Category Archives: Data Breach Prevention

The CrowdStrike® Global Tech Outage

Posted on October 8, 2024 by | Comments Off on The CrowdStrike® Global Tech Outage

The Future of Cybersecurity, IT Blackouts and Related AI Legal Issues

On Friday July 19, 2024, CrowdStrike® Holdings, one of the largest cybersecurity technology companies in the world, announced that a faulty software update caused a global computer outage which ultimately disrupted many important aspects of a modern data-driven world. Airlines were forced to ground flights, banks were forced to postpone transactions, hospitals and 911 centers were forced to postpone emergency situations, courts were forced to close, and many global businesses and governments that rely on cloud-based CrowdStrike® as their cybersecurity provider were forced to limit operations. Because CrowdStrike’s AI-Native programs require very deep and privileged access into its customers’ IT systems, it can create a huge impact in an AI and data driven world, if there is a failure, as here, with a code error in a software update.

According to its website, CrowdStrike® is used by 43 of 50 U.S. states, 298 of the Fortune 500 companies, 8 of the top financial services firms, 7 out of the top 10 manufacturers, 6 out of the top 10 healthcare providers, and 8 out of the top 10 technology firms. Thankfully, CrowdSrike’s CEO George Kurtz, announced via X (formerly known as Twitter) that the outage was not caused by any security breach or cyberattack and reiterated that the customers of CrowdStrike® were protected. A failure such as this is known as a single-point failure in the IT industry, or otherwise an error in a single part of a system that creates a technical issue across many industries, and across various functions/communications of networks. The single-point failure is a real-world example of the initiation of a generative AI (dubbed AI-Native by CrowdStrike®) and data-internet-computer domino effect which can create an IT Blackout. IT experts are already raising questions about over-centralization and a lack of redundancy in the cybersecurity industry. CrowdStrike® uses AI powered behavioral analysis and machine analytics to predict user behavior and patterns, and to foresee and head off cyber threats.

Companies with contracts with CrowdStrike® will likely be exploring remedies if they suffered damages in real dollars or opportunity time. There may also be downstream commerce issues where certain institutions were impacted and their downstream customers were also impacted. There will be examinations of this event on both the technical and legal sides of the equation. It is not inconceivable that class actions may be filed even in anticipation of multiple claimants. Legal actions are expected against CrowdStrike® itself and claims up and down the commerce stream between clients, vendors and customers. Defendants may turn to their cybersecurity insurance carriers to attempt to navigate the complicated world of data privacy, cybersecurity, data breach and related insurance coverages. Many such policies for small businesses carry small liability limits and self-eroding policies brought down in limits by defense costs. These cyber data insurance policy endorsements or riders to such policies may get a workout. Investigating immediately the scope and availability of insurance coverage will be key assisting clients in litigation.*

A single-point failure poses many questions, even though a company like CrowdStrike® is essentially a back-office product designed to protect data from attack. It is not Google or Bing in the forefront, but a failure like this one, even in the background, can cause visible and front-end issues across a broad spectrum of programs (like Microsoft) and businesses, as this event demonstrates. CrowdStrike® is known as “endpoint security”, but it relies on what it calls AI-Native technology which can be placed into the forefront of the data world very quickly. Its products are heavily reliant on AI technology. How reliant are we on only a handful of cybersecurity cloud vendors? Should an event such as this cause regulators to closely monitor the vulnerability of this occurring again? Will future regulations lead to overregulation? But, most importantly, how prepared is your organization when a single failure causes a system to shut down entirely? What is the plan B? Additionally, a global IT outage potentially presents claims, litigation and lawsuits as organizations attempt to recoup losses that were suffered during the downtime. The actions your organization takes when an IT/cybersecurity outage occurs matter and every company needs to be aware of “Security Breach Notification Laws” in every state for their affected customers and clients. Litigation will certainly ensue from these types of events and businesses will need lawyers with knowledge of cybersecurity, data protection, artificial intelligence and the workings of the internet to protect their interests.

