SCL Meeting Report: ‘Intellectual Property Rights and Information Management in Technology Transactions’

December 6, 2011

Edwards Wildman hosted an SCL Meeting at their London office on Intellectual Property Rights and Information Management in Technology Transactions. The event was chaired by Richard Graham, a partner at Edwards Wildman, with speakers from Microsoft, Google and NBCUniversal. 

Richard Graham explained that the meeting would cover all aspects of intellectual property rights and information management in the context of technology transactions, including dealing with such issues in development agreements, licensing agreements and service agreements. It would also address the changing nature of technology transactions as we embrace the cloud, open source and agile software development. Richard noted that the panel speakers were from an interesting cross-section of technology – with Microsoft representing the software licensors, NBCUniversal representing the content licensors and Google representing the new breed of service providers facilitating access to data and content. 

David Shanks (a legal counsel at Google) and Lawrence Schoeb (legal counsel at Universal Pictures International Entertainment, a division of NBCUniversal) were first to speak, and addressed the commercialisation, ownership and licensing of IPRs. They highlighted some of the pitfalls to avoid when faced with the commercialisation of IPRs, including failing to ensure the confidentiality of key information, and not securing ownership because of ineffective purchasing. They noted that ownership of IPRs can be thought of as a negative right, in that it means you can prevent others from doing certain things. They also examined licensing from the perspective of licensors and licensees and pointed to issues such as scope, exclusivity, licence fees, geographical extent, permitted uses and length of term as being particularly important. They noted that the approach of both licensors and licensees to these issues would be determined by the risk profile of the proposed deal in question. 

Richard Graham then talked about open source software (OSS) in the context of technology transactions. He explained that with OSS the licensee can access the underlying source code and can use OSS for any purpose, make royalty-free copies, derivative works, and combine the OSS with other software. Consequently, it is very important for organisations to understand when they are using OSS in software development and that they understand the impact when then subsequently license their technology to end-users. This is especially so in the light of Gartner research that estimates that by 2013 OSS will be included in 85% of all commercial software packages. Richard said that it is important that we all improve our understanding of how OSS interacts with proprietary code and the associated licensing implications so that we can provide strategic advice to our clients. 

Stephen Bolinger (a US lawyer in the commercial legal team supporting Microsoft’s UK business) finished the panel speaking on the subject of data protection and information security in technology transactions. He gave a background into the definitional aspects of data protection in the context of technology transactions, in particular international technology transactions. He then compared the outsourcing model – which entails a bespoke service, meaning that customers can request something unique – and the cloud sourcing model, which depends precisely on the opposite, namely standardised services. Stephen also addressed the implications of international transfer of data, and the concept of safe harbor in the context of data protection compliance. 

The seminar concluded with questions from the floor. The speakers were asked for their thoughts on the predominant concerns for the future. Lawrence said that, from his perspective, new technology had led to the domination of digitised content, so his focus was on how best to monetise that content. David suggested that the main challenge he currently faces is how to ‘future-proof’ licences with sufficient flexibility to withstand the extreme pace of innovation. Stephen thought that the move to the cloud had brought about a sea-change in technology transactions. He explained that buying a bespoke service in an outsourcing model was totally different from buying a standardised service in the cloud.  

All three speakers felt that much of their time was spent addressing the concerns of parties who were struggling to adapt their commercial approach to reflect this new environment. This is yet a further challenge for the profession as the law and technology converge. 

Ed Norman is a trainee solicitor at Edwards Wildman (