators, such as Moringiellio and

Reynolds, would not necessarily agree with Kim’s

arguments around distortion, but instead believe that

traditional doctrines of contract law are sufficiently

adaptable to cope with new technologies

(Moringiello and Reynolds, 2013). However, even

they acknowledge that when faced with new

DCIT 2016 - Doctoral Consortium on Internet of Things

technologies such as smartphones, that “different

factual scenarios might well require some creative

judicial application of settled law to the new facts”.

Whether you would assess the issue as merely a

need for “creative judicial application”, or support

Kim’s idea that this creative application does

amount to a substantial “distortion of doctrine”, it is

clear that this may well lead to legal problems of

uncertainty, whether strict legal uncertainty or

practical uncertainty.

What I wish to examine in this dissertation is

whether the possibility of contractual disputes

surrounding the use of eObjects may lead to

additional uncertainty or other legal problems. For

example, to add to the existing uncertainty

surrounding conventional online contracting, the

mechanisms by which users manifest, or by which

courts assume manifest, assent to contractual terms,

may well change with the advent of eObjects. For

example, one of the common attributes of eObjects

is an increasing emphasis on implicit human-

computer interaction (iHCI). In an eObjects world,

a desktop computer, smartphone and a sock may all

contain computing power, but a consumer interacts

with each of these devices in different ways. If the

devices are used to mediate contracts with

consumers, their ability to “deliver” text, and

therefore contractual terms, is also fundamentally

different. Admittedly, a “tap” on a smartphone icon

is not very dissimilar to a “click” on an “I agree”

button, and therefore it is arguable existing doctrine

is easily applied in that context. However, even

supporters of traditional doctrine recognise that a

failure to adapt the presentation of contractual terms

to a smaller screen may affect whether there is

reasonable notice.

And, once we move to eObjects without a

conventional screen, the interaction becomes even

more different, sufficiently to raise questions about

assent to contractual terms. Is a wave, or a blink, or

merely walking into a room, the same as a click on a

hypertext link? When might a contract formed with

an iHCI interface be unconscionable? Will

electronic signatures legislation have to change to

incorporate gesture-based contracting, or will

agreement by conduct be sufficient for all purposes?

It may be easy to conclude that existing doctrine

governing contractual agreement by conduct will be

sufficient to deal with the simple question of

whether some form of contract has been formed.

However, the question still remains as to what terms

are included part of that contract. As Kim points

out, one of the outcomes of widely available e-

commerce has been the increased length and

complexity of terms contained in consumer

contracts. Retailers, who in the offline world would

not traditionally subject their customers to signing a

paper contract at all, and therefore only expecting to

enforce minimal conditions around price and returns,

are taking advantage of the electronic form to

deliver many pages of terms and conditions. These

terms and conditions also tend to include provisions

unrelated to the main bargain (what Kim calls

“crook terms”), such as consent to collect a

consumer’s information and sell it to third parties.

For example, if a consumer goes into Myer and buys

a dress, the consumer’s contractual obligations are

limited to payment of the tag price. Myer is also

subject to statutory warranties under the Australian

Consumer Law. However, if a consumer buys the

same dress via the Myer website, she is subject to

fully four pages of terms (over 3500 words). These

terms include a clause allowing third party

advertisers to access your IP address, and also to

track pages to which you subsequently navigated.

eObjects are contemplated with an ability to

deliver text which is limited compared to

conventional desktop technology. How, then, will

reasonable notice of onerous terms be delivered to

consumers? For example, for a consumer using

Internet-connected spectacles, how will these four

pages be represented to her/him? The problem of a

small screen has already been recognised by scholars

discussing wrap contracts, but must this problem is

likely to be multiplied in the context of wearable

electronics. Considering the function of Internet-

connected spectacles and where they are likely to be

used, that is, on the move and in public places, the

likelihood that consumers will be able to adequately

read consumer terms is not high. It is already clear

that most people spend little to no time reading

consumer terms and conditions. The increased

difficulty of accessibility and legibility will most

likely not mean a reduction in the number of

transactions, merely a reduction in the already low

number of people who actually know what bargain

they have made. How will judges respond to this

issue, if at all? And if judges will not respond,

should the legislature?

