Electronic Technology Licensing Issue

From: Devlin, Kelly A. (kdevlin@haslaw.com)
Date: Wed Jul 28 2004 - 08:30:21 PDT


Dear Law-libbers and Vendors Who Sell Electronic Licenses to their
Products Who Might Be Listening,

Warning: The following could qualify as a rant (on what I think is an
important issue)

I have an issue with a clause that keeps popping up in our licensing
agreements for electronic products, and I'm wondering if any other
Law-Libbers have encountered this problem, and if you did, how you
solved it.
Generally, the clause states that the vendor can come in to inspect our
computers, our entire network, at any time. Supposedly, this is to make
sure we purchase the correct number of licenses and don't "over-install"
beyond what we've purchased.
The question: How can a law firm possibly agree to let some vendor come
in at any time to look at its computer network, when lawyers have strict
client confidentiality ethical obligations and client data is
wholeheartedly what's on their networks, without violating the code of
ethics when the vendor shows up at the door?
Now, as a practical matter, I really don't see many vendors showing up
at the door to do an inspection. However, the clause has shown up in
vendor contracts for electronic services where no countable licenses are
even being sold, e.g., a firm license to view data purchased is granted.
Consequently, I don't see any justification for granting vendors access
even if it weren't objectionable ethically.
I just had one vendor tell me that they're going to cancel my contract
if I don't sign this amendment because they are "required by
Sarbanes-Oxley" to tell the government that they've given us a copy of
these terms. Have I missed something? Does SOX really require the
vendors to contract for an all-access pass with us? Or, are they just
using SOX's other requirements to increase their rights under the
contract? And, of course, if I don't sign, my firm gets to pay higher
prices, prices which may be double under the current contract. (Right
now, I feel as though my left arm is twisted far behind my back as
someone is shoving a pen in my right hand so I must be typing with my
toes!)
Rant over. Whew! How does Dennis Miller do it?
But more importantly, what do you think?
Kelly A. Devlin

 <<Kelly Devlin (E-mail).vcf>>





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