ARTICLE
8 April 2025

Quantum Computing Legal Issues: The Risks And Opportunities

GW
Gowling WLG

Contributor

Gowling WLG is an international law firm built on the belief that the best way to serve clients is to be in tune with their world, aligned with their opportunity and ambitious for their success. Our 1,400+ legal professionals and support teams apply in-depth sector expertise to understand and support our clients’ businesses.
The rise of quantum computing (QC) is a topic fundamental to all businesses globally. Whether or not quantum computers will appear in offices any time soon...
United Kingdom Technology

The rise of quantum computing (QC) is a topic fundamental to all businesses globally. Whether or not quantum computers will appear in offices any time soon, cloud technology and some other central processing hubs are already using QC to speed up their processing. The opportunities and risks, however, are important to understand.

How do quantum computers work?

The technological step that separates classical computers from quantum computers is the difference in the apparatus that processes information. The key to traditional computers is the array of microscopic conductors known as 'bits'.

Every bit can either be recorded as a '1' if it has current running through it or '0' if it does not, allowing each bit to have two potential states. Qubits, which are found in quantum computers, harness the fundamental discovery of quantum physics (that subatomic particles can exist in multiple states simultaneously) to have vast numbers of potential.

To put into context the difference in processing power that qubits allow for, 500 qubits have the same power as 2500 conventional computer bits.1 It's clear to see how QC allows for far more complex algorithms to be run and for these programs to process at significantly faster speeds.

What are the challenges with quantum computing?

QC has undoubtedly come a long way in its relatively short lifespan since Paul Bienhoff described a theoretical quantum computer in 1982.2 The Canadian company D-Wave was the first to take QC into the commercial realm, selling a 182-qubit machine for around $10 million in 2011, and IBM made QC available over the cloud in 2016.3 However, a number of challenges remain.

It remains very difficult to make viable and error-free qubits. Creating the perfect conditions for quantum states to maintain their superpositions takes significant energy and remains expensive and experimental. Also, there are not currently enough quantum-trained engineers to keep up with any projected commercial demand for QC, nor is there enough quantum-centred software to make use of the power if QC were to become more widespread.

McKinsey estimated that, while some 5000 quantum computers may be operational by 2030, the hardware and software necessary for these computers to really upgrade computing speeds for the masses will be at least five years behind.4

Who is leading the quantum advancement?

Who are the market players leading the development of QC and innovation? Technology firms such as IBM, Google, Microsoft, and Amazon are advancing research and providing cloud-based QC services. Financial institutions, such as JPMorgan Chase and Goldman Sachs, are exploring the potential and benefits of QC finance.

Industrial applications are being pursued by companies such as Honeywell and Boeing, while startups such as Rigetti and IonQ are dynamically exploring quantum technology. Academic institutions like MIT, Cambridge, and Berkeley are also contributing foundational research pertaining to the technology, while government initiatives such as NASA, the UK's National Quantum Programme, and the EU's Quantum Flagship are all funding large-scale projects, shaping the landscape of quantum and its future.

How is quantum computing impacting different sectors?

Biopharmaceuticals

Quantum technology is transforming the landscape of the biopharmaceutical industry by leveraging quantum algorithms to aid in drug discovery. These technologies allow for more accurate modelling of biomolecular interactions, leading to faster and more precise predictions of how drugs will behave in the human body.

This quantum advancement accelerates pharmaceutical research and development. Additionally, quantum-driven molecular modelling enables for simulations of chemical structures and reactions which improve the efficiency of product development. Companies being first to the race at pioneering in this field may secure patents, giving them a strategic advantage in pharmaceuticals, scientific research, and energy applications.

Automotive

The automotive industry is also benefiting from the field of QC, particularly in vehicle design, autonomous driving, and electric vehicle (EV) battery performance. Quantum technology and quantum machines enact simulations which allow for more precise modelling of materials, improving battery safety, energy storage capacity, and recyclability.

Research studies, such as that conducted between Ford's partnership with Quantinuum, have demonstrated that QC can reduce development time and costs while optimising battery efficiency. Additionally, QC enhances route optimisation for autonomous vehicles, improving navigation and reducing energy consumption.

Financial services

Financial institutions are actively exploring to gain a competitive edge. Computing has the potential to offer faster data encryption and processing for high-frequency trading, enabling real-time market analysis.

It also has the ability to strengthen fraud detection through advanced pattern recognition and enhance cybersecurity by improving data encryption methods. Additionally, QC can optimise investment strategies and asset management by efficiently analysing complex datasets, while the development of sophisticated quantum algorithms will allow for more accurate financial forecasting.

Energy

In the energy sector, quantum machines are driving improvements in power grid management, environmental modelling, and material optimisation. To fully unlock the benefits of QC, there is increasing collaboration in the energy sector, for example between ExxonMobil and IBM within the IBM Q Network, to explore quantum solutions for energy challenges.

Research suggests that quantum technology can optimise electricity distribution, enhance carbon capture efficiency, and facilitate the discovery of new materials for sustainable energy production. Additionally, quantum technologies have helped advance battery technology and refine processes such as hydrogen production and carbon storage to improve cost-effectiveness and efficiency.

What are the legal risks of quantum computing?

The advent of QC gives rise to a suite of legal issues and risks for businesses, including but not limited to safety, contractual, tort, regulatory and more. We consider below examples of three key areas in which QC poses legal risks.

Data protection & security

QC presents a fundamental threat to existing encryption methods (which serve to protect sensitive information, posing significant risks to laws and regulations prescribing data protection standards. Breaches will likely result in liabilities, penalties and reputational damage.

The prospect of 'harvest now, decrypt later' espionage, where encrypted data is reaped today and cracked by quantum technologies in future once feasible, presents additional legal challenges.

Find out more about QC and data protection.

IntellectualProperty

Quantum technologies present new complications with respect to intellectual property rights. It raises questions as to patent eligibility and protection by means of other IP rights. This could lead to disputes over ownership of proprietary rights. Issues regarding licensing, infringement and enforcement of rights, domestically and across borders, could arise.

Competition, FDI and Trade

As an emerging and nascent technology, the development of QC is dominated by a small number of large tech companies, raising concerns over the concentration of market power; and the potential for anti-competitive conduct. The authorities will seek to monitor and regulate anti-competitive behaviour which may distort competition to maintain an open and functioning market.

On trade, certain governments have already designated quantum technologies as capable of military applications, and therefore subject to export controls.

Quantum technologies are the focus of foreign-direct investment screening regimes. The UK Government designated quantum technologies as a sensitive area of the economy under the National Security and Investment Act 2021 regime. Acquisitions, disposals and restructurings, by way of asset or share transactions, involving quantum technologies may be subject to the regime and could require regulatory approval.

How can we help?

Whether you are developing or deploying quantum technologies in your business, our full-service team has the experience and expertise to provide you with holistic and specialist advice on the implications of quantum on your business, the key legal risks associated, and appropriate mitigation measures to consider.

Thank you to our sector trainees who helped draft this article, Sebastian Moncrieffe, Arianna Lorentzos and Joel Butcher.

Footnotes

1. What is a qubit?

2. A brief history of quantum computing

3. The history of quantum computing you need to know [2024]

4. A game plan for quantum computing

Read the original article on GowlingWLG.com

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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