However, there may exist opportunities arising

out of eObjects to improve the consumer contracting

experience. For example, the portability of certain

consumer eObjects may actually result in better

informed consumers. As discussed above, Peppet

argues that greater accessibility to review sites with

smartphones by consumers in brick-and-mortar

stores means that US courts should be less likely to

hold a contract unenforceable on the grounds of

Surﬁng the Third Wave of Computing - Contracting with eObjects

unconscionability and related “unfairness” grounds.

There may be other forms of technology available

that might be used to assist in notification of onerous

terms: the question is of course whether suppliers

would be willing to use these or would need to be

coerced by some form of regulation.

4 CONCEPTUAL FRAMEWORK

4.1 Law and Socio-technological

Change

The current state of technology limits, in practice,

what actions we can perform, what objects we can

create, and what relationships we can form. It is thus

common for technological change to impact the law,

which limits what actions we may perform, what

objects we may create and use, and what

relationships will be recognized. (Bennett Moses,

2007).

Where technological change gives us the ability

to perform new actions, manufacture new objects, or

form new relationships, the question must inevitably

be asked: should these new actions, products and/or

relationships be permitted, prohibited, encouraged,

or limited in some way? And if so, how?

This question of course presupposes the widely-

held belief that in many cases there are legitimate

reasons for law or, more broadly, regulation, to change

as technology, or the socio-technological landscape,

changes. Brownsword has characterised this issue as

the challenge of “regulatory connection”: the

discrepancy between existing law and other regulation

created to order a previous socio-technological

environment, which then require “reconnection” with

new actions, products and relationships made possible

by new technologies (Brownsword, 2008). This issue

has also been characterised as a concern that law

inherently has problems “keeping up” with

technological changes, sometimes referred to as the

“pacing problem” (Marchant et al., 2011).

The need to address regulatory connection, or

disconnection, in a timely manner is drawn out by

examination of the potential effects of what has been

labelled the “Collingridge dilemma”, or as

Collingridge himself described it, the “dilemma of

social control” (Collingridge, 1980). This is the

recognition that potential benefits of new technology

are widely accepted before enough is known about

future consequences or potential risks to regulate the

technology from the outset, while by the time

enough is known about the consequences and

possible harms to enable regulating it, vested

interests in the success of technology are so

entrenched that any regulatory effort will be

expensive, dramatic and resisted.

Some contemplated eObjects are as yet purely

speculative technologies, or are at such an early

stage of development that they have not progressed

past the experimental phase into marketable

products. However, the possible negative results of

the Collingridge dilemma may dictate a need to

respond to technologies which are not yet in

existence or in commercial use. Once a technology

has been fully developed, there is usually a strong

incentive to resist any regulatory change, due mainly

to the expense of changing technological design.

Therefore, in some cases it may make sense to

implement new regulation before the technology is

fully developed and/or the risks are fully known.

However, just because a technology is new, or

significantly changed, does not by itself mean that

its applications operate outside of the scope of

existing law. A new technology, especially in the

ICT industry, is rarely completed unregulated by

existing law: a new product, for example, is still in

many cases subject to existing tortious principles

and product liability regulation, those selling it

subject to consumer protection and competition law,

and creators able to protect it under existing

intellectual property legislation. Even with the very

real problems envisaged by the Collingridge

dilemma, there is no need to “overreact” to

technological change with unnecessary regulation.

The action of a thief who steals a driverless smart

car is still a breach of the NSW Crimes Act 1900.

What may be subject to legal uncertainty, at least, is

who is liable in an accident causing injury or

property damage: the thief, the owner, the

manufacturer, the programmer of faulty software?

In my dissertation, I propose to begin with the

conceptual framework proposed by Bennett Moses

in 2007. Bennett Moses classifies problems that

might arise out of a failure of regulatory connection

in the context of technological change into four

categories (and associated subcategories):

(1) there may be a need to create special rules

designed to ban, restrict, encourage, or co-ordinate

use of a new technology; [“new harms or benefits”]

(2) there may be a need to clarify how existing laws

apply to new artifacts, activities, and relationships;

[“uncertainty”]

(3) the scope of existing legal rules may be

inappropriate in the context of new technologies;

[“under- or over-inclusiveness”] and

DCIT 2016 - Doctoral Consortium on Internet of Things

(4) existing legal rules may become obsolete.

