Look at the Clouds! It is Lightning – or is it a Silver Lining?

Look at the Clouds! It is Lightning – or is it a Silver Lining?

Outsourcing is no new invention. However, now it has taken to the skies; Apple will launch iCloud, Amazon’s music player is cloud based, and in the US on-demand-services has taken off with successful businesses such as Netflix, Hulu, Amazon, Flickr etc. This week someone predicted the death of the PC! Google has just launched their PC with no software. Everything is now on-line “in the cloud” with no need to store or install software or any information.

So, seen from an IP protection perspective is everything just excitement and glee? Looking in the crystal ball the future may hold bright skies with clouds containing all your business information, day-to-day communication and files. A bit like web based mail. Yet everybody knows what happens, when a mail service breaks down: you have no access and you are dependent on the provider (ISP) to solve your problem. And what happens with you IP-protected stuff? Are you sure that your documents, writings, works of art, trademarks, patent information and all confidential material which you are in the process of securing, is safe? And who bears the responsibility if there is a breach of security – and is it a responsibility that will cover your loss and damage (and perhaps that of your client, not to mention your customers’ loss in confidence in you and your business) sufficiently?

Ultimately, Cloud service is just another word for storage and distribution of computing services and programmes. As convenient as this may be, it also puts a very big emphasis on the relation between you and the ISP; you and your business are wholly dependent on the security of the service, response times, loss of data prevention and recovery and liability. Especially when your ISP is located in another jurisdiction it will be crucial to determine and establish where disputes may be resolved; do you have to go to a court in another country? Further, there is no uniform regulation of ISPs; most will have and change their own rules of contract and change them regularly. As an example one just has to bear in mind how often Facebook has changed their rules for using their service and how the users of Facebook have complained.

Cloud services are probably going to be something that eases the lives of most people and businesses. But as there are no common rules, and as there often are cross-border-relations and no IP-legislation covering responsibilities and rights to stored information, it will be crucial to ensure that your contractual relations with the ISP cover this. Before you enter into any alluring cloud services it will be a good idea to make sure that you are not left with a bit of cloud between your hands if things go wrong.

Thorbjørn Swanstrøm, Attorney at Law

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