The Industrial Internet of Things (IIoT) hits center stage again for cybersecurity awareness and protection efforts with many associated legal issues to consider.
This notification is based on anticipatory analysis of emerging technology vulnerabilities and historical cyber intrusion activities. It is intended for companies and organizations that are using smart manufacturing technologies in their production or research efforts.
The FBI and the National Center for Manufacturing Sciences (NCMS) assess that smart manufacturing technologies and equipment likely are vulnerable to malicious compromise by a variety of cyber intrusion techniques. Such intrusions have the potential to target proprietary design, business, and other manufacturing process information. We have medium confidence in our assessment based on the increasing connectivity of web-based process automation, data analytics, and connected industrial control systems (ICS) involved in modern manufacturing.
Smart manufacturing is often referred to as Industry 4.0 or the Industrial Internet of Things (IIoT) and broadly refers to Web-enabled or networked cyber-physical manufacturing technologies. The integration of network connectivity into manufacturing technologies significantly increases the attack surface for malicious cyber actors, and creates a number of points for penetration or pivoting into other critical network segments.
Production equipment or other advanced technologies associated with smart manufacturing may not necessarily be designed with cyber security in mind. Further, integration of legacy manufacturing equipment into a networked environment may create additional cyber vulnerabilities. As such, security of information technologies (IT) and operational technologies (OT) should be considered in parallel when integrated in a manufacturing setting.
Given the sensitive, proprietary design and process information contained in design and manufacturing process data files, the FBI and NCMS recommend equipment operators and system administrators apply rigorous cyber security practices when incorporating the technologies into their production facilities or hosting the technologies on their networks. Information that transits a manufacturing network should be considered as sensitive as other business-critical information, and should be protected as such.
This assessment follows a highly publicized report in June regarding similar and specific risks involving the electric grid, related to malicious software called "CRASHOVERRIDE."
Companies with strong compliance programs are well-suited for addressing the ever-increasing risks associated with the IIoT. While the IIoT permits industrial, manufacturing and energy companies to realize significant benefits in efficiency and capability, as the two material warnings illustrate, the IIoT also creates new risks that need to be considered. The following assessments may help in defining the risk to your company and identifying appropriate mitigation strategies:
Day Pitney's Cybersecurity practice group has established a working group focused on the IIoT. While this InfraGard and the earlier CRASHOVERRIDE warnings have been of primary interest to technical experts, such as chief information officers and chief information security officers (CISOs), they clearly warrant the attention of in-house counsel as well. While working to stay current on the constantly escalating risks and exposures, Day Pitney's Cybersecurity/IIoT working group has focused particularly on the legal issues implicated by the rapid expansion and significance of the IIoT for our clients. We will continue to provide reports, such as this, regarding the IIoT as appropriate and would be pleased to meet and discuss these issues with you.
 InfraGard is a partnership between the FBI and members of the private sector. The InfraGard program provides a vehicle for seamless public-private collaboration with government that expedites the timely exchange of information and promotes mutual learning opportunities relevant to the protection of critical infrastructure. Day Pitney attorneys participate in InfraGard. More about InfraGard can be found here.
 A summary report has been distributed without dissemination restriction.
 See Day Pitney Client Alert, CRASHOVERRIDE, The Latest Malware Menacing the Electric Grid; see also US-CERT Alert TA17-163A, June 12, 2017
Bill Goddard will moderate a panel, entitled "Liability & Regulatory Issues in Cybersecurity," at the National Organization of Life and Health Insurance Guaranty Associations (NOLHGA) 27th Annual Legal Seminar in Boston, MA.
On February 5, partners Dan Wenner and Jed Davis will present a webinar, "Cybersecurity Incident Report: Applying Reason And Rigor To Control Chaos," produced by PLAC (formerly the Product Liability Advisory Council).
Day Pitney sponsored a program, "Parade of Corporate Horribles: Responding Ethically to a New Problem Around Every Corner," presented by the Westchester/Southern Connecticut Chapter of the Association of Corporate Counsel (ACC).
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On September 13, Jed Davis was a featured panelist on a webinar, "The Threat at Your Doorstep: Why You Should be Using Cyber Threat Sharing," produced by Thomson Reuters.
Jed Davis was quoted in an article, "Rise Of Nation-State Hacks Doesn't Give Cos. A Free Pass," published by Law360.
David Doot, Steven Cash and James Blackburn, IV authored an article, "Risk and Opportunity with the Industrial Internet of Things," which was published in the July-August 2019 issue of The Journal of Robotics, Artificial Intelligence & Law.
Jed Davis was quoted in an article, "Manager Data in Peril from Growing Cyber Threats," published by FundFire, a Financial Times news service for professionals working in the high net worth and institutional investment management industry.
Jed Davis was quoted in an article, "Marriott Hack Shows Risks Of Lax Cyber Diligence In Mergers," published by Law360.
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