[“obsolescence”] (Bennett Moses, 2007)

Bennett Moses’ approach is helpful particularly

because it also recognises that some changes in

technology will not give rise to regulatory

disconnection, and even those which do to some

extent will not create problems in all of the above

four categories. This approach also actively

discourages any assumptions that just because

technology a technology is new, it automatically

generates uncertainty or a need for new rules.

These categories of legal problems are not the

only ones that may arise. In my work to date, I have

identified another category: that of “practical

uncertainty”. Practical uncertainty, unlike “legal”

uncertainty as defined by Bennett Moses, arises

where the “correct” interpretation of a legal rule

might well be arrived at by judges in time, but the

delay in itself may cause problems for business and

consumers, such as an initial surge in litigation or

insurance premiums. There may also be other

categories to be discovered.

4.2 Innovation

So how do we discover whether one or more of these

types of problems arises in the case of particular

eObjects? How do we best approach a review of

existing regulation to examine if there is a need for

new legal rules to manage new risks or to encourage

new behaviours, or there exist legal rules which are

obsolete, under or over-inclusive, or are uncertain?

Koops, in his 2010 attempt to map the field of

technology regulation research, placed particular

importance on the dimension of “innovation” and

the fact that non-innovative technologies are more

likely to operate within existing regulatory

frameworks than “radically new technologies”

(Koops, 2010). However, he also explains that

“innovation” is not confined to technologies that did

not exist previously, but also to technologies which

may have existed for some time, but some form of

change in the socio-technological environment has

led to them becoming far more widely used. He

argues that “[i]t is far from rare that a change in the

scale of a technology gives rise to significant

regulatory questions”.

It is useful then, to examine the innovations

contained within or around eObjects to see where

problems falling into one or more of Bennett Moses’

categories will most likely arise. The innovations

will be identified with the assistance of the technical

framework already developed. Although some of

the technology seen in eObjects, such as Internet

connectivity, may not be “radically new”, when

compared with other innovations such as cloning or

nanotechnology, a search for innovation should not be

narrowly circumscribed to mere technical advances.

For example, it is part of the very nature of eObjects

that many more “things” will be connected to the

Internet than previously: a change in scale this

significant is likely to cause social change, which in

itself may give rise to legal problems.

5 METHODOLOGY

The methodology adopted includes:

 a literature review of the technical literature;

and

 a doctrinal and comparative research

methodology which analyses Australian law and

the law in certain other foreign jurisdictions who

use eObjects in commercial activities.

5.1 Doctrinal Methodology

Doctrinal research has been described as “the

systematic exposition, analysis and critical evaluation

of legal rules and their relationships”. It requires a

study of existing and future developments in

legislation, case law and academic commentary.

Doctrinal research methodology is arguably well-suited

to examining problems around law and emerging

technologies. For example, new technological

developments may throw up novel questions of liability

for harm caused. In this instance, good doctrinal

research will anticipate the types of question that might

arise in litigation and suggest how they ought to be

decided. It may also suggest the need for law reform to

the extent that the problems arising are not amenable to

judicial resolution.

Doctrinal research traditionally examines the

systematisation and classification of existing law,

but it can be argued that good (or at least interesting)

doctrinal research should go further also aspire to

“push … through settled legal questions to address

questions that are complex and unresolved in the

legal system” (Roux, 2014). To answer my

question regarding the pacing problem, I will be

examining the operation of case law and legislation

to seek for areas where the law, in its operation on

commercial situations involving the use of eObjects,

is inconsistent, incoherent, unpredictable, or is

otherwise unlikely to meet criteria for an appropriate

balancing of commercial and community interests. I

want to look at the way that when faced with new

situations are rules acting the way they should.

