This is the question being litigated in a high-stakes cyber insurance coverage dispute between global snack food giant, Mondelez International, and its insurer, Zurich American Insurance Company, in Illinois state court. “NotPetya” was a 2017 ransomware attack in which infectious code impacted a number of global corporations, including Mondelez, encrypting computer hard drives and demanding payment for access to the data. Mondelez claims that it suffered damage to its hardware and operation software systems valued in excess of $100 million as a result of the attack. In early 2018, the U.S. and its allies publicly attributed the cyberattack to the Russian government. Russia denied the allegations. Modelez submitted an insurance claim to Zurich under an all-risk property insurance policy. Mondelez alleges that Zurich denied the claim based on a policy exclusion that excluded coverage for “loss or damage directly or indirectly caused by or resulting from … [a] hostile or warlike action … by any government or sovereign power … or agent or authority [thereof].” In October 2018, Mondelez filed suit against Zurich in Cook County, Illinois to determine whether the exclusion applies. According to the docket the case is currently pending, and working its way through the discovery process.
This case is being closely watched by corporations and insurers alike as it may have broad implications on cyberattack coverage for both traditional and specialized cyber insurance policies that contain the same or similar exclusions. What evidence will the insurer present to seek to prove that this war exclusion applies?
Pieces by Brian Corcoran on Lawfare (here) and Jeff Sistrunk on Law360 (here) each contain in-depth discussions of the case and its potential implications on the cyber insurance market. The docket for the case can be found here (select the Law Division and enter Case Number 2018-L-011008).
Posted by R. Brandon McCullough attorney at Houston Harbaugh, P.C. 401 Liberty Avenue, Pittsburgh, PA 15222. Brandon concentrates his practice primarily in the areas of insurance coverage and bad faith litigation, complex commercial and business litigation and appellate litigation. Please contact Mr. McCullough at 412-288-4008 or firstname.lastname@example.org any questions pertaining to this article or any other legal matters.
From Law.Com and its Legaltech news former Microsoft CTO Adrian Clarke (Evident Proof) reports on the technology of Blockchain and its purported major security benefits for the supply ecosystem. “The blockchain is a transaction ledger that is uneditable and virtually unhackable. New information can be written onto the blockchain, but the previous information (stored in what are known as blocks) can’t be adjusted. Every single block (or piece of data) added to the chain is given an encrypted identity. Cryptography effectively connects the contents of each newly added block with each block that came before it. So any change to the contents of a previous block on a chain would invalidate the data in all blocks after it.” Clarke’s report here is perhaps some comfort for an exponentially growing sector of the world wide economy which relies on supply chain management on a massive scale. See his piece in Law Journal Newsletters at http://tinyurl.com/y7mqfnem
Attorneys Bill Cheng and John Frank Weaver at McLane Middleton, P.A. in New Hampshire posted this piece in the NH Business Review at: http://tinyurl.com/yblh6nqp regarding the interaction between Blockchain and Bitcoin and how the GDPR for example will struggle to deal with these technologies, given the protections that GDPR attempts to provide to data owners so that they can control their personal information and data. Blockchain, particularly in conjunction with Bitcoin as the currency for a Blockchain secured transaction will prove a challenge to the GDPR rules. CTOs, Industrial Engineers and Supply Chain designers have big decisions to make in the years to come regarding security and whether Blockchain is the answer to some data protection issues. Photo courtesy of Law.Com.
Posted by Henry M. Sneath, EsquireCo-Chair Litigation Practice Group and Chair of the IP Practice Group: Houston Harbaugh, P.C.401 Liberty Avenue, Pittsburgh, Pa. 15222. Sneath is also an Adjunct Professor of Law teaching two courses; Trade Secret Law and the Law of Trademarks and Unfair Competition at Duquesne University School of Law.Please contact Mr. Sneath at 412-288-4013 email@example.com.
As the Internet of Things (IoT) develops, there is an increasing need to “sense” changes in the atmospherics which surround semiconductors. In other words, the working chips must get smarter and smarter and have feel! Some of that AI feel in chips is being supplied by sensing chips – the layered structure of wafers of semiconductor material which can “sense” changes in the environment it is measuring or into which it is placed. Gas sensors are particularly important and patent applications for these devices are on the upswing internationally, with Sony and Samsung leading the way. See Relecura article at http://tinyurl.com/ybrojuq2
Edaphic Scientific describes a gas sensor’s performance as follows: “Semiconductor gas sensors rely on a gas coming into contact with a metal oxide surface and then undergoing either oxidation or reduction. The absorption or desorption of the gas on the metal oxide changes either the conductivity or resistivity from a known baseline value. This change in conductivity or resistivity can be measured with electronic circuitry. Usually the change in conductivity or resistivity is a linear and proportional relationship with gas concentration. Therefore, a simple calibration equation can be established between resistivity/conductivity change and gas concentration.” http://tinyurl.com/y6ufz7vx
The IoT relies on smarter and smarter technology as it governs many things around us. Products will have this smarter and smarter technology and converting “sensing” into electronic circuitry will likely have a positive impact on performance, but will present new challenges as products fail and cause damage to person or property. How deep a dive will be required in products liability litigation for example when a “sensor chip” fails to sense. Sensor chips have been around for a while, but they are becoming tremendously sophisticated and integral to the virtual world in which we operate.
Is Quantum Computing the next Tech frontier? Collaboration between researchers at Google and UC Santa Barbara are working on super computing qubits which might lead to “quantum supremacy” in the computing world. One chief researcher describes it as the desire to “perform an algorithm or computation that couldn’t be done otherwise.” Where classical computers function in two states, zeroes and ones – qubits perform in three states with the extra state being a “superposition” of both zero and one “raising exponentially the number of possible states a quantum system can explore.” For more details seePhys.ORG