Background
Quantum technology is a class of technology that uses the principles of quantum mechanics, the physics of atoms and subatomic particles. These principles include quantum entanglement and quantum superposition. Technologies such as quantum computing, quantum sensing, quantum imaging and quantum cryptography apply quantum mechanics to solve specific technological challenges.
While the theory behind quantum technology has existed for many years, recent advances in engineering have made it possible to harness and control quantum phenomena more effectively. Improvements in managing quantum states, including entanglement, superposition and decoherence, are bringing practical applications closer to reality.
Quantum technology has the potential to deliver a range of benefits, including:
- more powerful computing capabilities;
- improved accuracy in navigation and timing systems;
- providing secure and faster communications (and putting at risk the security of non-quantum-based ones); and
- more precise healthcare imaging and sensing technologies.
Key terms
Quantum technology is a highly complex field, but the following terms provide a useful introduction:
- Classical Computing: A computing model that processes information using binary digits (0s and 1s), relying on traditional semiconductor hardware and the laws of classical physics.
- Decoherence: The process by which a quantum system loses its quantum properties, such as superposition and entanglement, through interaction with its environment. When this happens, the system behaves more like a classical system.
- Entanglement: A quantum phenomenon in which two or more qubits become linked, so that the state of one is correlated with the state of another, regardless of the distance between them.
- Quantum: A field of science and technology that studies and applies the behaviour of matter and energy at atomic and subatomic scales, where phenomena such as superposition and entanglement can enable new computing, sensing and communication capabilities.
- Quantum bits or Qubits: The fundamental units of quantum information. Unlike classical bits, which can represent either 0 or 1, qubits can represent 0, 1, or a combination of both through superposition.
- Quantum Computer: A computer that uses qubits and quantum phenomena such as superposition and entanglement to perform certain types of calculations more efficiently than classical computers.
- Superposition: A quantum principle that allows a qubit to exist in multiple states at the same time until it is measured, enabling quantum computers to evaluate many possibilities simultaneously.
Key issues
1. Cybersecurity and Cryptography:
- Quantum computing poses a threat to current encryption standards, including those that protect internet communications, banking transactions, and sensitive data stored in the cloud.
- This necessitates a transition to quantum-resistant encryption algorithms across digital infrastructure to safeguard future communications against potential quantum attacks; and also any current communications that can be intercepted and later decrypted (often described as ‘harvest now, decrypt later’ attacks).
- Organisations and governments are already working on developing and standardising post-quantum cryptography to address these challenges.
- In the UK the National Cyber Security Centre has established the timelines for migration to post-quantum cryptography – which will apply across sectors, with the Financial Conduct Authority one of the sector specific regulators actively engaging and requiring business to consider this. Initial timeliness have a requirement around planning and due diligence in 2028.
- These timelines are replicated around regulators in much of the world.
2. Liability and Supply-chains
- Quantum errors are inaccuracies in quantum computations that arise from the extreme fragility of qubits, which are highly sensitive to environmental noise like temperature changes and vibrations.
- The fragility of the technology and the occurrence of errors provide a challenging environment for how issues regarding fault, errors and availability are dealt with in contractual terms and who risk and liability is allocated.
- With the high cost and inherent difficulties in establishing certain types of quantum technologies, access and use is often via a variety of methods, including remote cloud access. Managing the variety of methods for access to quantum technologies will likely challenge traditional supply-chain programmes.
3. Data Privacy
- Legal obligations in relation to using personal data include obligations in relation to the security of that data. Quantum computing has the potential to make ineffective current encryption methods.
- The requirements on businesses regarding their methods of data security for personal data are likely to change as quantum technologies develop.
4. IP Protection
- The development of quantum hardware, such as qubits and quantum gates, represents a significant technological leap. Protecting these innovations through patents is critical but fraught with challenges, including the highly technical nature of the inventions and the uncertain pace of advancement.
- Effective IP protection requires a strategy that accounts for the intricate balance between disclosing enough information to meet patent requirements and safeguarding trade secrets that provide a competitive edge.