Surﬁng the Third Wave of Computing - Contracting with eObjects

I am seeking to examine “how [the law] ought to

be understood and how it might be improved”, in

situations where it impacts on the commercial use of

eObjects. Therefore, my ultimate aim in this

research is not only “clearly and succinctly to

express the norms (principles, standards and rules)

that have been established” (Roux, 2014) in relation

to eObjects but then “creatively to develop the

implications of settled law for unresolved

questions”, assuming of course in my examination

of established law that such unresolved questions do

actually exist.

However, academic, legislative and judicial

discussion of the law in this area in Australia is quite

sparse. As with many emerging technologies, there

are few specific primary law sources relating to

eObjects, and little domestic academic commentary

on which to draw. So to confine myself to

examining only the Australian doctrinal landscape

runs the risk of missing important issues. Therefore,

in order to make a rigorous assessment of it and

where the law is failing in relation to the commercial

use of eObjects it is sensible to examine law and

commentary relating to issues arising in other

jurisdictions outside of Australia.

5.2 Comparative Elements

In order to examine foreign law appropriately, my

doctrinal methodology includes elements of

comparative law methodology. The examination of

foreign law has become a common feature of

doctrinal research in the last forty years. I am not

concerned with the comparison of other jurisdictions

for their own sake: my examination of other

jurisdictions is unabashedly utilitarian and intended

primarily to provide more material for my analysis

of what, if any, legal problems are likely to be of

concern in Australia in relation to eObjects (Van

Hoecke and Warrington, 1998). Narrowly focussed

comparative law research of this type has recently

been recognised as a subset or type of doctrinal

research. Therefore, my approach to gathering

material and the analysis of that material will be

doctrinal in nature. Of course, the nature of the legal

problems in each of the jurisdictions examined is

likely to be different, considering the differences in

language, intent and values of the underlying law of

each system.

I will use my examination of foreign law to

answer two main questions:

 What issues have already arisen in relation to

eObjects?

 How have those issues been previously been

resolved by the legislature, judiciary and

government agencies?

The results will assist in informing my analysis

of a third question: what solutions might be suitable

for Australian law? Attempting to gain these types

of insights is seen as a traditional and useful way to

use comparative law “simply because the different

systems of the world can offer a greater variety of

solutions than could be thought up in a lifetime by

even the most imaginative jurist who was corralled

in his own system” (Eberle, 2011). This is not

confined to an examination of legislation and cases

on the books: in examining commentary sources in

other jurisdictions, I can benefit from the different

experiences and “future-gazing” skills of other

academics outside of the Australian sphere.

5.2.1 How will I use a Comparative

Methodology?

Comparative law research can be defined as “the

science or practice of identifying, explaining, or

using the similarities and differences between two or

more legal systems or their constituent parts” (Clark,

1998). Therefore, the first step I will need to take in

my comparative research is to look at “one mass of

legal data in relationship to another and then

assess… how the two lumps of legal data are similar

and how they are different” (Eberle, 2011). Once I

have completed this key act of explicit comparison, I

will then need to apply critical reasoning in order to

answer the question “[w]hat do the divergences and

similarities reveal?”, in relation to my particular

problems (Eberle, 2011).

However, it has been argued that the amount of

comparison required in each case falls along a

spectrum, rather than defined as an absolute. My own

approach will be to use comparative law methodology

on a relatively narrow scale, rather than being

“thoroughly comparative” (Reitz, 1998). Following

Reitz’s suggested method, I intend to engage in explicit

comparison but “solely as a frame to make clear ... the

reasons why a domestic lawyer ought to be interested

in the example of a foreign legal system”, rather than a

comparison on a larger scale of the “general patterns

and themes” of the differing systems.

The type of comparative methodology elements I

intend using will follow my doctrinal methodology

relatively closely: I intend to “focus… on drawing

out the lessons that foreign legal systems have to teach”

from a doctrinal perspective, using the comparative

method outlined by Reitz (Reitz, 1998). Aside from the

requirement of explicit comparison, much of the

DCIT 2016 - Doctoral Consortium on Internet of Things

method he outlined is analogous to methods employed

in standard non-comparative doctrinal research, such as

a requirement to focus on all sources of law, such as

statute, cases, and academic commentary. However, I

will have to put into play distinctly comparativist skills

when examining, as all comparative studies must do,

the similarities and differences between compared

jurisdictions.

