United States: Arnold & Porter Discusses New California Law On Security For Internet-Connected Devices

Last Updated: October 18 2018
Article by Ronald D. Lee, Joseph Farris, Michael Samuels and Amanda J. Sherwood

California has passed the first state law imposing security requirements on devices in the Internet of Things (IoT). On September 28, 2018, California Governor Jerry Brown signed into law the nearly identical Senate Bill 327 and Assembly Bill 1906,1 which require manufacturers of Internet-connected devices that are sold or offered for sale in California to equip them with "reasonable security features."2 Manufacturers of IoT devices are now on the clock to make the necessary changes to comply with the law before it becomes effective on January 1, 2020. While the law does provide some specific guidance for manufacturers—including new rules regarding default passwords and user authentication—it also imposes open-ended requirements that will require manufacturers to grapple with its interpretation when designing product security features.

What Products Does the Law Cover and to Whom Does It Apply?

The new law covers "connected devices," which it defines as any device or "other physical object" that is "capable of connecting to the Internet, directly or indirectly, and that is assigned an Internet Protocol (IP) address or Bluetooth address."3 As such the law is broad in scope, and appears likely to cover practically any conceivable IoT product, including computers, tablets, smartphones, smart watches, thermostats, cars, televisions, security cameras, toys, digital storage devices, kitchen appliances (such as refrigerators), and more. If such a device is capable of connecting to the Internet via an IP or Bluetooth address, it will probably be subject to the law, although the statute leaves open the possibility that certain devices that are never actually assigned IP or Bluetooth addresses may be excluded in some circumstances.

What's not a "connected device"? The term is defined as a device or physical object, which, on its face, would seemingly exclude software or applications that are not distributed as part of a device. The law further specifically excludes "unaffiliated third-party software or applications that a user chooses to add to a connected device."4

It is also notable that the law applies only to "manufacturers," which the law defines as businesses (and other legal "persons") that manufacture products that are sold or offered for sale in California, or contract with another business to manufacture such products on their behalf.5 By contrast, the law excludes a business that contracts with another business "only to purchase and brand a connected device."6 Thus, if a business purchases a white-label device from a manufacturer and re-brands it, it may not be subject to the law, although answering that question may require a close examination of the nature of the purchasing relationship.

What Reasonable Security Features Are Required?

The core requirement of the new law is that manufacturers of "connected devices" must equip each device with a "reasonable security feature or features."7 A reasonable security feature is broadly defined as one that is:

  • Appropriate to the nature and function of the device,
  • Appropriate to the information it may collect, contain or transmit, and
  • Designed to protect the device and any information contained therein from unauthorized access, destruction, use, modification, or disclosure.8

The law goes on to describe two specific approaches that are a starting point from which manufacturers may work toward meeting this "reasonable security feature" requirement. The title states that if a connected device is equipped with a means for authentication outside a local area network, it "shall be deemed a reasonable security feature" if either of two requirements is met:

  • The connected device is equipped with a preprogrammed password unique to each device manufactured.9
  • The device contains a security feature that requires a user to generate a new means of authentication before access is granted to the device for the first time.10

The law does not specify particular methods of preprogramming passwords or generating means of authentication, nor does it specify robustness, such as minimum complexity requirements, for passwords.

While the exact requirements are not clear under the statutory language, this section appears to require manufacturers to meet the three broad standards defining a "reasonable security feature" generally. If a manufacturer implements either of the listed two specific requirements regarding preprogrammed passwords and authentication, that may be sufficient in some cases to demonstrate that the device has "reasonable security features." That said, compliance with either of the two requirements does not, in of itself, necessarily mean that a manufacturer has met the three broader standards under the first part of the "reasonable security features" requirement, and they should not be viewed as a "safe harbor."

For example, if the preprogrammed unique passwords provided by a manufacturer under the first approach are inappropriate to the nature and function of the device or the type of information the device may collect, or otherwise not reasonably designed to protect the device and any information it contains, then that manufacturer might still fail to meet the standards of a "reasonable security feature." To illustrate one possible scenario, consider a manufacturer of a smart coffee makers that are designed to have access to credit card information for purchasing refill coffee pods. If the manufacturer assigned each device a "unique" preprogrammed password but the passwords were too obvious and predictable (e.g., "password" or "house"), the manufacturer might not be deemed to have included reasonable security features.

Retroactivity and Exemptions

The title goes into effect on January 1, 2020,11 but its retroactive scope is unclear. While there can be no doubt that the law applies to devices that are manufactured on or after the effective date, it does not specify whether it applies to devices that have been manufactured and are already in inventory or in the distribution chain as of that date. However, nothing in the law suggests that it would go so far as to require devices that have already been sold to consumers as of the effective date to be recalled.

The law contains two limited exemptions to its broad application, applying to federally regulated devices and devices related to health care. First, the title has an exemption for connected devices "the functionality of which is subject to security requirements under federal law, regulations, or guidance promulgated by a federal agency pursuant to its regulatory enforcement authority."12 Second, the title also has an even more specific exemption for a "covered entity, provider of health care, business associate, health care service plan, contractor, employer, or any other person subject to the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) . . . or the Confidentiality of Medical Information Act" that is not "subject to this title with respect to any activity regulated by those acts."13 While the federal exemption seems to exempt all devices that have their own security requirements promulgated by a federal agency, the health/medical exemption indicates certain types of entities are exempt from these requirements insofar as their activities are regulated by the enumerated Acts.

Implications and Questions Going Forward

As the first state bill expressly regulating and imposing specific requirements relating to IoT devices, the only certainty when it comes to its enforcement is its uncertainty. Additionally, the law does not create a private right of action for consumers and further exclusively limits the right to enforce it to the "Attorney General, a city attorney, a county counsel, or a district attorney," so it remains to be seen how the government will seek to enforce the law. Manufacturers may be left to develop their own practices to comply with the law without the benefit of regulatory interpretation or guidance.

Also uncertain is the interplay between this bill and existing California laws already providing similar or related security protections for its citizens. For example, California already requires that businesses employ "reasonable security procedures and practices" to protect the personal information of California residents that the businesses own, license or maintain from "unauthorized access, destruction, use, modification, or disclosure."14 Additionally, the recent California Consumer Privacy Act (see our October 3, 2018 Advisory detailing the CCPA) provides for a private right of action in connection with the unauthorized access and exfiltration, theft, or disclosure of a consumer's nonencrypted or nonredacted personal information that results from a business's failure to implement reasonable security procedures and practices to safeguard that data.15 This new law may intersect with, and in some ways piggy-back off. these other laws, and manufacturers should consider how their compliance efforts may also overlap.


1. See Senate Bill 327 and Assembly Bill 1906. These bills will be codified at Title 1.81.26 of Part 4 of Division 3 of the California Civil Code.

2. See 1798.91.05(b); 1798.91.04(a).

3. 1798.91.05(b).

4. 1798.91.06(a).

5. 1798.91.05(c).

6. Id.

7. 1798.91.04(a).

8. 1798.91.04(a). "(U)nauthorized access, destruction, use, modification, or disclosure" is defined as actions that are "not authorized by the consumer." 1798.91.05(e). "Consumer" is not defined in the title.

9. 1798.91.04(b)(1).

10. 1798.91.04(b)(2). The bill defines authentication as "a method of verifying the authority of a user, process, or device to access resources in an information system."

11. 1798.91.06(i).

12. 1798.91.06(d).

13. 1798.91.06(h).

14. 1798.81.5(b).

15. 1798.150(a).

Originally published by The CLS Blue Sky Blog.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions