If your company does business in the U.S., registering your company’s trademarks and service marks in the U.S. Patent and Trademark Office (USPTO) is an essential investment in your business. Trademarks and service marks are the names or symbols by which a company – and its products and services – are known in the marketplace. They serve to distinguish one company’s products and services from those of another, and become imbued with the qualities that define the reputation of the company and what it sells in the minds of consumers. For example, when one sees or hears the terms Facebook® or Disney® or Wells Fargo® or Trump® – all registered trademarks or service marks in the USPTO – one has certain thoughts, positive or negative, which ultimately affect the commercial fortunes of the companies that sell goods and services under those marks. (The terms “trademark” or “mark” are used from this point forward to refer to trademarks or service marks. The former applies to goods and the latter applies to services. The same legal principles apply to each.)
This article supplements my recently posted article entitled, “11 Key Benefits and Risks of SaaS Contracts.” This time, I’ll address some ways SaaS (“software as a service,” cloud-based) software application providers and their customers can reasonably expect to contractually allocate some of the fundamental business and legal risks associated with use of a SaaS application. There are myriad issues involved in this complex topic, and where the parties end up in their written contract often depends on their relative bargaining power, negotiation skill and willingness to devote money, guns and lawyers (well, hopefully not guns) to the negotiation process.
This post is the first in a two-part series. It will briefly address some of the principal benefits to users of cloud-based, Software as a Service (SaaS) solutions, as well as some of the key business and legal risks to corporate users. The second post will discuss how these risks are typically and fairly addressed during negotiations between cloud software providers and customers. The issues are frequently very complex, but understanding them and properly and reasonably allocating risk between the customer and the cloud provider are critical to arriving at a satisfactory and sustainable agreement.