Silverpop Systems provides digital marketing services through a
cloud-based tool called 'Engage'. Leading Market
Technologies, Inc. ("LMT") engaged Silverpop through a
service agreement and during the course of that agreement LMT
uploaded digital advertising content and recipient e-mail addresses
to the Engage system. A trove of nearly half a million e-mail
addresses, provided by LMT, was stored on the Engage online system.
In November 2010, Silverpop's system was hacked, putting
LMT's email list at risk. Silverpop notified LMT of the data
breach. After LMT refused to pay for further service,
Silverpop suspended the agreement.
Litigation commenced in 2012, with LMT claiming damages for
breach of contract and negligence based on Silverpop's failure
to keep the email list secure. Should the service provider be
liable? Silverpop argued that it was engaged to provide access to
its online system, not specifically to keep data secure. Thus there
was no breach of its
