Needed Standards for Software Liability: Focus on the Product for Liability, Focus on the Process for Safe Harbor

• The issue of liability carried by a software provider has not been fully addressed by various legal systems world-wide.
• This article advocates that a software liability system should be constructed to address the contextual nature of software security, reduce litigation costs, and incentivize security improvements.
• A three-part definition of liability is proposed: 1.) rules-based approach defining the minimum legal standard of care for software, 2.) a standard for design flaws based on defect analysis from product liability law, 3.) a safe harbor for developers against liability for hard-to-detect flaws above the minimum standard.
• Federal legislation is called for and implemented through regulatory action, using real-world evidence of common software flaws and technical standards for secure software development.

In order to balance the need between user protection and innovation, a software liability system should address the contextual nature of software security, reduce litigation costs, and incentivize security improvements. A workable liability standard should include a rules-based floor and a process-based safe harbor, as current secure software development frameworks lack sufficient definition. The focus should be product outcomes rather than processes, similar to building codes in other fields.

The problem is framed by exploring various legal fields, such as warranty, negligence, product liability, and certification, which could serve as foundations for legislative action on software liability. The central question across these fields is: “How buggy is too buggy?” Existing software development frameworks are inadequate for providing a clear basis for legal liability, necessitating a product-focused approach.

A three-part definition of liability is proposed: a rules-based approach defining the minimum legal standard of care for software, covering specific product features or behaviors; a standard for design flaws based on defect analysis from product liability law; and a safe harbor for developers against liability for hard-to-detect flaws above the minimum standard, relying on robust coding practices. This combination of bright-line rules and open-ended processes aims to create an objectively measurable standard of care, balancing innovation with security.

Federal legislation is called for and implemented through regulatory action, using real-world evidence of common software flaws and technical standards for secure software development. This approach ensures timely progress, reduces litigation costs, and allocates resources more efficiently towards engineering rather than legal battles, promoting a clear and measurable standard of care in software development.

For those who both create and use software, this article could also provide a “pre-litigation” guideline to help ensure a correct balance between functionality and innovation.

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