Technology Transactions

Technology related transactions include agreements such as click-wrap & browse-wrap End User License Agreements (EULA), Mobile End User License Agreements (M-EULA), Software support services agreement, (IaaS, PaaS, SaaS) related agreements, Technology transfer agreements including Joint Development Agreements (JDA’s) etc. We covered technology transfer agreements and SaaS agreements including JDA’s in separate pages under technology transactions menu.

Below is the very brief outline about the technology transactions. Please contact us by email or phone to setup appointment to discuss further about your issue regarding technology transactions.

Click-wrap & Browse-wrap EULA

A click-wrap agreement usually appears on a webpage, where users agrees to the terms of the contract by clicking or checking the dialog box at the end of the contract, and click next or submit to proceed to complete the transaction. As long as there is a “reasonable notice” and “mutual assent” to the terms of the contract, there is an agreement. “Reasonable notice” can be actual or constructive, and “mutual assent” can be affirmative or implied form.

Usually these kind of click-wrap agreements are seen in I.T. software products like software for a specific purpose either by the individual user or enterprise level user. The EULA only granted for a (i) limited purpose, (ii) non-transferable, (iii) non-exclusive, and (iv) non-sublicensable (usually). There will also be a limit on the number of unique IP addresses that can access the software, depending on the “limited use” agreement entered into by parties. If the enterprise company wants all the personnel in a department to have access, then they may do so by only installing the software on the “cloud,” and everyone access that software without storing it on the user desktop. There will be a separate pricing structure for this process.

In browse-wrap agreements, the user or a party to a contract need to just browse the information by clicking on “terms of use” etc. The user is not required or encouraged to see the “terms of use.” It is up to the user or a party to lookup the information on the webpage. However, if the user disagrees with the “terms of use,” then that user is discouraged to use to website for any purpose. Mutual assent may be established just by browsing the website and entering into an agreement with the website service provider. There is some inherent risk with browse-wrap agreements that the court may find EULA “unenforceable,” due to the lack of actual or constructive notice to the end user contracting party. However, there is an argument to be made that there is a constructive notice due to the publication of EULA somewhere on the website.

End User License Agreements (EULA) for mobile apps

Majority of the United States population use a smart phone that can download a mobile application (apps). Usually mobile apps are downloaded by going to an app store, search for an app, and download the app of your choice. Depending on the choice of the app. developer, the app can be free, pay only with initial trial period, and commercial purposes. There are some unique situations for EULA associated with mobile apps in the form of “privacy,” and “advertising.” Privacy issues can be categorized into the following:

(a) Finance related app privacy issues.

(b) Healthcare related app privacy issues in the form of HIPAA.

(c) Technology related app privacy; and

(d) Advertising by app. developer or 3rd parties.

(a) Finance related app privacy issues: The financial apps provided by financial organizations such as banks (BOA app, Chase Bank app, Capital One, Citi Bank, American Express app, US Bank, Wells Fargo app etc), insurance company service apps, organizations that give loans based on information entered on their app, consumer report agencies, information collected on a landlord application through app etc come under Gramm-Leach-Bliley Act (GLBA) and Fair Credit Report Act (FCRA) laws respectively. These laws are enforced by Federal Trade Commission (FTC) Act when there is a “unfair or deceptive acts or practices through interstate commerce.” All enterprise level financial institutions have an internal department that manage these issues through co-ordination between privacy lawyers and I.T. team. Financial institutions cannot sell personal information to third parties or use this information in a deceptive manner without affirmative consent from the app. user.

(b) Healthcare related app privacy issues in the form of HIPAA: Some healthcare apps helps individuals reach desired goals by providing information about a health situation, general wellness information such as tracking calories burnt while exercising, number of miles walked etc. These apps do not fall under the jurisdiction of Federal Drug Administration (F.D.A.). Some other apps act as “medical devices,” in the form of providing diagnosis, prevention, and mitigation etc. Those apps that are acting or replicating the function of “medical devices,” need prior approval from Federal Drug Administration (F.D.A.).

(c) Technology related app privacy: Companies that create apps for their company services also need to be aware of the few federal rules and compliance with European Union’s General Data Protection Regulation (GDPR).  Under Children’s Online Privacy Protection Act (COPPA), children under the age of 13, who access mobile apps need explicit permission from parents in the form of entering app. password for authentication purposes etc. European Union requires the apps that handle personal information of EU citizens outside of EU, to be stored and not shared in a certain manner. The EU-US privacy shield is a guideline for US companies to comply with EU privacy laws.

(d) Advertising by app developer or 3rd parties: As per FTC guidelines, the mobile app. developers who provide description of the app along with public statements about it constitute advertising. Explicit permission of the app user is required when the personal information such as Geo-location in a mall etc is shared with 3rd party service provider, even though the service to the app user is beneficial. The 3rd party service provider collects lot of information through the free service to the app user. When the 3rd party service provider shares that information to the app developer or others for strategies to sell their product better to the app user, that is a problem due to the deceptive nature of the transaction.

The EULA for mobile app is also granted for a (i) limited purpose, (ii) non-transferable, (iii) non-exclusive, and (iv) non-sublicensable (usually). Other terms of the EULA such as risk allocation depends on the nature of the app. service, location, customer base etc.

Software Support Services Agreement

Software support service agreement are usually relevant to companies that provide enterprise software solutions to clients. Sometimes, client may not be able to extract the full potential from the enterprise software. In such a case, client wish to have support service agreement with the software provider apart from the original enterprise software agreement. Based on the bargaining potential and mutual assent of the parties involved, a software support service agreement can be reached. Even though the enterprise software provider is in a greater bargaining position, any agreement that is one-sided usually are susceptible to court challenge. Scope of the support services is an important parameter to consider while evaluating any draft or term-sheet of the Software support service agreement.

Scope of the support service agreement: The provider of the support usually want to limit the number of hours per month the support services can be offered. If the client want more number of man hours dedicated for the support, then a higher per hourly payment may be agreed. The client want to maximize the number of man hours available per month at a certain agreed rate of pay. Remote access services by telephone or through web based application usually cheaper when compared to on-site support service for a service provider. Also, the areas of the support also should be mentioned in the agreement including limiting the area relevant to the enterprise software. Any training of the client personnel also should be noted in the agreement. Intellectual Property (I.P.) need not be shared. If the client wants to use provider I.P., then a licensing scheme can be drawn between the parties.