*Insurers are already estimating over $5 Billion in potential claims across multiple industries

CrowdStrike® is a federally registered trademark of CrowdStrike, Inc. a Delaware Corporation

CrowdStrike® | Cybersecurity | IT Blackouts | Generative AI Legal Issues | Cyber Insurance | Lawyers | Insurance

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Posted in Computer Technology, Cybersecurity, Data Breach Prevention, Data Breach Response, Data Security, Technology

Kaseya – Ransomware Attack Indictments; Podcast Update 12/5/21

Posted on December 5, 2021 by | Comments Off on Kaseya – Ransomware Attack Indictments; Podcast Update 12/5/21

The U.S. Justice Department and the FBI have announced indictments and money seizure in the ransomware attack perpetrated against software giant Kaseya. Hear the details in this 10 minute podcast.

https://anchor.fm/henry-sneath/episodes/Ransomware-Attack-on-Kaseya-12521-Update—Indictments-e1b9kga

Henry M. Sneath, Esq.
sneathhm@hh-law.com
412-288-4013

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Posted in Computer Technology, Cybersecurity, Data Breach Prevention, Data Breach Response, Data Security, Podcasts, Technology

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Kaseya VSA Supply-Chain Ransomware Attack Update 7-9-21 Podcast

Posted on July 9, 2021 by | Comments Off on Kaseya VSA Supply-Chain Ransomware Attack Update 7-9-21 Podcast

Here is the latest on the Kaseya VSA supply-chain ransomware attack which is interesting because there is now strong interplay between the United States government and companies like Kaseya given the national security implications of this type of ransomware attack. Please feel free to listen to this podcast with a brief update on the government involvement in the response to this ransomware attack and on the type of directives that the federal government is now giving out through government agencies like the US Cybersecurity and Infrastructure Security Agency (CISA) and the FBI. It was widely reported that the CEO of Kaseya on 1st notification of this ransomware attack contacted the federal government and spoke with national security officials at the White House and in the Department of Homeland Security. Obviously, every ransomware attack will not necessarily invoke this high-level government response, but more and more the government is involving itself in the investigation and response to these attacks which have been heavily linked to entities like REvil which is alleged to be based in Russia. Pres. Biden today allegedly called Pres. Putin to once again warn him regarding the cybersecurity attacks and he promised in the media that there would be a response from the United States. For more information on the specific CISA-FBI recommendations in response to the Kaseya VSA supply-chain ransomware attack see this link to the CISA website: https://us-cert.cisa.gov/ncas/current-activity/2021/07/04/cisa-fbi-guidance-msps-and-their-customers-affected-kaseya-vsa . See the link below for my short podcast with this update.

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Posted in Computer Technology, Cybersecurity, Data Breach Prevention, Data Breach Response, Data Security, Podcasts, Technology

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Kaseya VSA Server Ransomware Attack July 2021 – Lessons and Protocols for Dealing with Data Breach

Posted on July 6, 2021 by | Comments Off on Kaseya VSA Server Ransomware Attack July 2021 – Lessons and Protocols for Dealing with Data Breach

Podcast:

Blog:

See Kaseya CEO Video response presentation: https://www.kaseya.com/

See Updates Regarding VSA Security Incident Response: https://www.kaseya.com/potential-attack-on-kaseya-vsa/

In any Cyber incident, Data breach, hack or unwanted email intrusion, like the recent Kaseya attack, Incident Response (IR) time is of the essence. The Business and Cybersecurity Litigation lawyers at Houston Harbaugh, P.C., are here to assist in addressing the cybersecurity issues facing companies today. A comprehensive set of issues must be addressed to aid companies in minimizing the risk of cybersecurity breaches and to aid companies not if, but when, a data breach occurs. Ransomware, e-mail spoofing, text and phone call spoofing, e-mail intrusion, phishing and other schemes are running rampant in the business world. Sophisticated companies are falling prey to wire fraud schemes and ransom attacks at an alarming rate. These victims frequently turn to their insurance carriers but the maze of seeking insurer indemnity and defense for these matters is complex. Our firm can help work through that maze on both the technical side of investigation and on the mitigation side including the analysis of insurance coverage options. Our litigation lawyers are well equipped to handle IR and to tackle both the initiation of, or defense of, litigation related to these cyber security breaches and losses.

