TECHNOLOGY, OUTSOURCING, AND COMMERCIAL TRANSACTIONS
NEWS FOR LAWYERS AND SOURCING PROFESSIONALS

As part of our Sourcing and Technology Lunchtime Series, partners Michael Pillion and Peter Watt-Morse recently spoke during their webinar “The Next Frontier: How Robots and Automation are Changing Outsourcing and Technology Agreements.”

The webinar highlighted the emerging market for robotic process automation and artificial intelligence software and the adjustments to services, pricing models, and contractual provisions that arise from adopting this technology.

Listen to the webinar and review the PowerPoint presentation >>

In our earlier Contract Corner post, we reviewed issues related to the term of a contract. In Part 2, we discuss considerations regarding renewal of that term.

Renewal: Practical Considerations

Many contracts contain no provisions regarding renewal, and the term simply ends after a specified period of time. Frequently, this is appropriate. For example, contracts will end when a specific project has been completed or by a specified date for reasons related to intellectual property, third-party agreements, or specific business requirements. On the other hand, renewal should not be overlooked. The parties may have incurred significant startup costs (including negotiating efforts) and want to avoid repeating those costs. For customers, the goods or services (or the price or quality of such deliveries) may not be available from other vendors. For vendors, the customer may be an important client that competitors prize. Therefore, before finalizing the term of any contract, potential renewal provisions should be reviewed.

In Part 1, we provided an introduction to "Blockchain," the distributed ledger technology behind Bitcoin. In Part 2, we discuss some of the business and legal obstacles standing in the way of widespread acceptance of this technology.

As recently highlighted in a Financial Times article, key aspects of distributed ledger technology present some of the biggest hurdles to overcome. Blockchains are trusted because they offer accountability and transparency, but those features raise questions regarding privacy, scalability, and legal regulation.

Please join us on Wednesday from 12:00 to 1:00 p.m. for a one-hour webinar to discuss sourcing and technology issues affecting the future of outsourcing and technology contracts. As part of our Sourcing and Technology Lunchtime Series, partners Michael Pillion and Peter Watt-Morse will speak during the webinar "The Next Frontier: How Robots and Automation Are Changing Outsourcing and Technology Agreements."

Topics will include:

  • Adjusting to shifts in services and pricing models
  • Addressing robotics and automation in scope and service-level documents
  • Capturing the efficiencies of automation in the short and long term
  • Changing personnel, pricing, and intellectual property provisions

It is not too late to sign up for this important webinar—learn more (including about CLE credits) and register.

What is the term of your contract? It is one of the most basic questions with regard to any agreement, but drafting provisions regarding the "Term" raises multiple issues, both legal and practical.

In Part 1 of our two-part post on this subject, we review some important considerations to keep in mind when drafting this common contract provision.

Effective Date. Defining the date a contract begins is the first step in establishing the term. However, frequently, determining the start date of a signed contract is not straightforward. Contracts can be "dated" on a date, "effective" or "commence" on a date, and/or contain blanks for dates to be completed under signature lines. Many times, a signed contract will contain blanks to be completed for each of these possibilities, and such blanks will be filled in with different dates, or some/all of the blanks will never be completed.

In a prior post, we noted that US organizations are taking a conservative approach towards the EU-US Privacy Shield Framework (Privacy Shield) based in part on a lack of regulatory guidance and potential future scrutiny. On September 12, the data protection authority (DPA) of North Rhine Westphalia (LDI), Germany issued its own “guidelines“ for data exporters that highlight some of the DPA’s concerns regarding the Privacy Shield.

The German DPA warned companies that all data exporters in its jurisdiction must verify that

  • the data importer must be registered under the Privacy Shield and that such certifications must be valid;
  • the data importer must fulfill its “notice” and “onward transfer obligations”; and
  • the German laws for general controller-processor data processing generally apply (Sec 11 German Data Protection Act).

In addition, the DPA noted that the data exporter needs to document that it has complied with all of these obligations before sending any data to the data importer. Currently, there is no need to notify this DPA, but the DPA states that it will raise any issues with regard to the Privacy Shield directly with the data exporters in their jurisdictions and in the framework of the annual review of the Privacy Shield with the US government.

In the second annual Cloud Security Survey, CloudPassage surveyed the more than 300,000 members of LinkedIn's Information Security Community on the state of cloud security. As companies continue to invest in the cloud to reduce IT costs and increase flexibility and scalability, privacy and security of data remain top concerns.

Among the key findings include the following:

  • Security concerns are the number one barrier to cloud adoption. General security concerns (53%) top the list, followed by legal and regulatory compliance concerns (42%—up from 29% in last year's survey) and data loss and leakage risks (40%).
  • The top types of data stored in the cloud are email (44%), customer data (31%), sales and marketing data (31%), and employee and payroll data (30%).

“Blockchain”—the technology underlying the virtual currency Bitcoin—has become a hot topic in the business world. Proponents claim that Blockchain has the potential to be as disruptive to business as the internet, and businesses in many industries are investing significant resources into exploring and developing applications for it.

In Part 1 of our two-part post on this subject, we’ll provide an introduction to the technology, its potential applications, and organizations that have been formed to foster it (similar to organizations formed during the development of the internet).

On October 12, Morgan Lewis will host the LatAm Forum on Cybersecurity and IT Services Integration in the Americas at its New York office. The half-day event will focus on key lessons learned, trends, and best practices in the management of information technology (IT) and business process outsourcing (BPO) services by partnering with Latin America’s IT and BPO service providers.

The US National Telecommunications and Information Administration (NTIA) has announced that its agreement with the Internet Corporation for Assigned Names and Numbers (ICANN) to administer the internet’s domain name system (DNS) is terminating on September 30, 2016.

The termination of this agreement is the final step in the NTIA’s long-term plan to transition oversight of the DNS functions from NTIA to the private sector. Over the past two years, NTIA and ICANN have been working with the global multistakeholder internet community to establish a governance structure within ICANN for DNS oversight. NTIA has accepted ICANN’s plan to transition the stewardship of the Internet Assigned Numbers Authority (IANA).