Tech & Sourcing @ Morgan Lewis

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Broad awareness has been made about cyberattacks in the form of phishing that typically use email messages to lure victims into divulging sensitive information or opening a link that allows malware to infiltrate their device. Companies have learned how to combat phishing by training employees to recognize such scam attempts and report them as phishing to protect their organizations. “Vishing” is another tactic used by scammers that, while less familiar, is no less invasive and dangerous.

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.

As part of our M&A Academy series, please join us on Tuesday, December 14, 2021 at 11:30 am ET as Morgan Lewis partners Vito Petretti and David G. Glazer discuss key considerations in structuring and negotiating transition service agreements in the context of M&A transactions.

As part of our Digital Disruption and Innovation webinar series, please join us on Tuesday, December 7, 2021 at 12:00 pm ET as Morgan Lewis partner Doneld G. Shelkey and associate Eric J. Pennesi discuss the future of the growing esports industry.

The Court of Justice of the European Union (CJEU) has held in Case C-410/19 The Software Incubator Ltd v Computer Associates (UK) Ltd that the supply of software by electronic means, where accompanied by the grant of a perpetual user license in return for a fee, could constitute a “sale of goods” for the purpose of defining a commercial agent under the EU Commercial Agents Directive (the Directive).

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.

The Board of the International Organization of Securities Commissions (IOSCO) has published a set of revised outsourcing principles for regulated entities. IOSCO is an international policy forum for securities regulators and a global standard-setter for securities regulation whose membership regulates more than 95% of the world's securities markets.

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.

The Chancery Lane Project, a UK-based nonprofit network of legal professionals, has published a “Net Zero Toolkit” to help organizations achieve net zero goals. The toolkit includes 100 “climate clauses” aligned with the 2015 Paris Agreement goals.