Tech & Sourcing @ Morgan Lewis

Non-fungible tokens (NFTs) have exploded in popularity over the past year. Use cases for NFTs have been growing as more industries are realizing the benefits they present. A report by blockchain specialist Chainalysis found that almost $41 billion was spent on NFTs in 2021—a number that is likely to continue growing.

As 2021 comes to a close, we have once again compiled all the links to our Contract Corner blog posts, a regular feature of Tech & Sourcing @ Morgan Lewis. In these posts, members of our global technology, outsourcing, and commercial transactions practice highlight particular contract provisions, review the issues, and propose negotiating and drafting tips.

Morgan Lewis's website, morganlewis.com, has been redesigned with a new look and tools to make it easier to access and leverage information about the firm.  One-click navigation takes users directly to landing pages for Our Practice, Our Thinking, and Our Firm, where you can explore events and webinars, blogs and other publications, trending topics, and more. You can also learn more about our commitment to Diversity & Inclusion, community engagement, and pro bono services.

With the exponential growth of cyber threats, cloud computing and remote working, contract provisions regarding data security requirements have also expanded in size and frequency. It has become common practice to prepare schedules to detail (and limit) security requirements. Customers and vendors both have a vested interest in clearly identifying expectations and obligations for such requirements. In this week’s Contract Corner, we explore considerations when it comes to drafting security schedules.

Companies are transforming legacy systems, implementing automation and artificial intelligence tools, embedding digital capabilities into their products, shifting to cloud solutions and leveraging technology to better connect to their customers, personnel, and third parties, all at an unprecedented pace. The focus on businesses to get to market faster, reach a broader audience and provide real-time interaction has in turn put pressure on legal and sourcing documents to keep up. The complexity and volume of the numbers of projects (and contracts) can be daunting — especially for companies that have not yet elevated the importance of the technology law function within their organizations.

During the last year, we have seen a significant shift to “as a service” models and cloud solutions, as well as heightened attention on outsourcing as a strategic business tool to enable scalability, improved service, and accelerated access to in-demand technology and resources. This increased reliance on vendor performance to enable business operations has underscored the importance of implementing a solid service level methodology in order to: establish performance metrics that align with the customer’s expectations and business requirements; measure, monitor, and report performance against the metrics; set out the remedies for service level defaults, including service level credits and termination rights; and agree to events that may excuse performance resulting in missed service levels.

Over the last year, companies implemented new digital technology solutions at record levels, looking to implement emerging technologies, improve the user digital experience, leverage cloud solutions to store the massive amounts of data being generated, and test the waters on how to transact using digital assets. And we don’t see things slowing down.

Are you a customer negotiating a services agreement that will grant you access to use certain technology? Have you read through the agreement or accompanying links to determine if you need to adhere to an acceptable use policy (AUP) for such technology? In this post, we’ll discuss some of the items a customer should consider when reviewing AUPs within services agreements.

The inclusion of transition-out obligations within service agreements should not be overlooked in the contract drafting process because they help to provide a game plan if the service provider/customer relationship winds down. In this post, we discuss some of the items a contract drafter should consider when drafting clauses to address transition-out obligations.

Last week, we started to take a look at key issues sponsors should be mindful of when entering into a sponsorship agreement, particularly for sponsorship of a team, event, venue, individual influencer or player, or similar arrangements.