transforming communications, relationships and professionalism in business and law acc/braves cle...
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3 Evolution of Sourcing Internal procurement and development Outsourcing of select functions Outsourcing of core functions Cloud solutions (IaaS, SaaS, public/private) Multi-country sourcing Mobile computing, collaboration 3TRANSCRIPT
Transforming Communications, Relationships and Professionalism
in Business and Law
ACC/Braves CLE Event August 2, 2012
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Panel Agenda
1. Biggest Tech-Driven Changes in Business in 2012
2. How the Tech Changes and Economy are Changing the Lawyer-Client Relationship and Profession
3. Cloud Contracting and Intellectual Property
4. How to Thrive in a Disruptive Environment
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Evolution of Sourcing
Internal procurement and development
Outsourcing of select functions
Outsourcing of core functions
Cloud solutions (IaaS, SaaS, public/private)
Multi-country sourcing
Mobile computing, collaboration
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What companies are doing in the Cloud, before they know how it can change what they do IT hosting
Software services
Software development
Business process back-office functions
Anything requiring a gigantic server farm and capacity
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Is this How Innovation Happens in Your Organization?
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1. The insular organization becomes the networked organization
2. The individual reemerges from the organization
3. The individual is or may become subsumed by multiple social networks and clouds
4. BYOD is unstoppable
“No matter who you are, most of the smartest people work for someone else.”
– Bill Joy, Cofounder Sun Microsystems
“…the world is becoming too fast, too complex and too networked for any company to have all the answers inside.”
– Yochai Benkler, from The Wealth of Networks
“…The smartest person in the room is the room."
– David Weinberger
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Crowds in Clouds
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Can Consumerization and Cloud be Symbiotic?
"Shadow IT" using the cloud storage of iOS and Android devices keeps growing…
…as IT uses more cloud vendors…
…as the role of IT changes to business support, strategy and contract management.
Apple licenses and other barriers often prevent these from meeting in a private cloud
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Big Changes in the role of the CIO that are all about Legal Support
From Managing Infrastructure To Strategy and Contracts
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Big Changes in the role of the CMO that are all about Legal Support
From Only Outward-Looking To Inward-Looking through Big Data
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The disruption of American business by #socbiz, #cloud, #bigdata, #mobile and #coIT
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What lawyers are doing in the Cloud
Deal data rooms
Digital war rooms
Compliance management solutions
Automated document generation
Search
Knowledge management and transfer
Project management
Collaboration
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Examples: Deal Data Rooms, Digital War Rooms, Compliance Centers, Compliance Management Solutions
Easy and quick to set up
Low costs
Client and/or Firm can manage
Controls
Reporting capabilities
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Economy-Driven Changes in the Profession
Knowledge Management
Automated Document Generation
Process Management
• Insourcing
• Outsourcing
• Projects
Alternative Staffing Models
Playbooks
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Major Ethics Changes Just Issued and About to Happen
DC Bar Ethics Opinion 362• http://www.dcbar.org/for_lawyers/ethics/legal_ethics
/opinions/opinion362.cfm
ABA House of Delegates Filings:• INTRODUCTION & OVERVIEW• RESOLUTION & REPORT: Technology & Confidentiality• RESOLUTION & REPORT: Technology & Client Development• RESOLUTION & REPORT: Outsourcing
ABA "Issues Paper Concerning Model Rule of Professional Conduct 5.5 and the Limits of Virtual Presence in a Jurisdiction"
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What consumers are doing in the Cloud
Sharing user-generated content
Accessing Big Content stored in the cloud
Moving freely between devices
Collaborating
Meeting/logistics
Convenience applications/usage
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Key Risk Allocation Terms
Representations and Warranties
Indemnification (limited to third party claims)
Disclaimers
Limitations of Liability – Nature of damages, caps
Intellectual Property
Insurance
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Traditional Sourcing Concerns
Control (or lack of) – Decrease in cloud
Cost containment – Strong cloud management to realize
savings
Pricing competitiveness – Pay as you go flexibility of
cloud, but with what trade-offs?
