Decoded - Technology Law Insights, V 5, Issue 10, December 2024

Sophia Hines, Brienne Marco, Nicholas Mooney II, Shane Riley, Alexander Turner
Spilman Thomas & Battle, PLLC
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Volume 5, Issue 10

Welcome

Happy Holidays and welcome to our year-end issue of Decoded. We hope you enjoyed reading our technology law insights e-newsletter this year. We are already planning for 2025.

Thank you for reading and we wish you a wonderful holiday season.

Top Cybersecurity Risks in 2025 and Beyond

“As we have seen with Boeing Co. and others, ransomware—online extortion schemes perpetrated against vulnerable companies—remains a top concern. And OT and the vast supply chain increasingly are targets.”

Why this is important: In 2025, we are likely to see increases in ransomware and nation-state attacks on our manufacturing and supply chain sectors. This includes a shift from attacking IT networks to targeting industrial control systems, causing operational downtime in critical industries. To address this change in the focus of cyber threats, new regulations, like the North American Electric Reliability Corporation Critical Infrastructure Protection (NERC CIP), have been instituted to mandate stronger cybersecurity protocols. The issue is that the majority of industrial control systems are decades old and have known vulnerabilities. NERC defines latent vulnerabilities as “long-standing, higher-risk issues that evade detection and persist within entities’ environments.” These include the failure to maintain strict access management, failure to institute software patches, and failure to conduct vulnerability assessments. Simple solutions to fix these vulnerabilities include conducting quarterly reviews of who has access to industrial control systems and removing the access of departed employees. Additionally, all software patches should be applied and kept up-to-date. Annual vulnerability assessments should also be conducted in order to identify and fix identified weak points in the system. These assessments are critical because many organizations do not even know that they are vulnerable until it is too late. Additionally, these solutions are not a one-time fix, but must be implemented on an ongoing basis to address future emerging threats. The moral of the story is that organizations must be proactive and aware of cyberthreats in order to avoid the shutdown of critical infrastructure and manufacturing. --- Alexander L. Turner

Here's How a Trump Presidency could Affect Cryptocurrency for the Next 4 Years

“If the U.S. moves forward with plans for a Bitcoin reserve, it could elevate crypto as a strategic national priority.”

Why this is important: There is no surprise that President-elect Donald Trump is going to usher in a shift in the regulatory scheme for and federal perception of cryptocurrencies, principally, Bitcoin. The shift will likely come in waves. Several legislative acts have already been introduced or passed through the House which will set the stage for a wider audience and playing field for cryptocurrency. Oversight by the SEC and the classification of certain currencies as securities would both be overhauled if new legislation is passed that would establish the Commodity Futures Trading Commission as the regulatory lead for cryptocurrency. Taking the training wheels off of public consumption will certainly lead to a rush of capital, unprecedented highs, a natural crash or trough to the wave, and then stabilization, depending on whom you ask.

In the next four years, if the Bitcoin Act of 2024 passes it will require the U.S. government to purchase 1 million Bitcoins, or 5 percent of the total circulating supply, over the next five years, effectively creating a federal Bitcoin reserve. Brazil has a similar plan. All of this serves to establish that currently, nations are eyeing several cryptocurrencies as sources of unyielding potential for their economic growth. More Wall Street products, international trading markets, and national investments will take center stage over the next four years. Regardless of feeling or opinion, in the second Trump presidency, the cryptocurrency markets will see market movement, investment, and federal approval, at a level this country has never seen before. --- Sophia L. Hines

Combining AI and Crispr Will Be Transformational

“In 2025, we will see AI and machine learning begin to amplify the impact of Crispr genome editing in medicine, agriculture, climate change, and the basic research that underpins these fields.”

Why this is important: The article highlights how AI and machine learning are beginning to amplify the potential of CRISPR genome editing across fields like medicine, agriculture, climate change, and research. While AI is often surrounded by hype, it is already making tangible contributions to genomics, enabling scientists to handle vast datasets and accelerate discoveries.

In genomics, AI tools are identifying small gene-editing proteins and functional RNA molecules with improved properties, such as heat tolerance, which could enhance therapies and biomanufacturing processes. For health and drug development, AI is helping refine CRISPR's precision, targeting efficiency, and reducing side effects, expediting therapies for genetic diseases like sickle cell anemia and potentially others. In agriculture, AI-optimized CRISPR advancements are leading to resilient and productive crops, enhancing food security. In climate, the combination could unlock solutions for carbon capture and sustainability.

Though still in the early stages, the integration of AI and CRISPR holds transformative potential and is already driving significant progress. --- Shane P. Riley

3D Printing and Modular Construction - A New and Growing Avenue for the Construction Industry

By Stephanie U. Eaton

Just as many national, local and company-specific clean energy and sustainability goals are aiming for carbon reduction or carbon neutrality by certain future dates, such as the U.S. federal government’s target of at least 50 percent carbon reduction by 2030, the demand for electricity continues to grow. In fact, the construction industry’s use of electricity is predicted to grow 20 percent by 2030. How can contractors, designers, engineers, architects and building owners help reduce the industry’s carbon emissions and electricity demand at the same time?

