By Paul Trudgill, partner in Keebles’ corporate and commercial department 

The sweeping changes resulting from Industry 4.0 – which is bringing a wealth of technological advancements to multinationals and large manufacturers – will affect all businesses responsible for production processes.   


While many developments including the ‘Internet of Things’, ‘Big Data’, virtual technologies and artificial intelligence sit underneath the Industry 4.0 umbrella, a key opportunity lies in the potential to create a ‘smart factory’ based upon successful cyber-physical cooperation between humans and technology.


Wide-ranging benefits include less downtime and increased profitability and efficiency along with the agility to adapt to wider developments – all of which can enhance competitive advantage.


Creating more flexible, efficient and productive supply chains is a key component of Industry 4.0 – an outcome which relies on remaining compliant to prevent hefty penalties and fines impacting on the bottom line.


Below are four key legal issues for the manufacturing sector to address before reaping the rewards of the Fourth Industrial Revolution:   


  1. Review liability clauses within commercial contracts


The way businesses interact – particularly if they are planning to share data and/or confidential information – will change. It is therefore important to closely examine how you engage with your partners and customers and review any agreements involving liability clauses so they reflect the changing nature of those relationships. 


Agree exactly who within your supply chain will be liable for faulty goods – and 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 use of data


Since the new data protection regulations (GDPR) came into force on May 25th, 2018, compliance has taken on an unprecedented importance.   


‘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 the collection; interpretation and dissemination of that data will present a raft of new legal challenges. We suggest you take advice to ensure compliance with any regulatory developments while continuing to take full advantage of the benefits of the new technology you’ve implemented.


  1. Review 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.


On a more positive perspective, Industry 4.0 looks likely to lead to more flexible working models and create 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 Intellectual Property rights


Industry 4.0 will dramatically impact how intellectual property (IP) is utilised and protected. 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. 


As Industry 4.0 takes hold we also expect a sharp increase in disputes around who owns/can use particular intellectual property rights. Having access to lawyers who are experienced in resolving potential disputes to avoid potential disruptions to your business is a priority.