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

Many companies are actively exploring how to better use, commercialize, and productize (make into a standalone product) the data that they collect or is collected on their behalf. A gating issue for these companies is determining whether they in fact own or have the right to use the target data in the manner being contemplated by the business.

Everybody does it. We may say that we only use the “customer’s paper” when contracting, but we know that is often not the case when entering into licenses for commercially available, off-the-shelf (COTS) software products.
An assignment and delegation provision is the clause that specifies a party’s ability to assign its rights or delegate its duties under an agreement. It is a provision that is often placed in the “miscellaneous” or “general” sections of commercial contracts, but it should not be thought of as standard “boilerplate” language that never changes.
A residuals clause is a provision in an IP agreement or non-disclosure agreement stipulating that if a party learns some general information regarding the other party’s IP while working with the other party, the party learning such information is free to use that information retained in its unaided memory in its own business, regardless of the confidentiality or non-use restrictions in the agreement.
Companies that hold patents so that they can sue companies in an effort to generate revenue rather than create their own goods and services—also known as “patent trolls,” nonpracticing entities (NPEs), or patent assertion entities (PAEs)—are estimated to drain more than $80 billion from the US economy each year. Companies in the tech space are particularly vulnerable, and the vast majority of companies targeted by patent trolls settle rather than engage in costly litigation.
On August 30, Morgan Lewis and the Sourcing Industry Group (SIG) will host a full-day Executive Immersion Program in Boston. This popular program provides advanced presentations, workshops, and case studies geared toward executive decision-makers. Speakers include Morgan Lewis partners and industry thought leaders Ed Hansen and Doneld Shelkey.
The latest update to the Statement on Standards for Attestation Engagements (SSAE)—a set of standards applying to compliance reporting, issued by the Auditing Standards Board (ASB)—came into effect recently. If your contract requires certain reports from service providers, you may need to update your contractual language to reflect ASB's changes under this recent update (SSAE 18).
A liquidated damages clause can be a useful tool in a contract to reduce uncertainty and the time and resources spent on potential disputes. Liquidated damages clauses specify the amount of damages to be paid by the breaching party in the event of certain types of breaches as defined in the contract by the parties.
Picking up where we left off last week, below are some additional distinctions for escrow arrangements in the software as a service (SaaS) context and related customer and vendor considerations.
With software as a service (SaaS) offerings here to stay as the preferred technology solution for many key business requirements, we are seeing more and more requests for escrow arrangements involving SaaS solutions.