Data breaches are one of the biggest risks facing companies today. Companies must take action to prepare for the worst and to react quickly when it happens on both the technical side and the legal side. Our firm can cyber-counsel on corporate structure issues, insurance coverage, employment law, HIPAA and personal and health care data issues, and protection of data through proper technology infrastructure, technology rules and policies, corporate and employment policies and litigation if necessary. Cybersecurity takes a team to protect companies and their data through security programs, security awareness training, annual security audits and Incident Response. A cyber incident or intrusion which results in a breach of Personally Identifiable Information (PII) may trigger certain legal reporting requirements. See (Westlaw’s link): Pennsylvania Statutes 73-2301: Breach of Personal Information Notification Act. A link to the actual Pennsylvania statute can be found here. Here is a summary of the Pennsylvania Notification Act:

  • Enacted in 2006, Pennsylvania’s data breach notification law requires entities doing business in Pennsylvania that maintain, store, or manage computerized personal information of Pennsylvania residents to notify affected individuals of any data breach that results or could result in the unauthorized acquisition of their unencrypted and unredacted personal information.
  • Notice must be made without unreasonable delay
  • If more than 1,000 individuals must be notified, breached entities must also notify all consumer reporting agencies that compile and maintain files on consumers on a nationwide basis.
  • Breached third parties must notify relevant data owners or licensees.
  • Substitute notice is permitted in specific circumstances and notification may be delayed for law enforcement purposes.
  • Entities which maintain their own notification procedures as part of an information security policy consistent with state law are deemed to comply with the notification requirements of this law if the entity makes notifications in accordance with its policies.
  • Financial institutions compliant with the Federal Interagency Guidance Response Programs for Unauthorized Access to Consumer Information and Customer Notice are deemed to comply with this law, as are entities that comply with relevant notification requirements of federal regulators.

Our firm can help guide you through these reporting requirements but it is best to be prepared in advance. We can help you prepare and can refer you to good technical people for up front assistance.

Data breaches are the ultimate sneak attack. A company’s computer systems can be breached for weeks, months and even years without the breach being detected. Once detected, what action must the company take? A team that includes attorneys, company executives, law enforcement, IT and human resource management should be in place and prepared to address the various problems that arise. These problems include legal issues —regulatory compliance, protection of intellectual property, recovery of losses, and litigation —technical issues, notification issues, customer relations, public relations, and insurance issues.

Houston & Harbaugh cybersecurity attorneys have presented both regionally and nationally the following topics: “The Potential Consequences of Data Breach on Compromise or Infringement of Intellectual Property” and “Protecting Your Business in the Digital Age”. To read more about this topic and to see legal resources regarding Cybersecurity and Data Breach Response, please see this website’s Resource Library. 

Contact Our Pennsylvania Cybersecurity Attorneys Today: Houston Harbaugh can help your company take action to minimize the threat from data breaches and to guide you through IR. For immediate help on data breach or ransomware response, contact HH Shareholder Henry Sneath by email now to databreach@hh-law.com or call: 1-833-511-2243   

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Posted in Computer Technology, Cybersecurity, Data Breach Prevention, Data Breach Response, Data Security, Podcasts, Technology

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Was the 2017 “NotPetya” Ransomware Attack an Act of War?

Posted on April 4, 2019 by | Comments Off on Was the 2017 “NotPetya” Ransomware Attack an Act of War?

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 mcculloughb@hh-law.com with any questions pertaining to this article or any other legal matters.

