I recently had the opportunity to put this question to in-house counsel from several major public Canadian and U.S. cloud vendors in connection with a speech I gave on “The Evolution of IT Licensing: From Software Licensing to Software as a Service” at the Canadian IT Law Association’s Annual Meeting in October.
Agreeing to speak to me on an anonymous basis, the vendors confirmed that cloud computing remains an ever fluid, rapidly changing field, there is no “one-size-fits-all cloud arrangement,” and cloud agreements have indeed evolved beyond the vanilla templates of even a few years ago in order to meet the demands of particular regulated industries and government clients. A few selected highlights are mentioned below.
There is no question cloud vendors own the IP behind their technology. However, the ownership of customizations remains contentious.
As one vendor complained, “Downtown lawyers do not really understand IP ownership in the cloud. Clients are not in the SaaS business themselves. So effectively, it is not useful for customers to ‘own’ customizations because what good does this really achieve for their business?”