Considering my object in the comparison, to

discover new issues and new solutions in relation to

the applicability of law in Australia to eObjects I

will also need to engage (at least at a basic level)

with the “long-running debate about whether legal

transplants are possible given that the law is deeply

embedded in the political, social and economic

conditions of a particular jurisdiction” (Dias-Abey,

2012). Technological conditions must also be added

to this list, as differences in these may also have an

effect on the utility of legal transplants. Many

information technologies, eObjects included, are not

the same worldwide: they differ across jurisdictions,

across industries, and across organisations.

5.2.2 Choice of Jurisdiction

Which jurisdiction or jurisdictions, then, will be the

most likely to produce the breadth of material I am

seeking within the scope of this dissertation? The

United States offers an attractive target, not only due

to language and the common law system, but also

because of its large population and significant

existing and projected corporate and consumer

investment in these types of technologies. In relation

to corporate activity, the United States is the base for

companies who have made significant investments

in the hardware and software underlying eObjects,

or are acquirers of such companies: such as Apple,

IBM, General Electric, Intel, Cisco, Ford, Broadcom

and Google. For example, IBM has recently

announced plans to invest USD3 billion over the

next four years in its new Internet of Things business

unit. In 2013 and 2014, Google spent approximately

USD5 billion acquiring Nest (home automation),

Waze (traffic applications) and Dropcam (home

security monitoring). On the consumer side,

American ownership of smartphones has almost

doubled since 2011, and as of October 2014, 64% of

American adults owned one. A recent consumer

survey (albeit with a small sample size) in the US on

projected consumer adoption of IoT devices

indicated that 30% of consumers currently own or

plan to buy an in-home IoT device (such as

networked thermostats, vacuum cleaners and

refrigerators) by the end of 2016, and the survey

predicts that ownership of wearable IoT devices

(such as fitness trackers and smart watches) will

reach a similar number within the same timeframe.

This amount of corporate and consumer investment

in eObjects indicates that the likelihood of issues

relating to coherence, certainty and applicability of

contract and consumer protection law to eObjects

being canvassed at a judicial, legislative, and/or

academic level is high.

However, many of the technologies under

discussion are very new, and therefore it is likely

that comparative examination of only one

jurisdiction will be insufficient to significantly assist

in answering the research questions posed. It is

therefore important that a number of jurisdictions be

examined in order to uncover sufficient evidence for

problems that might arise out of socio-technological

change, to which judges, parliaments and other rule-

makers should be expected to respond in Australia.

There are a number of countries in Asia and

Europe with significant public and private

investment in eObjects, such as South Korea,

Germany, Japan and Denmark, and increasingly

China, but lack of familiarity with the native

language of these countries makes them less suitable

subjects for my comparative research. Some

assistance may be found in examination of European

Union regulation, which is published in English, and

may well contain regulatory reactions to

developments in European countries with

noteworthy investment in eObjects. Other likely

subjects will be major English language jurisdictions

such as Canada, the United Kingdom, Hong Kong,

Singapore and India, particularly as investment in

these areas expands.

6 EXPECTED OUTCOME

The categorisation of legal problems is important

because it assists in ensuring that any legal problems

identified are specific and defined, and reduce the

likelihood that there is an overreaction to socio-

technological change. I will use Bennett Moses’

categorisation of legal problems outlined above

(along with my own refinements) to assist in a legal

analysis of the socio-technological change brought

about by the introduction of and growth in scale of

the use of eObjects. I will do so by discussing some

of the critical innovations contained in eObjects,

based on the technical framework already developed.

Those innovations will be examined to identify the

new things, activities and/or relationships that may be

created.

Surﬁng the Third Wave of Computing - Contracting with eObjects

After examining the circumstances in which the

current law currently fails to address issues raised by

the use of eObjects in commercial transactions, I will

then proceed to the next part of the analysis. This will

then constitute an attempt to answer the question: if

there are significant contract law problems that do arise

out of the use of eObjects, what reforms are required in

order to appropriately protect the interests of product

and service providers and consumers, in light of the

goals of contract and consumer protection law?

