The Myths and Advantages of California Law
This week’s musings on tech contracts… Some companies and contract-drafters refuse California for their choice of law terms. I’ve even run into legal department policies saying, “any state but California.” In most IT contracts, that’s a mistake: the result of myth and misunderstanding. Full disclosure: I’m a California lawyer. But it’s still true … California […]
Don’t cross the (payment) streams
This week’s musings on tech contracts… “Don’t cross the streams,” says Egon in Ghostbusters (the 1984 original). “It would be bad.” Venkman asks why, and Egon says: “Try to imagine all life as you know it stopping instantaneously and every molecule in your body exploding at the speed of light.” In other words, “total protonic […]
Updates and Errors, The Tech Contracts Handbook
The third edition of the Tech Contracts Handbook (2021) remains quite up to date. (And it’s a huge bestseller: among the top three from ABA Publishing and regularly in the #1 spot on Amazon for Computer and Internet Law, Science and Technology Law, etc. – though catching up to The Lord of the Rings still […]
What IP should come with gen-AI outputs?
This week’s musings on tech contracts… What IP rights should customers get to outputs from generative AI? This article answers that question for both customers and gen-AI providers. No-Contest and License Customers often look for assignments of IP rights, but there’s really nothing to assign – at least if the provider knows what it’s doing. […]
Don’t accept a “registered after the Effective Date” exception to your IP indemnity
This week’s musings on tech contracts… Some IP indemnities exclude claims about intellectual property registered after the contract’s effective date. The vendor argues that it shouldn’t be responsible for IP it couldn’t have known about when it signed the contract. “If we couldn’t have known, we’re not at fault if our product infringes.” That argument […]
Should the Limit of Liability Cover Indemnities?
This week’s musings on tech contracts… Contracting parties often debate whether the limit of liability should apply to indemnity obligations. IT contracts probably answer “no” more often than “yes.” But you can support either answer with good arguments. The Argument AGAINST Limiting Indemnity Liability The indemnity is unusual. It seems to address liability, but it […]
Two key safety valves for contracts with distributors
This week’s musings on tech contracts Here are two tips for software distribution contracts. They’re for any software provider retaining another company as a distributor. That includes value-added reseller (VAR) and original equipment manufacturer (OEM) deals. If you get a percentage of distributor revenues, set a minimum royalty. Imagine you get a 20% royalty on […]
Don’t grant a license to SaaS, AIaaS, or other cloud services
Many software-as-a-service (SaaS) contracts grant a “license” to the vendor’s software. So do a lot of other cloud services agreements – on offerings like PaaS and AIaaS (artificial intelligence as-a-service). That’s a mistake, at least in the U.S. and jurisdictions with similar copyright laws. Licenses authorize reproduction of on-premise software (generally). Customers don’t reproduce SaaS […]
Don’t blindly accept unlimited liability for breach of nondisclosure terms
This week’s musings on tech contracts … In software contracts, the limit of liability (LoL) almost always comes with exceptions. One of the most common has to do with confidentiality. Liability for breach of the nondisclosure clause has no limit. Why? Most LoLs exclude nondisclosure breaches from the LoL … because that’s what we did […]
Don’t blur the lines between confidentiality and data protection
This week’s musings on tech contracts … IT contracts often include data in the definition of “Confidential Information.” In other words, they use the confidentiality clause to protect “Customer Data” – or whatever else they’re calling the data at issue. That’s not … the worst idea I’ve ever heard. But it leads to some questions. […]