Risk allocation – Best practices emerging
System changes/compatibility issues
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Traditional Outsourcing vs. Cloud Services
Start with sound outsourcing concepts, then consider impact of :
Big Data meets outsourcing
Multiple geographic locations
Cloud privacy and security concerns
Ability to destroy data
Cross border transfers of information
Practical takedown ability
Compliance (industry-specific, financial controls, litigation)
Ease of interface with other vendors, handoff points
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Traditional Outsourcing vs. Cloud Services – Familiar ProvisionsUse of cloud requires thoughtfulness around familiar
contractual provisions, such as:
Risk allocation terms
Audit ( SSAE 16 as globalization model, SOC2 )
Service levels (same or different – availability,
performance, accuracy?) v. key performance indicators
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Traditional Outsourcing vs. Cloud Services – Familiar Provisions (Con't) Security (gap between cloud commitment and obligation
to customer; what types of data security
standards/guarantees are reasonable – regulated data
PCI, HIPAA)
Suspension, termination, effect of (what happens to the
data if hosting client apps?)
Transitional services (what to ask for)
Governance
Backup/disaster recovery
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Traditional Outsourcing vs. Cloud Services – Additional ConsiderationsHowever, use of cloud requires consideration of additional
provisions, such as:
Compliance with laws (geographic issues, changes, US
Patriot Act)
Information management (records, holds, storage,
disposal)
Underlying contractual limitations (territory, copies,
exports, simultaneous use)
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Traditional Outsourcing vs. Cloud Services – Additional Considerations (Con't) Data protection (emerging standards, effectiveness,
monitoring, enforcement, segregation, viruses)
Liability issues (financial controls, global data privacy,
other)
Open source
Intellectual property rights (existing works, new works,
derivative works)
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Traditional Outsourcing vs. Cloud Services – Additional Considerations (Con't) Analytics/computer learning rights (knowledge transfer,
access, ownership, usage rights)
Shared services/personnel
Maintenance and support obligations
Cloud change management (change management policy
and operation consistent with policy)
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Impact on Innovation
Outsourcing as the end of innovation?
Institutional innovation brain drain?
Technology and cloud enable real-time innovation
Real-time innovation as key to better decision-making?
Collaboration
How are IP rights defined?
How is IP protected (works and trade secrets)?
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Categories of Intellectual Property
Big Content (multimedia)
Visualization
Big Data
Predictive analytics (usage)
Ideas, trade secrets, confidential information
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Intellectual Property Issues
Offensive and defensive issues
Technology-related traps and unanticipated results
IP reps, warranties and indemnities
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Intellectual Property Concepts
Original works
Copyright/Fair Use
Moral/integrity rights
Trade secrets
Confidentiality
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Intellectual Property Ownership Issues
Existing Works:
• Limitations of underlying license (form, access, use,
geographic)
• Digital rights management
Derivative Works:
• Right to create
• Ownership of
• Integrity rights/issues
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Intellectual Property Ownership Issues
New Works:
• Innovation (offensive)
• Collaboration (offensive)
• Ownership (offensive/defensive)
• Protection (defensive)
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Copyright – Fair Use – GSU Case
Case filed by 3 publishers against Georgia State in 2008;
decided May 2012
Involved GSU's use of e-reserves and e-course sites to
make excerpts from academic books available online to
course-enrolled students
Only relief sought: Prospective injunctive relief (i.e., stop
the practice)
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Copyright – Fair Use – GSU Case (Con't)
Applied 4-factor (Section 107) test:
• Purpose and character of use (testing, scholarship)
• Nature of copyrighted work (non-fiction, educational)
• Amount and substantiality of the portion used
("decidedly small")
• Effect of use on potential market (availability of
license; related revenue potential
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Copyright – Fair Use – GSU Findings
Out of 75 infringement claims, only 5 infringing uses of
excerpts
Very favorable in favor of GSU; positive outcome for
higher education enterprise
Strong support of fair use in non-profit educational
setting
Copying excerpts into reserves is not "transformative";
limited analysis/application for factor #1
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Copyright – Fair Use – GSU Findings (Con't)
New test (factor #3): for works with 10 or fewer chapters,
up to 10% favors fair use; for books with more than 10
chapters, one chapter was maximum to favor fair use
A digital version was not a substitute for a print or photo
copy version
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Copyright – Fair Use – GSU Points of Interest
In GSU, the court considered the work to be the entire
book in all circumstances
• Forecloses consideration of effect on market for
excerpts
Consideration of existence of digital licensing scheme
(factor #4); if none, or small revenues, favors fair use
• True measure of "potential market"?
