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Cloud computing raises risk of patent litigation, attorney says

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.

"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.