2009 top underreported technology stories:6. Lawyers begin trolling in the cloud
You know a technology is gaining traction when the lawyers figure there's money to be made. And although it is early days, cloud computing is beginning to generate lawsuits, settlements, and hassles. We've seen three potentially significant ones this fall, and more may well follow.
One of the few, and perhaps the first, cloud-related lawsuit to be resolved was a patent infringement case brought by an inventor named Mitchell Prust, who claimed he patented cloud storage and cloud computing technology that allows users to access computer applications through Web browsers.
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Prust sued, and in November he won a federal court judgment against NetMass, an online storage vendor. Three of his patents were the basis of his claim against NetMass and a still-pending lawsuit against Apple, according to Prust's attorney. The broadest of his patents was filed back in 2000 and is titled "Method and system for seamless access to a remote storage server utilizing multiple access interfaces executing on the remote server." (His patents are U.S. Patent 6,714,968, 6,735,623, and 6,952,724. If you're interested, you can look them up at the Patent Office Web site.)
Weeks before the Prust/NetMass settlement was announced, Sidekick users, angry over a weekend-long outage in October, filed two suits in federal court in Northern California. Each action alleged negligence and false claims on the part of Microsoft and T-Mobile, although it appears that users' data was eventually recovered. "T-Mobile and Microsoft promised to safeguard the most important data their customers possess and then apparently failed to follow even the most basic data-protection principles. What they did is unthinkable in this day and age," said attorney Jay Edelson, who represents one of the plaintiffs.
The legal action this fall may well be harbingers of litigation yet to come. "There's a big rush to adopt the newest and most cost-efficient tech model, but there are some fundamental business and legal issues that will first need to be addressed," says Daren Orzechowski, an attorney specializing in intellectual property issues at the law firm of White & Case.
Legal issues, such as security -- Amazon.com's EC2 has already been breached -- privacy protection, and service levels are not unique to the cloud, Orzechowski says. Indeed, there's no reason why cloud providers couldn't offer service-level agreements similar to those in traditional computing, he adds. Did T-Mobile really guarantee 24/7 access to data, or did customers just assume that? The courts will decide.
"[Intellectual property] is always a fertile ground for litigation. As companies connect legacy systems into the new cloud platforms, are they complying with existing intellectual property arrangements, licenses, and laws?" asks Orzechowski. In the case of NetMass, apparently not.
And as vendors rush to offer cloud-spaced solutions, earthbound issues such as compliance with layers of state, federal, and international bodies will need to be addressed.
It's not at all clear that cloud computing is any more likely to result in litigation than other technologies. But because it is so new, the legal bugs will have to be driven out as adoption becomes more common.