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For decades, online service providers and web and mobile site owners and operators have sought to bind their users to contractual terms and conditions by way of click-wrap, browse-wrap, and similar methods. For nearly as long, these parties have fought over the enforceability of such online contracting efforts. The path to an enforceable online contract should be clear by now, right? You’d think so. Yet, even today, the formation of these agreements continues to be litigated. Click-Wrap Enforceability: Winners and Losers The keys to binding click-wrap and browse-wrap agreements include notice, clarity, and assent. Generally speaking, a “click-wrap” agreement is…
In technology contracts between customers and vendors, it is common to obligate one or both parties to implement “reasonable security measures” to protect applicable data and information. Typically, the obligation is a function of risk allocation or legal requirements. The recently enacted (and more recently amended) California Consumer Privacy Act’s authorization of a private right of action against businesses that fail to implement reasonable security procedures and practices highlights the issue. But, what are “reasonable security measures?” And, which contracting party decides? The Market Speaks Often, technology contracts merely reference, but do not explain, reasonable security measures. A contract…
Updating in-house contract templates and negotiation playbooks is not sexy, nor is it directly related to a particular revenue-generating transaction. However, it may be an efficient way to address the increased pressure on in-house counsel to close more deals in less time – with fewer in-house resources and with smaller outside counsel budgets – brought on by COVID-19. Your peers are already doing it. Precarious State of In-House Transaction Support Drafting and negotiating contracts is much more challenging since the outbreak of COVID-19. According to a recent Altman Weil survey, 44% of Legal departments plan to cut their 2021…
A recent Third Circuit court case rattled current thinking as to trade secret owners’ authority to enforce rights in their intellectual property. Fortunately, the case provided a path for trade secret owners to fully preserve their enforcement rights when making available their trade secret technology to their customers. In short, the court held that those merely possessing a trade secret may be able to sue for misappropriation – that is, enforcement rights are not exclusive to the owner of the trade secret. Non-Owner Possessors of Trade Secrets May Bring Suit This case (Advanced Fluid Systems v. Huber (3rd Cir. 2020))…
As noted in a recent BBC article, the distributed ledger technology known as blockchain has been hyped for many years as the solution to countless transaction ills. However, to date, its principal purpose has been to support cryptocurrencies. That said, there are valuable, non-cryptocurrency uses for the technology, including to manage supply chains, to track inventory, and to establish and maintain verifiable transaction records. Businesses are increasingly considering and adopting blockchain – thus requiring their legal counsel to prepare to contract for this burgeoning technology. As more fully discussed in a previous blog post, there…
The current COVID-19/coronavirus crisis has forced many companies to buy or sell new technology under a previously unseen sense of urgency. While this speed is critical – and absolutely understandable – take care to ensure that today’s deal structure does not undo tomorrow’s benefit. This is especially true as to non-disclosure and confidentiality issues. If your corporate contracting practice involves establishing a non-disclosure agreement (or confidentiality agreement or NDA) with a potential technology customer or supplier, and then later contracting under a different agreement for the actual business you wish to transact with the other party, now is the time…
The focus of the First Circuit Court’s opinion in Photographic Illustrators v. Orgill (1st Cir. 2020) was whether a sublicense may be granted by implication and whether, under the facts of the case, the sublicensor (Osram Sylvania, Inc.) actually granted an implied license to the sublicensee (Orgill, Inc.). However, the foundation of the case hinged on whether the sublicensable license granted to Sylvania by the principal licensor (Photographic Illustrators (“PIC”)) was subject to a covenant or a condition. In the applicable license agreement, PIC expressly granted Sylvania a sublicensable license to use certain PIC photographs to market Sylvania’s lightbulbs. A…
Your company may suffer a cybersecurity incident that warrants bringing in third-party forensics or other consultants to investigate and report on the cause or consequences of the cyber event or compromise. To seek to protect the third parties’ reports with the work product privilege (and, thus, to avoid having to disclose the reports in litigation) – and to try to side-step the unexpected failure to establish such protection that Capital One recently experienced (In re: Capital One Consumer Data Security Breach Litigation) – do (and don’t do) the following with respect to your contracts with these third parties:…
With less than four weeks until the end of the calendar year, many buyers and sellers of software, SaaS, cloud, cybersecurity, and other IT products and services have too many deals – and not enough time – to get everything done. Having been on both sides of year-end technology transactions, I’ve not yet seen a magic wand that provides the sales and procurement teams a stress-free year-end contracting experience. That said, there are several different tactics to try to help technology buyers and sellers conclude year-end transactions that meet their needs and goals – despite the timing stress. The key…
Mash-up (noun): (slang) a creative combination of content or elements from different sources. Several court cases in 2019 dealt with (or are still dealing with) key issues faced by parties to commercial contracts, including contracts for technology products and services. This post briefly discusses four of those cases and their corresponding issues of contract assignment, representations and warranties, and data security. Can You Assign? According to the court in Barrow-Shaver Resources v. Carrizo Oil & Gas (Tex. 2019), the answer to the question, “Can you assign?” is “No.” Bottom line: Make sure your contract clauses are clear and unambiguous,…