Protecting Your Business Globally - David Snead, i2Coalition

1. Protecting Your Business Globally
ResellerClub Hosting Summit 2013
W. David Snead
Attorney + Counselor
Tactical Legal Advice for Internet Business

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Creating a global user agreement
Negotiating with international vendors
Optimizing your corporate structure
Handling abuse issues

3. Vendors
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Term
Warranties
Intellectual property protection
Fees
Flow down provisions
Assignability
Terms of Service
SLA
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AUP
Customers
Can you provide service during term?
Carefully consider warranties
IP is your most important asset
Can vendor raise fees?
Create integrated contract
Keep in mind your exit
Privacy Policy

4. TOS
AUP
Customer
Privacy
SLA

5. TOS
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Start with your vendor contracts
Look at your marketing materials
Consider your place in the market
Reflect your home country’s laws
• Amendment of the
Your TOS should tell the truth TOS
• Resource usage
• Order process
• Ownership
• Fees and Payment
• Termination
• SLA
• Warranties
• Limitation of liability
• Choice of law

6. • Start with your vendor contracts
• Look at your marketing materials
• Consider your place in the market
• Don’t bite off more than you can chew
• Asterisks don’t protect you
Your
SLA SLA is not just marketing
• Technical staff must verify

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Privacy
Start with your country’s laws
Look at your vendors contracts
If you sell information: disclose that
Understand cultural sensitivities
• Describe “personal
Privacy policies are contracts information”
• Disclose of monitoring tools
• Disclose sale of data
• Consider data retention

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AUP
Start with your vendor contracts
Look at marketplace
Consult home country laws
Consult laws of data location
Lawful use
Harmonize•your AUP with your
• End users responsible for content
vendor’s
• Intellectual property issues
• Unwanted content
• Offensive content
• Suspension
• Notice address

9. Harmonize your AUP with your
vendor’s
TOS
Your SLA is not just marketing
AUP
Customer
SLA
Privacy policies are contracts
Privacy
Your TOS should tell the truth

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Creating a global user agreement
Negotiating with international vendors
Optimizing your corporate structure
Handling abuse issues

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What are you required to do?
What type of assistance will you get?
What are your long term obligations?
What are you giving up?
Are you negotiating on price only?

12. General contract analysis.
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SLA
Choice of Law
How does the technology operate?
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Contract
Scalability
What is the level of automation?
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Possibility of
human error
How do other companies affect the
technology?
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Destabilization

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Reliability / SLA
Security
Privacy
Skin in the game
Choice of law
Long term viability

14. Legalese
Company shall provide to Customer an access code and
the functionality set out on the particular page
describing the functions and features provided by the
Service. Company’s sole and exclusive obligation is to
make the Service available to Customer as set out in
the SLA.
Plain English
• You get access to the services
Your vendors should stand behind their
products and have “skin in the game.”

15. Legalese
Company shall provide to Customer an access code and
the functionality set out on the particular page
describing the functions and features provided by the
Service. Company’s sole and exclusive obligation is to
make the Service available to Customer as set out in
the SLA.
Plain English
• You get access to the services
If you don’t understand the product,
you should find or get assistance.

16. Legalese
Title to XXX Units, including all patents, copyrights and
other intellectual property rights shall at all times
remain with XXX and its suppliers. MSSP acknowledges
that XXX Units constitute a valuable asset of XXX and
agrees to hold all such XXX Units strictly confidential in
accordance with the terms and conditions of this MSSP
Agreement. MSSP shall, use commercially reasonable
efforts to minimize the unauthorized disclosure,
publication, display or use of XXX Units. MSSP shall not
copy, modify or reverse engineer any XXX Units, nor
remove, alter, cover or obfuscate any copyright notices
or other proprietary legends placed or embedded by
XXX on or in any of the XXX Units. MSSP may not use
any component part of the XXX Software owned by an
XXX supplier as a standalone program or in any way
independent from XXX Software provided by XXX to
MSSP.
Plain English
• The company owns everything.
• You own nothing.
Intellectual property is your most
valuable asset. You should keep yours.

17. Legalese
Plain English
Subject to the cancellation terms outlined
• There is an early termination fee
below (which are only applicable to the
Pay attention to words like “year” and
monthly
and
hybrid
payment
“term.”
options), MSSP will be responsible for
paying the full billable amount per user for
the full year during which the termination
occurs and a cancellation fee applicable to
remaining years in the Term.

18. Legalese
Plain English
In addition to the foregoing, we specifically
• You are responsible for
disclaim all liability, and you shall be solely
maintenance
Understand upgrades, updates and
responsible
for
the
versions.
development, operation, and maintenance
of your Application (including any Bundled
Application) and for all materials that
appear on or within your Application and
you agree that you shall, without
limitation, be solely responsible for: any
interactions between users of the Service

19. Your vendors should stand behind their
products and have “skin in the game.”
If you don’t understand the
product, you should find or get
assistance.
Intellectual property is your most
valuable asset. You should keep yours.
Pay attention to words like “year” and
“term.”
Understand upgrades, updates and
versions.

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Creating a global user agreement
Negotiating with international vendors
Optimizing your corporate structure
Handling abuse issues

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Who owns what
Type of entity
Tax treatment controls
Place of formation
Tax treatment
Registered agent / corporate records agent

22. • How do you quantify your business?
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• Find a good tax advisor
• Experience with the Internet
• Experience with startups
• Experience setting up systems
• Experience with deferred revenue
• Can advise on International
corporate structuring.
Revenue recognition
Prepaid accounts
Reseller issues
Deferred revenue

23. SPAM
Operational Issues
• Real Time Black hole Lists / IP Blocking
• CAN-SPAM
Customer and Service Issues:
• Marketing frustration
• Customer Service Issues

24. SPAM
Operational Issues
• Real Time Black hole Lists / IP Blocking
• CAN-SPAM
Customer and Service Issues:
• Marketing frustration
• Customer Service Issues

25. Subpoenas and Warrants
Any and all materials, containing any information…any and all back-up tapes which contain or store
any electronic mail from any past or current…electronic mail accounts.

26. Subpoenas and Warrants
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Prepare for requests for production
Amend TOS to require clients to bear cost
Amend TOS to specifically address issue
Determine your tolerance for risk
Confer with parties early and often
Assess costs of storage now

27. Subpoenas and Warrants
• Review, Verify, Schedule , Comply
• Relationship with law enforcement
SPAM
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Termination for Abuse
• Based on contracts
• Determine procedure up front
• Don’t rely on disclaimer of liability
What’s the number for your lawyer?
• Base response on contracts
• Find someone with Internet
experience
Draft policy
Post contact information
Check complaint
Develop relationship with RBL

28. All contracts are negotiable
Don’t negotiate on price alone
Understand flow down provisions
Don’t lock yourself in more than 2 years
Tell the truth

29. W. David Snead
Attorney + Counselor
Tactical Legal Advice for Internet Business
david.snead@dsnead.com
wdsneadpc / Twitter
thewhir.com / Blog