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Posted in Business Risk, Computer Technology, Cybersecurity, Data Breach Prevention, Data Breach Response, Data Security, Houston Harbaugh, P.C.

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BLOCKCHAIN: Is it the Next Big Step in Data Security?

Posted on December 27, 2018 by | Comments Off on BLOCKCHAIN: Is it the Next Big Step in Data Security?

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, Esquire Co-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 or sneathhm@hh-law.com. 

 

 

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Posted in Business Risk, Computer Technology, Cybersecurity, Data Breach Prevention, Data Breach Response, Data Security, Defend Trade Secret Act 2016, dtsalaw, Technology, Trade Secret

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Business: Seeking Predictability in an Era of Uncertainty

Posted on March 29, 2018 by | Comments Off on Business: Seeking Predictability in an Era of Uncertainty

Here is an article I wrote which was published by DRI in their IDQ (In-house Defense Quarterly) to promote the DRI Corporate Counsel Round Table meeting in Washington D.C. which was held in January. It highlights the uncertainty in business markets and the role of the courts in same. See the article at this link: http://tinyurl.com/y9mov84l 

Posted by Henry M. Sneath, Esq.                                                         Shareholder and Director;                                                                                    Co-Chair of the Litigation Department;                                                    Chair of the IP Department;                                                                         Houston Harbaugh, P.C.  (www.hh-law.com)                                                    Pittsburgh, Pa.                                                                                                              Please contact Mr. Sneath at 412-288-4013 or sneathhm@hh-law.com 

 

 

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Posted in Business Risk, Cybersecurity, Data Breach Prevention, Data Breach Response, Data Security, dtsalaw, United States Supreme Court

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From Legal Tech/Law.Com news: A Bug Bounty for Discounts on Cyber Insurance

Posted on February 20, 2018 by | Comments Off on From Legal Tech/Law.Com news: A Bug Bounty for Discounts on Cyber Insurance

From our friends at Law.Com: In the growing market for cyber insurance, carriers are trying to compete on price.  One carrier, Coalition is offering discounts if your company creates a partnership with a “white hat hacker” and establishes a bug bounty with that hacker. The hacker gets a bounty for finding vulnerabilities. Legal Tech author Rhys Dipshan details the program in the article at this link: http://tinyurl.com/ydck3nxg

Dipshan reports that “bug bounties” are becoming a popular weapon in combating cyber attacks. “Unsurprisingly” Dipshan reports, “bounty programs are becoming increasingly common in the tech and corporate world, with companies such as Facebook, Microsoft and Uber offering compensation for vulnerability disclosures. They also have caught on in the federal government as well, with the Department of Defense launching its “Hack the Pentagon” and “Hack the Air Force” programs.” Do you need a cyber bounty hunter?

Posted by Henry M. Sneath, Esq.  HoustonHarbaugh, P.C. – Pittsburgh, Pa.  https://www.hh-law.com Chair of the Intellectual Property Practice Group and Co-Chair Litigation Practice Group. Contact at: sneathhm@hh-law.com or 412-288-4013

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Posted in Business Risk, Cybersecurity, Data Breach Prevention, Data Breach Response, Data Security, Houston Harbaugh, Technology, Trade Secret

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DTSA Cases Being Filed: Defend Trade Secrets Act 2016

Posted on May 25, 2016 by | Comments Off on DTSA Cases Being Filed: Defend Trade Secrets Act 2016

Posted by: DTSALAW.Com and DefendTradeSecretsAct.Lawyer Henry M. Sneath, Esq. – Chair of the Intellectual Property Practice Group at Pittsburgh, Pa. law firm Houston Harbaugh, P.C.  www.hh-law.com. Mr. Sneath is also an Adjunct Professor of Law at the Duquesne University School of Law teaching Trade Secret Law, Trademark Law and the Law of Unfair Competition. He may be contacted at sneathhm@hh-law.com or 412-288-4013. See Websites www.hh-law.com or www.DTSALaw.com.