Click here to read the entire article.

Healthcare Providers will Need to Boost Cyber Defenses Amid AI Adoption: Moody’s

“AI could ease labor shortages, but health systems will need to increase cybersecurity spending to manage heightened risks, according to the credit ratings agency.”

Why this is important: AI has the potential to be an effective tool in the healthcare industry, but its adoption comes with its own challenges. Healthcare executives hope that the utilization of AI will assist with the industry’s heavy administrative workloads, help manage workforce shortages, and help with clinician burnout. AI could also be utilized to assist with diagnosis and treatment decisions. However, AI adds another cybersecurity risk to an industry that is already one of the leading targets of cybercriminals. Participants in the healthcare industry are already increasing their cybersecurity spending and manpower to address increased threats. With the addition of AI, healthcare organizations will have to address new threats and increased future regulatory compliance.

While we have focused thus far on how AI is a benefit and a risk to the healthcare industry, we have not discussed the use of AI by health insurers to manage claims. There are already criticisms on how healthcare insurers utilize algorithms to deny claims. With the utilization of AI to review claims on the rise, health insurance companies have seen new litigation regarding the use of AI to deny claims. In the matter of the Estate of Gene B. Lokken v. United Health Group, Inc., the plaintiff brought a class action against United Health Group’s reliance on artificial intelligence tools to deny medical claims under the Medicare Advantage plans constituting a breach of contract, breach of the implied covenant of good faith and fair dealings, unjust enrichment, and insurance bad faith. Plaintiff alleges that United Health Group used AI to deny a claim for physical therapy after a procedure and that it would not allow an appeal of that decision by the patient’s doctor. In order to address this issue with AI reviewing claims, insurance companies will have to invest more time and money in revenue cycle management to make up for the increase of claims denials by AI. --- Alexander L. Turner

Medical Devices could Become Safer with This New Breakthrough, Experts Say

“New blood vessel-like coating could prevent dangerous bleeding and clotting, research suggests.”

Why this is important: Advances in science and technology have given mankind unique opportunities to live longer than our ancestors who faced similar health conditions. Researchers from the University of British Columbia have developed a novel chemical coating that could make medical devices safer. Through challenging years of research, the researchers have succeeded in mimicking the natural behavior of blood vessels. While still in the testing phases, the initial results bode well for patients. If approved, the material would permit blood-containing devices such as catheters, stents, dialysis machines, and other devices to be used without requiring the patient to take the excessive amount of blood thinners that are usually needed to avoid clots. The current treatment method creates a higher risk of bleeding and still does not eradicate clots from forming in current medical-grade devices. This advancement could save lives and it is not likely that the coating application is the only method by which this chemical compound will be employed. --- Sophia L. Hines

Smart Gadgets’ Failure to Commit to Software Support could be Illegal, FTC Warns

“The FTC released its statement after examining 184 smart products across 64 product categories, including soundbars, video doorbells, breast pumps, smartphones, home appliances, and garage door opener controllers.”

Why this is important: The FTC has warned that smart device manufacturers failing to disclose the duration of software updates may violate the Magnuson Moss Warranty Act, which mandates clear warranty information for consumer products. A study by the FTC of 184 smart devices revealed that 89 percent did not specify software support timelines on their product pages. When disclosed, the information was often ambiguous or hidden in obscure sections like FAQs or footnotes.

The FTC criticized vague phrases like “lifetime technical support” or “continuous software updates” and highlighted inconsistencies, such as devices marketed with "lifetime" support that had actually ceased updates years earlier. The report also noted misleading AI-generated summaries and urged law enforcement and policymakers to investigate non-compliance.

Advocacy groups like iFixit and Consumer Reports have pushed for clearer regulations on software-dependent devices, warning that inadequate support risks turning products into prematurely obsolete "disposables." The FTC's report suggests that omissions about software support could violate both the Magnuson Moss Warranty Act and FTC rules against misleading practices. Some experts advocate for mandatory disclosure policies to protect consumers as the Internet of Things expands.

If your business deals in smart devices, it is important to keep your warranty policy up to date and avoid FTC scrutiny. --- Shane P. Riley

Corporate Transparency Act Enjoined Nationwide

By Brienne T. Marco

On December 3, 2024, the U.S. District Court for the Eastern District of Texas preliminarily enjoined the enforcement of the Corporate Transparency Act (the “CTA”), finding that “the CTA is likely unconstitutional as outside Congress’ power.” A nationwide stay was also issued regarding the December 31, 2024 CTA reporting compliance deadline for business entities formed before January 1, 2024 and not exempt from reporting under one of the CTA’s exemptions. The injunction is preliminary, and a final resolution will depend on appeals and further proceedings. If the government appeals (which could be affected by the second Trump presidency), the case will go to the U.S. Court of Appeals for the Fifth Circuit, and potentially the U.S. Supreme Court for a final resolution, with the stay on enforcement of the reporting rules likely to remain in effect throughout the appeals process.

Click here to read the entire article.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. Attorney Advertising.

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