A formula to avoid Industry 4.0 disrupting your business

However their profile has changed as the region’s advanced manufacturing capabilities attract world-class companies. These industries include materials technology, aerospace, the creative and digital industries, food production and biomedical – healthcare technology. We are now looking forwards to the next generation of businesses. More specifically, to the widespread changes Industry 4.0 is likely to impose on the manufacturing sector.

If you’re not 100% clear on exactly what Industry 4.0 is, it is the name that’s been given to describe the way advanced automation and data utilisation is developing within the manufacturing world. It reflects experts’ belief that we are currently experiencing the fourth industrial revolution.

Many technological advancements  – including the ‘Internet of Things’, ‘Big Data’, virtual technologies and artificial intelligence – sit underneath the Industry 4.0 umbrella. However, one of the main opportunities for the manufacturing industry lies in the potential to create a ‘smart factory’. Which is based upon successful cyber-physical cooperation between humans and technology.

It appears that these technological advancements will impact positively on profitability and efficiencies. It is also apparent that as our lawyers become more involved. There are 4 key legal issues manufacturing (if not all) businesses will need to consider before they embrace the benefits of Industry 4.0:

  1. Review liability clauses within your commercial contracts

The way businesses interact – particularly if they are planning to share data and/or confidential information – will change. As a result you will need to look closely at the way you engage with both your partners and customers. As well as reviewing any agreements involving liability clauses so they reflect the changing nature of those relationships.

You will be required to agree exactly who within your supply chain will be liable for faulty goods. This includes in what circumstances they have failed to deliver those goods as agreed. You may also want to consider putting new contracts in place in case your systems fail or suffer an attack.

We also recommend redrafting your standard terms and conditions to reflect your operational changes and acknowledge the technologies you’ve adopted.

  1. Review your use of data

Since the new data protection regulations (GDPR) came into force on the 25th of May this year compliance has become a priority for every type of business.

‘Big data’ (the output of machines connected to each other, linked to the Internet of Things and stored in cloud-based systems) will be fundamental to Industry 4.0. This means that the collection, interpretation and dissemination of that data will present a raft of new legal challenges. We suggest you take advice to make sure you comply with any regulatory developments while continuing to take full advantage of the benefits of the new technology you’ve implemented.

  1. Review your contracts and terms of employment

Any new technologies you adopt could have implications under current employment law as their implementation is likely to lead to wholesale reorganisation or even redundancies.  Consulting with your employees and their representatives at the earliest opportunity is vital.

From a more positive perspective, Industry 4.0 looks likely to lead to more flexible working models. For example creating new roles that may require upskilling or retraining for certain employees. Again, the sooner you can explain these changes to your employees, the easier the transition will be.

  1. Review your Intellectual Property rights

Industry 4.0 will dramatically impact the use and protection of intellectual property (IP). As the traditional means of protection are likely to be substantially different, staying on top of these changes is paramount to ensure you maintain ownership of your IP and prevent competitors taking commercial advantage of your R&D, ideas and business processes.

Similarly as Industry 4.0 takes hold we expect a sharp increase in disputes around who owns/can use particular IP rights. Having access to experienced lawyers in resolving potential disputes to avoid possible disruptions are a priority.

For more information and articles about the manufacturing sector, click here.

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