{"id":114683,"date":"2020-01-28T14:20:29","date_gmt":"2020-01-28T14:20:29","guid":{"rendered":"http:\/\/dominiclevent.com\/blog\/?p=114683"},"modified":"2022-03-01T08:40:53","modified_gmt":"2022-03-01T08:40:53","slug":"when-software-disputes-become-nuclear-litigation-events-daily-report-law-com","status":"publish","type":"post","link":"https:\/\/dominiclevent.com\/blog\/when-software-disputes-become-nuclear-litigation-events-daily-report-law-com\/","title":{"rendered":"When Software Disputes Become Nuclear Litigation Events"},"content":{"rendered":"


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\"Kamal Kamal Ghali (left) and Christopher T. Giovinazzo. (Courtesy photos)
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<\/b>Whatever truth there is to the<\/span> idea that a <\/span>single mobile app<\/span><\/a> brought the Iowa presidential caucuses to a screeching halt, one thing is clear. Software meltdowns can have catastrophic consequences. In today\u2019s economy, virtually every major company, from consumer product makers to business-to-business service providers, powers its business with complex and expensive software. And over the past year, companies across the country\u2014in scores of different sectors including <\/span>finance<\/span><\/a>, <\/span>technology<\/span><\/a>, aviation and health care\u2014have been embroiled in high-stakes lawsuits about the software their businesses depend on. These lawsuits\u2014brought by private actors and governmental agencies\u2014have similarities, namely, hotly disputed allegations about how the software works, and eye-popping claims about the damage caused by faulty software.\u00a0\u00a0<\/span><\/p>\n

The disgruntled software buyers in these lawsuits often seek damages well beyond the already large software sticker-price. And they often include allegations that the faulty software crippled a plaintiff\u2019s business operations. Just last year, Hertz, the rental company, <\/span>sued Accenture<\/span><\/a> after Hertz spent $32 million dollars for Accenture to develop an e-commerce platform and apps to \u201ctransform the digital identity\u201d of Hertz\u2019s rental car business. Hertz says the software failed, and it wants its money back and more. Likewise, the city of Jackson, Mississippi, recently <\/span>sued Siemens<\/span><\/a> contending that Siemens\u2019 faulty software failed to accurately measure how much water Jackson citizens consumed, causing nearly half a billion dollars in damages.\u00a0\u00a0\u00a0\u00a0\u00a0<\/span><\/p>\n

More and more frequently, commercial software suits also claim that alleged security vulnerabilities in the software financially harmed the plaintiffs. Take, for example, a Pennsylvania credit union\u2019s suit against Fiserv for \u201c<\/span>allegedly<\/span><\/a> failing to address persistent vulnerabilities in the platform that powers its banking websites and online applications.\u201d The lawsuit contends, among other things, that security vulnerabilities in Fiserv\u2019s software are \u201c<\/span>wreaking havoc<\/span><\/a>\u201d on the credit union\u2019s customers. Likewise, Cisco Systems <\/span>recently settled<\/span><\/a> a False Claims Act case accusing Cisco of selling video surveillance software riddled with security vulnerabilities.\u00a0\u00a0<\/span><\/p>\n

Other suits accuse companies of deploying software for deliberately nefarious reasons. An Israeli court <\/span>recently rejected<\/span><\/a> a motion to dismiss filed by NSO Group, in a case where a \u201cprominent Saudi activist\u201d claimed that NSO\u2019s \u201ccyberweapons were used to hack his phone.\u201d\u00a0 Similarly, WhatsApp recently <\/span>filed suit<\/span><\/a> against NSO in federal court in California alleging that the company\u2019s \u201cspy technology\u201d was deployed on WhatsApp users. Even apart from cases of purported international espionage, some plaintiffs are claiming that software was intentionally fraudulent, as claimed in a putative class of Tesla owners who say Tesla\u2019s software update fraudulently limited the car\u2019s \u201c<\/span>battery range<\/span><\/a>.\u201d\u00a0<\/span><\/p>\n

Intellectual-property disputes about software are also exploding. A recent suit between Black Knight, Inc. and PennyMac Financial Services centers around the use software that \u201c<\/span>facilitates mortgage transactions<\/span><\/a>.\u201d In the suit, Black Knight <\/span>alleged<\/span><\/a> that PennyMac\u2019s recent deployment of its own mortgage transaction software misappropriated Black Knight\u2019s trade secrets and breached the parties\u2019 contract. PennyMac, for its part, fired back with its own accusations, including <\/span>antitrust claims<\/span><\/a> focused on Black Knight\u2019s use of its market position and software contracts in ways that violate the Sherman Act.\u00a0\u00a0\u00a0<\/span><\/p>\n

While some of these disputes, especially those involving spy technology, may be difficult to plan for, there are certain things companies can do to limit the risks and fallout from disputes over the creation, use and deployment of software:<\/span><\/p>\n