You are previewing premium content. Cloud computing raises risk of patent litigation, attorney says
Unresolved legal questions surround cloud services
To continue reading, Out of all the security concerns related to cloud computing, here's one you might not have considered: Customers using cloud services may put themselves at risk of patent litigation.
It may be a small risk, but it is another issue to consider when assessing the pros and cons of cloud computing, says Nolan Goldberg, a patent and trade secret litigation attorney for Proskauer Rose LLP in New York.
FAQ: Cloud computing, demystified
"I think IP [intellectual property] is going to be a huge barrier to cloud adoption," Goldberg said. "Using a cloud service creates a different risk profile than using a non-cloud version of the same service."
The court system is clogged with frivolous patent lawsuits, and customers who use a service that allegedly infringes on a patent could be sued through no fault of their own, said Goldberg, a speaker at the Interop Las Vegas trade show. Plaintiffs often go after customers in cases where a physical product may violate a patent, and the same litigation method could be used in the world of cloud computing, he said.
"One model of enforcing patents says I can go after the manufacturer, but once I do I'm done because then all his sales are licensed," Goldberg said. "But if I keep going after all his customers, I can keep going forever and the customer is really not in the best position to fight back. So it creates increased risk."
Goldberg used an example from the manufacturing world to explain how a customer could infringe a patent simply by using a product.
"If the supplier makes a machine capable of performing A, B, and C, but the customer is the one who actually presses the button that performs the steps, in that case the customer could be the direct infringer, and the supplier might be the indirect infringer," Goldberg said.
In the retail world, it's relatively easy to assess the risk because the manufacturing process and supply chain contain defined steps that customers and vendors may have visibility into, Goldberg said. But users of a cloud service hosted by Amazon, Google or some start-up may have little information on what happens under the covers.
"It's a bit of lack of transparency that makes it harder to investigate and assess your risk," he said.
How much actual risk is there? Is it enough to make cloud computing unappealing? Those questions, like many in the legal world, are tough to answer.
"There's an external exposure that you wouldn't have, but for the fact that you're using a cloud service," Goldberg said. "So is it a half a percent increase in risk? Is it a 2% increase in risk? And do we care, right? But, when you're figuring out the bigger question -- why do I move to the cloud? -- if the answer is to save money, are you really going to save money if you're trading a little bit of IT costs up front for a huge legal bill down the road?"
Legal risks go beyond potentially frivolous patent lawsuits, Goldberg said. He is advising his clients not to put the most sensitive information, or a company's "crown jewels" into a cloud service because of the risk of exposing trade secrets. Customers have to evaluate the importance of data on an application-by-application basis, examine potential ramifications, the "increased risk profile" of the cloud, and "measure that against your benefits and make an informed decision," he said.
-
Network World, Inc
The Connected Enterprise