- Quantum software and algorithms, which dictate how quantum technologies solve complex problems, are at the heart of quantum technology's potential. The heavy interplay of software and hardware in quantum computing means there is potentially much greater scope for quantum software to be patented than classical software. The legal framework for protecting these algorithms must evolve to address copyright, patentability, and the potential for open-source models that could accelerate innovation while ensuring fair compensation for creators.
5. Impact on Digital Infrastructure
- The advent of quantum technologies is poised to have a profound impact on existing digital infrastructure, including data centres, cables, and telecommunications networks, which are generally not catered for the nuances of quantum technologies. Some of the impacts are as follows:
- Quantum computing introduces the need for specialised environments, including advanced cooling systems to maintain qubits at extremely low temperatures and isolation from electromagnetic interference. This will necessitate significant modifications to existing data centre designs. For example, requiring new standards for isolating compute from environment factors and challenging certain assumptions of classical data centres, such as the benefits of high-density compute environments.
- Quantum communication, particularly QKD, requires new types of infrastructure for secure data transmission. This could include the deployment of dedicated quantum communication channels or the integration of quantum technologies into existing fibre-optic networks.
- The introduction of quantum technologies into telecommunications networks promises to enhance security through quantum encryption methods. However, this also means that telco networks will need to evolve to support quantum signals alongside classical data transmission. This evolution could require significant upgrades to network hardware and protocols to manage the coexistence and interoperability of quantum and classical communications.
6. Corporate Structuring
- Corporate structuring for quantum technology businesses is legally and financially complex due to the dual-use nature of the technology, strict export controls, and significant private equity (PE) investment.
- Companies must navigate restrictions on foreign ownership, non-citizen involvement, and oversight of substantial PE funding, while structuring joint ventures and collaborations with academic institutions critical for research and talent development.
7. Investment and Funding
- The development of quantum technology is capital-intensive, requiring substantial long-term investment. Legal issues related to funding and investment in quantum technology ventures are likely to be complex, involving considerations of IP rights, equity, and international collaboration. Crafting agreements that protect investors while fostering an environment conducive to innovation is a delicate balance that legal professionals must navigate.
8. Export Control
- Export control issues in quantum technology stem from the fact that many quantum systems are considered dual use, meaning they can serve both civilian and military purposes.
- As a result, laws such as the U.S. EAR/ITAR and EU dual-use regulations can restrict not only the export of physical quantum devices, but also the transfer of technical data, cloud access, training, and collaboration with foreign nationals.
- Quantum cryptography and high-performance quantum computing raise particular national security concerns, leading to stricter controls and possible limitations on international research partnerships, publication, and participation of foreign students.
- Because regulations are still evolving and do not always map neatly onto emerging quantum capabilities, companies and universities face uncertainty and compliance risk when sharing knowledge, accessing cloud-based systems, or commercializing quantum technologies.
9. Corporate Structuring
- The quantum technology landscape is characterised by significant investment from both public and private sectors, leading to concerns about market concentration and antitrust implications.
- The high barriers to entry in quantum technology research and development, including technical barriers, skills gaps and return on investment uncertainty, could limit competition, necessitating vigilant antitrust oversight.
About our Quantum Group
Simmons & Simmons is at the forefront of advising on the emerging quantum technology ecosystem. With a strong heritage in technology, IP-intensive industries, and complex regulated markets, we combine deep sector knowledge with legal excellence to support organisations innovating in and around quantum.
Leadership in Quantum Technology
We are one of the first global legal practices to establish a dedicated Quantum Technology Team, integrating expertise from our technology, IP, data, infrastructure, corporate, HR, financing, and regulatory teams. Our lawyers are actively involved in industry roundtables, academic research partnerships, and government-backed initiatives shaping the legal and ethical frameworks for quantum adoption.
We advise quantum start-ups, investors, academic spin-outs, corporates integrating quantum into their digital strategy, and bodies designing quantum-ready regulation.
