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Transferring computer viruses through photo CDs, DVDs could cost more than just customers.

These days who hasn't been a victim of computer viruses? In today's high-tech, fast-paced, computer world just about everybody has either been the victim of a damaging computer virus, or knows someone who has. This should come as no surprise considering that with each passing year computer viruses are occurring with more frequency. In fact, the number of computer virus attacks reported in the United States has more than doubled in each year since 1990.

Perhaps what is more troubling is that computer viruses are growing more complex and causing more damage to computer systems and networks than ever before. With computer viruses on the rise, and the costs associated with repairing the damage they cause spiraling out of control, it is no wonder that individuals and corporations alike are starting to look for someone that they can hold responsible.

So now comes the question you should all be asking yourself: Could my business be held liable for transferring a computer virus to my customers? Believe it or not the answer to this question could very well be "yes."

Customers can file civil liability claims

In response to the growing concern over this issue, most of the 50 states, as well as the federal government, have passed legislation that is designed to protect us from computer crime. From a civil standpoint, however, much of this legislation is flawed.

First, the majority of this legislation imposes criminal penalties on those found guilty under the statute but provides no civil remedy for the victim of a computer crime. Second, the few statutes currently in place that do provide for a civil remedy, impose a "knowingly" or "intentionally" caused standard. This means that in order to hold someone liable under the current legislation for any damages associated with the transferring of a computer virus, it is necessary to show that they intentionally transferred the computer virus.

Obviously, this is not the case in your typical scenario. Most computer viruses are transferred from user to user unknowingly. So how could a customer hold your business liable for unknowingly transferring a computer virus to them? The answer may be simpler than you think.

To date the typical victims of computer viruses and computer crimes have filed lawsuits based on contract law theories rather than tort law (such as negligence) theories. The primary reason for this is that in computer virus cases the economic expectations of the parties are covered by commercial and contract law--it does or does not work as promised. This is different than the law where defective products cause physical damage to property or a person, which has traditionally been remedied by resort to the law of torts.

This distinction is important because in many jurisdictions computer information is still not considered property. Consequently, recovery under tort law is barred by a legal theory known as the economic loss rule.

According to the traditional economic loss rule, before a tort claim can be filed the damage must first flow from a loss to property. In recent years, however, courts have begun to disregard the economic loss rule, particularly with regard to cases regarding computer information. In addition, more and more jurisdictions are starting to recognize computer information as protected property. This opens up the possibility that in future those who unknowingly transfer computer viruses may be subject to liability on the age old tort law theory of negligence.

You can almost picture the scenario. A customer brings in digital photographs of his sister's wedding for processing. Per the customer's request the store creates a CD or DVD for the customer. Unbeknownst to the store manager the CD or DVD he has produced contains a computer virus. The customer's virus protection software fails to detect the virus, consequently, the photos are lost and the customer's computer is seriously damaged. The next day the customer files a lawsuit against the store claiming that the store manager was negligent in producing the CD or DVD because of his failure to exercise reasonable care in detecting the computer virus.

Protecting your business

The idea of holding a business or an individual that unknowingly transfers a computer virus to another liable for civil damages is just beginning to develop. It seems inevitable, however, that in time these types of actions will become more and more commonplace. With little guidance available as to how courts will treat these legal actions, knowing how to protect yourself from this type of liability can be difficult.

With that said, the most simple advice is often the best advice. PMA members can start by making sure that the security measures they currently have in place are up to date and working properly. Labs working with digital photographs as well those producing photo CDs and DVDs should implement measures to make sure any CD or DVD produced for a customer is virus free.

Beyond that I would strongly recommend that PMA members consider having a liability limitation clause in place when dealing in the production of CDs or DVDs. This limitation clause may help reduce your liability for any damages sustained by customers who do happen to obtain computer viruses from disks you generate.

It is important to remember that the photo industry is an industry of continuous change. Anytime you pair an industry like ours with one as unpredictable as the computer and technology industry, it is going to be difficult to speculate what the future may hold. PMA members must continue to stay ahead, stay focused and expect the unexpected.

Written by Brendon R. Beer, an attorney with Marcoux Allen, and Philip M. Moilanen, with Marcoux Allen and the PMA Legal Counsel.
COPYRIGHT 2004 PMA Magazine
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2004 Gale, Cengage Learning. All rights reserved.

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Author:Beer, Brendon R.; Moilanen, Philip M.
Publication:Digital Imaging Digest
Geographic Code:1USA
Date:Mar 1, 2004
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