Firstly, I will need to adequately identify and

describe the goals of contract law and consumer

protection law that are relevant to the use of eObjects.

This will require a critical examination of contract

and consumer law theory. Then, I will need to choose

a framework in order to answer the reform question.

Regulatory theory appears to me to be the most

fruitful theoretical framework in which to work.

However, I do not intend to look at regulatory theory

in general, but rather to concentrate on the branch of

regulatory theory which concentrates on regulation of

technology. I will also investigate whether or not it

makes sense to narrow the focus even more: that is,

to concentrate on regulatory theory which concerns

itself with information technology rather than

technology in general, or even that which

concentrates on cyberspace.

I will examine the practicality and utility of

particular regulatory theories when applied to a real-

world challenge: the emergence of a new form of

technology. I intend to develop a set of principles

on which any reform proposals should be based, a

model that ensures that consumer rights, incentives

for innovators to develop new products and

incentives for businesses to distribute these products

are appropriately protected, and any conflicts

between those rights are appropriately resolved.

This model will be based on the insights derived

from my examination of regulatory theory, but also

on the results of my comparative analysis of

Australian and international jurisdictions and what is

currently working (and not working) in the real

world. One challenge to be addressed in the

development of this model is the criteria by which

“appropriate protection” is to be judged.

7 STAGE OF THE RESEARCH

I have completed the literature review of the

technical literature, and constructed a technical

framework from which to examine the technologies

at issue. This has been published as an article

(Manwaring and Clarke, 2015), and will form the

basis for Chapter 2 of the dissertation. I have

adopted and elaborated upon a conceptual

framework through which to view the research

questions. A second article is in progress, where I

am using the conceptual and technical frameworks

together to uncover legal problems which may arise

out of the use of eObjects in a variety of situations.

REFERENCES

Bennett Moses, L. 2007. Why Have a Theory of Law and

Technological Change? Minnesota Journal of Law,

Science & Technology, 8, 589-606.

Brownsword, R. 2008. Rights, Regulation, and the

Technological Revolution, Oxford; New York, Oxford

University Press.

Clark, D. S. 1998. Comparative Law Methods in the

United States. Roger Williams University Law Review,

16, 134-138.

Collingridge, D. 1980. The Social Control of Technology,

London, Pinter.

Dias-Abey, M. 2012. Balancing Employee Protection with

Promoting Business Productivity During

Organisational Restructuring. Masters Thesis, Unsw.

Eberle, E. J. 2011. The Methodology of Comparative Law.

Roger Williams University Law Review, 16, 51-72.

Fairfield, J. 2012. Mixed Reality: How the Laws of

Virtual Worlds Govern Everyday Life. Berkeley

Technology Law Journal, 27, 55-116.

Forbath, T. 2013. The Third Wave of Computing.

Fortune.Com, 3 October 2013.

Kang, J. & Cuff, D. 2005. Pervasive Computing:

Embedding the Public Sphere. Washington and Lee

Law Review, 62, 93-146.

Kim, N. S. 2013. Wrap Contracts: Foundations and

Ramifications, Oxford, Oxford University Press.

Koops, B.-J. 2010. Ten Dimensions of Technology

Regulation. Finding Your Bearings Inthe Research Space

of an Emerging Discipline. In: Goodwin, M., Koops, B.-

J. & Leenes, R. (Eds.) Dimensions of Technology

Regulation. Nijmegen: Wolf Legal Publishing.

Manwaring, K. & Clarke, R. 2015. Surfing the Third Wave of

Computing: A Framework For Research Into Networked

Eobjects. Computer Law & Security Review, 31.

Marchant, G. E., Allenby, B. R. & Herkert, J. R. (Eds.) 2011.

The Growing Gap Between Emerging Technologies and

Legal-Ethical Oversight: the Pacing Problem: Springer.

Moringiello, J. M. & Reynolds, W. L. 2013. From Lord

Coke to Internet Privacy: the Past, Present, and Future

of the Law of Electronic Contracting. Maryland Law

Review, 72, 452-500.

Peppet, S. R. 2012. Freedom of Contract In an Augmented

Reality: The Case of Consumer Contracts. Ucla Law

Review, 59, 676-745.

