One of the most crucial issues to nail down is whether the cloud provider will require your client to migrate to the newest version of the applications soon after they get released (thereby forcing the company to incur training expenses and the disruption new software inevitably causes) or can your client remain on the old version of its software for some period of time?
How to unwind the licensing arrangements at the end of the cloud provider's contract is another issue you should deal with at the beginning of the relationship. Your client will need the cloud provider to cooperate with and assist the successor service provider (or your client's in-house IT staff if the functions are being returned to a local environment) in licensing all necessary software and then migrating all existing data and documents and, more importantly, preserving intact all information and metadata embedded in your client's documents (like dates, author, customer file numbers, etc.).
If the databases are particularly complex or large, the migration process could be lengthy and you may need to negotiate a transition period following the term of the contract during which your client can have access to the old cloud while preparing the new cloud.
This is by no means an exhaustive list of the IP issues that arise in cloud computing deals, but they give you a sense for the questions that counsel should raise with clients that are seeking advice in this area. Obviously, lawyers (whether outside or in-house) are no substitute for your client's IT employees or consultants, but if you take the time to learn about your client's business and the particular operational challenges the company has in the IT area, you will be in a much better position to offer truly valuable representation in these transactions.
Thomas H. Speranza is a partner in Kleinbard Bell & Brecker's business and finance department. He has more than 20 years of experience handling both corporate and intellectual property transactions offering his clients a valuable perspective in today's business environment, where technology and IP assets are a crucial element in most deals.
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