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Copyright – Fair Use – GSU Points of Interest (Con't)
Photocopying cases in commercial setting held not
applicable; no discussion of photocopying cases involving
students and finding no fair use
Impact of new quantitative test on current qualitative
practices within community?
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Copyright – Fair Use – GSU Points of Interest (Con't)
Non-transformative use here, but what about search
engine cases finding transformative use?
• Fails to consider context of copying – is educational
use a transformative activity?
The excerpts, even edited ones, were not "derivative
works" under Section 106 (2), but rather verbatim copies
of small portions
• If a "derivative work," originality belongs to editor;
impacts standing
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Copyright – Fair Use – GSU Points of Interest (Con't)
De minimis finding - If nobody reads it, no infringement
• Fails to consider fact entire excerpt was copied and
uploaded
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Copyright – Fair Use – GSU Questions
Impact on Code of Best Practices in Fair Use for Academic
and Research Libraries?
Impact on community practices and other guidelines
(e.g., brevity and spontaneity)?
Applicability, if any, to non-textual materials (e.g., video,
audio)
Applicability of any of these concepts to commercial
settings?
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Moral Rights/Integrity
US copyright law vs. other jurisdictions
Possibility of contractual or tort claims in the nature of
integrity claims
Relation to a "derivative work" or work that is an
alteration, modification, recasting, or transformation of a
preexisting work
Consider opportunity to significantly modify and repost
works in digital space; are these transformative or new
works?
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Trade Secrets and Confidential Information
A trade secret is information that is valuable from not
being generally known and has been subject of
reasonable protection
Consider risk in the cloud and with BYOD workforce
Substantial risk to trade secrets given probability of
breach
Damages great – Monetary and loss of protection
Cloud provider liable? Applicable damage limitations?
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Trade Secrets and Confidential Information (Con't)
BYOD – iPhone accesses/stores enterprise information;
user backs of iPhone files to cloud
Lack of control in cloud – locations outside reach of US
law, remote access (perhaps unauthorized) via employee
device, back-up, extra or unsecured copies can exist even
after files are removed, modified or encrypted later
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Trade Secrets and Confidential Information – Suggestions Corporate policies on remote access, use of personal
devices, and social networks
Review and update security policies and requirements for
smartphone technology
Employee training on policies and trade secrets and
confidential information issues
Restrict access to crown jewels based on job needs; do
not place in public cloud
Focus on Security and IP Protection at the App or
Element Level
Define the Platforms & Apps that May & May
Not Hold IP, Create Records or Address
Issues Subject to Hold
Assume All Systems are Infected
Monitor/Prevent Exfiltration
Clear, Helpful,Credible
Communication
Electronic Information Stewardship
Be the Humble Host Where People Want to
Build or Enjoy Apps
"Culture Eats Strategy for Lunch"
"Would you cross the street based on
information that was five minutes old?"
Practice Pointers: Pollyannas with Paranoia?
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Please Contact Our Practice Leaders
Gus Dixon (Columbia CT)
Tel: 803.255.9491
Email: [email protected]
Jason Epstein (Nashville CT)
Tel: 615.664.5364
Email: [email protected]
Donna Lewis (Atlanta CT)
Tel: 404.322.6346
Email: [email protected]
Jon Neiditz (Information Management) @jonneiditz
Tel: 404.322.6139
Email: [email protected]