Quantum Computing
It is expected that this will enable certain computational problems to be solved much more efficiently than through classical computing. While traditional computers operate on bits, computational units that can represent either a 0 or a 1, quantum computers use quantum bits, or qubits, which can represent a 0 or a 1, or anything in between. This phenomenon, called superposition, together with other phenomena gives quantum computing its remarkable potential.
There are many potential use cases of quantum computing. These include the simulation of molecules and other physical systems, solving optimisation problems, quantum machine learning, and more. Quantum computing also impacts cryptography because it could break encryption methods currently used to protect our data and day-to-day transactions. While it is unclear when this might happen, standards organisations have worked, and are still working, on post-quantum cryptography to counteract this threat. In this context, governments and authorities are also developing updated guidelines and legal frameworks for cybersecurity.
From a legal perspective, the advancement of quantum computing leads to challenges and considerations, among others, in the fields of data security, intellectual property, contract drafting, and regulatory compliance.
Some of the most commonly used encryption schemes rely on computational problems that cannot be efficiently solved by a classical computer – which is why they were chosen for encryption – but could be solved by a sufficiently strong quantum computer. This potential of quantum computers poses data security challenges, even for today’s data transmissions. Intelligence agencies and other organisations are intercepting and storing encrypted data, with the aim of decrypting it later, when quantum computers are strong enough. For this reason, even today there is a need to encrypt data in a quantum-safe way so that it cannot be decrypted by unauthorised organisations in the future.
In August 2024, the US National Institute of Standards and Technology (NIST) standardised three post-quantum cryptography algorithms to address these threats. These algorithms are initially only binding for the US government and its service providers. However, they will increasingly develop a legally or factually binding effect for other organisations worldwide as well. There is no general deadline for when organisations must implement post-quantum cryptography. The recommended deadline may depend, among others, on the type of data processed, the regulatory framework to which the organisations are subject and the contractual obligations they have.
In the field of quantum computing, fundamental developments are currently taking place in the areas of hardware, software and algorithms. This poses requirements for intellectual property protection, such as through patents or contractual safeguards. In quantum computing, more than in other fields, advances are achieved through collaborations between organisations.
Furthermore, as quantum computers are not “universal” yet, certain quantum computing software can only run on certain quantum computing hardware (called “platform”) and vice versa. In other words, hardware and software are interdependent. When developments are made by consortia in which one party focuses on hardware and the other on software, this can lead to particular challenges when assigning intellectual property. This is because advances in hardware often also trigger advances in software and vice versa. Also, maintaining trade secrets may be more challenging than in other areas given the highly collaborative nature of quantum research. These factors highlight the need for thorough advice on IP and contract drafting.
Why Bird & Bird?
We respond proactively to the continuous business transformations driven by new technologies in all key sectors of the economy, including automotive, aviation & defence, energy & utilities, financial services, life sciences & healthcare, retail & consumer, media, entertainment & sport and tech & comms.
A snapshot of our recent experience
- We advised a leading quantum computing hardware provider on procurement and commercial matters, helping them win a major tender for the sale of a quantum computer that advances quantum infrastructure in Germany.
- We advised leading quantum computing hardware providers on their commercial agreements with customers and service providers.
- We advised leading quantum computing providers inter alia on consortium agreements with scientific institutions.
- We advised on procurement and funding law for participation in a procurement procedure for quantum computer funding by the German Federal Ministry of Education and Research, as well as a procurement procedure by the German Aerospace Centre (DLR) for the construction of quantum computers.
- We advised the largest US manufacturer and rebuilder of electron devices on the IP and technology aspects of a transaction and conducted due diligence into the target’s patent portfolio, the key inventions of which relate to a novel antennae system that is capable of detecting aircraft in the presence of clutter and interference. The deal was strategically important for our client in particular as regards to the target’s ongoing and substantial investment in the development of quantum-enabled technology under the UK National Quantum Technologies Programme (UK-NQTP).