The new DTSA federal civil remedy statute is already generating lawsuits being filed in Federal Courts. Two suits were recently filed in the Southern District of Florida with jurisdiction being claimed pursuant to the Defend Trade Secrets Act 2016 (DTSA). One case was also filed in the Northern District of Texas. See links to the cases below. In each Florida case, the plaintiff not only claimed trade secret misappropriation under the DTSA, but also under the Florida UTSA state statute (FUTSA). The Texas case brings claims under DTSA and the TUTSA along with pendent state law claims. This may become the trend as the DTSA and state statutes modeled after the Uniform Trade Secret Act describe trade secrets and misappropriation somewhat differently and provide, in some cases, different remedies. The differences in “definitions” between DTSA and the UTSA are not major, but they may make a difference if either is left out of a complaint filed in federal court.  We will monitor this trend and post in the future on new filings.

Interestingly, while both Florida cases seek injunctive relief in the complaint’s claims for relief, neither docket shows the filing of a separate Motion for TRO, Preliminary Injunction or motion for other injunctive relief. The Dean case brings only trade secret misappropriation claims under the DTSA and the FUTSA state statute. The Bonamar case brings claims under DTSA and FUTSA and a number of pendent State Law claims that you would expect to see in an employment related, non-disclosure, breach of covenants/contract case. In the Texas case, the plaintiff has filed an emergency motion for TRO under both state and federal law and a hearing is set for May 26, 2016. The motion and brief are linked below. Here are links to the cases on our website.

Florida Cases: Bonamar v. Turkin and Supreme Crab ; Dean V. City of Miami Beach et al

Texas Case: UPS v. Thornburg (Complaint) ; UPS v. Thornburg (Emergency Motion for TRO) ; UPS v. Thornburg (Brief in Support of Motion for TRO)

Sneath, Henry 2012 headshot

Henry M. Sneath, Esq. 412-288-4013 hsneath@psmn.com

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Posted in Cybersecurity, Data Breach Prevention, Data Breach Response, Data Security, Defend Trade Secret Act 2016, DTSA, PUTSA, Technology, Trade Secret, Trade Secret Misappropriation

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Defend Trade Secrets Act (DTSA) Seminar in Pittsburgh Jun 22, 2016

Posted on May 11, 2016 by | Comments Off on Defend Trade Secrets Act (DTSA) Seminar in Pittsburgh Jun 22, 2016

Posted by Henry M. Sneath, Esq. – Chair of the Intellectual Property Practice Group at Pittsburgh, Pa. law firm Picadio Sneath Miller & Norton, P.C. (PSMN® and PSMNLaw®). Mr. Sneath is also an Adjunct Professor of Law at the Duquesne University School of Law teaching Trade Secret Law, Trademark Law and the Law of Unfair Competition. He may be contacted at hsneath@psmn.com or 412-288-4013. Website www.psmn.com or www.psmn.law. 

See copy of my Tweet from earlier today: “I’m pleased to be a part of the Federal Bar Association seminar set for Pittsburgh on the new Defend Trade Secrets Act  https://twitter.com/hashtag/DTSA?src=hash   on June 22, 2016. Co-Hosted by the Pittsburgh Intellectual Property Law Association (PIPLA) and the Duquesne University School of Law, where I teach Trade Secret Law as an adjunct Professor of Law. Register at FBA link: http://tinyurl.com/gm8nudj and see my Tweet at
https://twitter.com/PicadioSneath/status/730450574148149248
This is biggest Federal expansion of  #IP  Law since the Lanham Act and when signed by the President (today it appears) – it will provide immediate jurisdiction for  #tradesecret  actions in Federal Court.”

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Posted in Data Breach Prevention, Defend Trade Secret Act 2016, DTSA, PUTSA, Trade Secret, Trade Secret Misappropriation

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