A post by Davis Wright Tremaine proposes that professional services and particularly IT outsourcing agreements provide a better model for analytical artificial intelligence services than the widely used cloud services contracts.

“AI services have already become an important component of the IT portfolio for many large and small businesses,” writes Patrick E. Basinski. “The easy application of existing cloud services agreements as a contractual structure for AI services has helped accelerate AI’s adoption. As the reach of AI expands, new structures are needed to drive adoption of a set of potentially valuable AI solutions.”

Read the article.

A post on the website of Baker McKenzie discusses what a general counsel should consider when looking at a contract for cloud and AI services.

“As cloud-based software will continuously change, the user cannot easily prove that certain functionality used to work fine, but is no longer available or working. For this reason it makes sense to check whether the key features are (or can be) described in a document and to refer to that description in the agreement,” according to the post.

The discussion covers moving to another provider, verification that everything is in check, and spelling out the right restrictions on use of data.

Read the article.

Cloud Service Providers (CSPs) are evolving their customer agreements, points out Kemp IT Law.

Richard Kemp discusses how CSPs are addressing the growing risks to service availability from patent claims and in particular how Amazon Web Services (AWS) had included in their Customer Agreement an unusual IP non-assert term.

“From the way the AWS terms work, it’s also at best an open question whether they protect the customer from the risk that open source software used in providing the service infringes third party patent or other rights,” he writes. “Open source is a critical component of the cloud and customers need to understand and review this aspect when selecting their CSP.”

Read the article.

Migrating applications and workloads to a cloud provider has obvious benefits — scalability, flexibility, efficiency, and cost considerations are all driving the dramatic increase in the use of cloud services, write Peter M. Watt-Morse and Glen W. Rectenwald of Morgan Lewis.

In their article on the firm’s Tech & Sourcing blog, they discuss how enterprises that start utilizing proprietary application programming interfaces (APIs) and other vendor-specific development and integration tools can easily become locked into their cloud providers.

“The efficiency and low cost of using cloud services, including form vendor agreements that are provided with such services, can lead to vendor lock-in, making it difficult and expensive to migrate applications in-house or to a new provider,” they write.

Read the article.

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A survey report released by Baker McKenzie reveals it is critical to understand what parts of the cloud contract are negotiable and what is not, particularly in newer portions of the marketplace that have greater variance in solutions and contracting terms, the firm reports on it website.

“The survey report, now in its third year, highlights the top objectives, hesitations, and criteria that buyer respondents factored into their cloud procurement determinations,” the firm says. “These factors are almost identical to the responses from cloud providers, potentially indicating further convergence in the marketplace.”

“Our survey results indicate that there may be convergence in the more established parts of the cloud marketplace, such as Software-as-a-Service, but less so in others, such as Infrastructure-as-a-Service and integration with machine-to-machine/Internet of Things solutions,” said Peter R. George, a Partner in Baker McKenzie’s TMT Group.

Read the article.

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In a dispute that touches on the intersection of copyright, contract law and cloud technology, the Second Circuit affirmed the dismissal of copyright claims against Barnes & Noble related to ebook samples stored on a user’s B&N-provided cloud-based locker, writes Jeffrey Neuburger in Proskauer Rose LLP’s New Media and Technology Law Blog.

“Notably, the Second Circuit dismissed the case on contractual grounds, declining the opportunity to opine on two important modern copyright doctrines that are often implicated when users store copyrighted content on the cloud,” he explains.

Neuburger discusses the case, concluding with, “[T]he dispute underscores the importance for copyright holders to understand the scope of any content distribution license involving cloud storage by users, particularly when broad language is used with respect to the rights of the licensee.”

Read the Proskauer article.

CLE Luncheon, Sept. 26, 12 p.m. CDT
Belo Mansion, Dallas

Scott & Scott, LLP will present a complimentary CLE luncheon titled “Data Privacy and Security Issues in Cloud Contracts” at the Belo Mansion in Dallas on Monday, Sept. 26, from noon to 1 p.m. CDT. The event will be hosted by the Computer Law Section of the Dallas Bar Association.

Robert J. Scott, managing partner of Scott & Scott, will share suggestions on how each party can mitigate, balance or transfer the privacy and security risks in cloud computing.

On the surface, cloud agreements are similar to traditional technology licensing and services agreements; however, cloud computing engagements expose both the client and the service provider to risks not present in more traditional technology service or software transactions, Scott says. The transformation from on-premises software deployments to cloud based models has widespread implication for data privacy, security, and regulatory compliance.

Scott will address each element that contributes to privacy and security risk in cloud computing, including:
• GLBA Rules Affecting Cloud Contracts
• Using Cloud Services in Healthcare
• Due Diligence Obligations in Selecting Cloud Vendors
• Negotiating Key Provisions including insurance, indemnity, and limitations of liability
• How to Comply with Oversight Regulations involving Cloud Service Providers

Attendance for registrants is free, and lunch will be provided.

Register for the CLE luncheon.