Reed, C. 2007. Taking Sides On Technology Neutrality.

Scripted, 4, 263.

Reitz, J. C. 1998. How to Do Comparative Law. American

Journal of Comparative Law, 46, 617-636.

DCIT 2016 - Doctoral Consortium on Internet of Things

Roux, T. 2014. Judging the Quality of Legal Research: A

Qualified Response to the Demand For Greater

Methodological Rigour. Legal Education Review, 24,

173-200.

Smith, B. W. 2013-2014. Proximity-Driven Liability.

Georgetown Law Journal, 102 1777-1820.

Van Hoecke, M. & Warrington, M. 1998. Legal Cultures,

Legal Paradigms and Legal Doctrine: towards A New

Model For Comparative Law. Iclq, 47, 495-536.

Werbach, K. 2007. Sensors and Sensibilities. Cardozo L.

Rev., 28, 2321-2372.

Zweigert, K. & Kotz, H. 1998. Introduction to

Comparative Law, Oxford, Clarendon Press.

APPENDIX

Table 2: Common attributes of eObjects.

Attributes Limits

Active capacity An eObject may be able to perform acts which have an impact on the physical world, through the

use of different types of actuators (devices which move things)

Adaptability An eObject may adapt or be responsive to context (eg physical environment) and/or an individual

(often referred to as “context-awareness”)

Addressability An eObject may have, at any given moment, an address that is unique, and that is at least

potentially knowable (eg IP address, cell address, geo-coordinates)

Associability with

living beings

An eObject may have degrees of personal association (either physical, emotional or based on a

legal relationship) with particular individual humans and/or groups. These can range from family

cars, to phones, to jewellery, to chips implanted in the human body. Associations may also exist

with animals or plants (eg tracking movement or propagation of endangered populations).

Autonomy An eObject may be fully autonomous, or have some degree of autonomy from human users or

systems of which they form a part. The decision-making capabilities of eObjects may exhibit

varying degrees of sophistication.

Dependency An eObject may depend on remote services and/or infrastructure

Geo-Locatability Any particular eObject, or all eObjects in a system, may be locatable in universal physical space

or some bounded physical space

Human computer

interaction (HCI)

An eObject, or a system that has eObjects as elements, may be “used” by obvious or explicit

interaction (eg mobile phones), or by implicit human computer interaction (iHCI) where the

eObject interface is unobtrusive or invisible

Identifiability An eObject may have one or more identifiers each of which may be unique, and each of which

may be at least potentially knowable (eg International Mobile Equipment Identity (IMEI) number

for mobile phone handsets, International Mobile Subscriber Identity (IMSI) number for GSM

SIM cards, Media Access Control (MAC) address for a network interface card)

Network

Locatability

Any particular eObject, or all eObjects in a system, may be locatable in universal network space

or some bounded network space (although they can appear and disappear intermittently)

Mobility An eObject may be operational while moving within a physical space, when used by a person on

the move or acting autonomously.

A system that has eObjects as elements may maintain services to people while they are on the

move, or autonomous operations, within some bounded physical space, by utilising multiple

eObjects or successive eObjects encountered by any of its elements while on the move.

Operational,

economic and

social impact

An eObject’s features and performance may be beneficial to some parties and detrimental to

others

Portability An eObject may be fixed in place, somewhat limited in movement by cables and connectors (ie

tethered) or fully portable. Note that this is a subtly different concept from that of mobility: a

mobile eObject can operate while on the move, whereas one which is merely portable can be

moved from one physical place to another, but cannot operate while in transit.

Prevalence A category of eObjects, or a system that uses eObjects to perform some function, may be in many

places (“pervasive”), or in all places (“ubiquitous”)

Use pattern A person may have, or may use, one particular eObject or multiple eObjects, and may do so only

once, with varying frequencies, or continuously.

Volatility Due to its form factor, an eObject may have variable connectivity, restricted energy, limited

storage capacity and slow or intermittent processing capabilities

Vulnerability An eObject may be more or less vulnerable to security breaches, theft, and physical damage or

destruction

Surﬁng the Third Wave of Computing - Contracting with eObjects