Author Archives: «Rob Scott»

A Blueprint for Value Creation Over the years, Managed Service Providers (MSPs) have understood the critical role that recurring revenue plays in their enterprise value growth. Traditionally, hardware sales and projects offered short-term financial boosts but added little......

While we've seen that fears about technological progress are often exaggerated, it's important to acknowledge that each wave of innovation brings its own set of ethical and legal challenges. This is where specialized AI lawyers play a critical role—guiding businesse......

Introducing Monjur's Contracts-as-Service with Vendor Risk Mitigation The digital landscape is constantly evolving, and businesses need to keep pace. Nowhere is this truer than in the world of Managed Service Providers (MSPs). Not only do MSPs need to stay abreast of tech......

In today's ever-evolving cybersecurity landscape, managed service providers (MSPs) are continually navigating a sea of new challenges. Clients depend on MSPs not just for the latest technologies but also for their expertise in implementing sound security measures. Howeve......

Master Services Agreements (MSAs) serve as the cornerstone of operational clarity between Managed Service Providers (MSPs) and their clients. This comprehensive guide is intended for MSP owners. We'll clarify the strategic role of insurance and the limitation of liabilit......

In the ever-changing landscape of data privacy, staying up-to-date with regulations is not only beneficial—it’s crucial. Managed service providers (MSPs) bear the responsibility of ensuring their practices align with evolving state, federal, and international laws. I......

When considering your costumer contracts, the gravity of one particular clause in your Master Services Agreements (MSAs) cannot be overstated - the non-hiring clause. Allow me to elucidate why this clause is legally indispensable and how it fortifies the contractual back......

Artificial intelligence (AI) is transforming the legal industry by streamlining various functions and improving efficiency. One area where AI has made a significant impact is contract review, where machine learning algorithms can quickly analyze and identify critical inf......

In a recent FBI warning, the public is warned about the rise of malicious actors manipulating photos and videos to create explicit content and engage in sextortion schemes. This alarming trend involves the use of advanced technology to alter benign images and videos crea......

In the digital age, businesses rely heavily on managed services providers (MSPs) to handle their data processing needs efficiently and securely. However, the evolving landscape of data privacy laws, both at the federal and international levels, necessitates careful consi......

As a Managed Service Provider (MSP), your clients entrust you with a crucial responsibility: ensuring the security and smooth operation of their IT systems. This responsibility extends to the vendors that provide the software, hardware, and services vital to these system......

As artificial intelligence (AI) continues to advance and reshape industries, businesses must navigate the complex landscape of privacy and security regulations to ensure their AI systems are compliant and secure. Legal professionals with expertise in AI privacy and secur......

Request A Consultation Vendor risk management has become an increasingly important aspect of IT management, especially for MSPs who are trusted by their clients to ensure the safety and security of their systems. This task includes carefully scrutinizing and managing the ......

Safeguard Your Business in the Age of AI As artificial intelligence (AI) continues to revolutionize industries and reshape the way we work, the importance of responsible AI practices and ethics has become increasingly evident. Ensuring that AI technologies are developed a......

Safeguarding Your Interests and Ensuring Compliance As artificial intelligence (AI) continues to revolutionize industries and reshape the way we work, businesses must consider various aspects of AI licensing to protect their interests and ensure compliance with applicable......

As an MSP, you may be familiar with the challenges of getting clients to sign contracts and other legal agreements. One of the key strategies for streamlining customer contracting is the use of browser wrap agreements.  Once your client signs the initial agreement, it a......

Creating a comprehensive list of AI-specific definitions for an AI contract can help ensure that both parties have a clear understanding of the terms and concepts involved. Here are suggested definitions for key terms in an AI contract: Artificial Intelligence (AI......

As a Managed Service Provider (MSP), managing vendor risks is a critical aspect of your job. Your clients rely on you to ensure that their IT systems are secure and running smoothly, which means you must carefully vet and manage the vendors that provide the software, har......

As artificial intelligence (AI) solutions become increasingly prevalent in modern enterprises, it is vital to manage the risks associated with their implementation and ensure the proper allocation of intellectual property (IP) rights in AI contracts. This article will......

As MSPs strive to streamline their sales and contracting processes, many are turning to online contract management solutions that allow them to quickly and efficiently generate contracts, obtain electronic signatures, and manage the entire contract lifecycle. Request A ......

AI hardware plays a critical role in the deployment and management of AI solutions, providing the necessary processing power for compute-intensive tasks such as deep learning. In AI contracts, it is essential to clearly define AI hardware to ensure proper allocation of i......

AI tools and platforms are essential components of AI solutions, providing the software environment for developing, testing, deploying, and managing AI systems. In AI contracts, it is crucial to clearly define these tools and platforms to ensure proper allocation of inte......

AI algorithms are the foundation of AI systems, as they provide the means to train and generate AI models. As such, understanding AI algorithms, their ownership, and their implications in AI contracts is essential for safeguarding the intellectual property rights of both......

AI models play a central role in AI projects and contracts, as they form the basis for AI systems to process input data and generate output data. Understanding AI models, their ownership, and their implications in AI contracts is crucial for ensuring the proper allocatio......

Output data is a crucial aspect of AI contracts, as it represents the results generated by AI models and algorithms. Determining the ownership of output data in AI contracts is essential for protecting the interests of both parties involved. This article will discuss the......

Input data is a crucial component of AI contracts and projects, as it forms the foundation for AI models and algorithms to function effectively. Ensuring the protection of input data in AI contracts is essential for safeguarding the interests of both parties involved. ......

As artificial intelligence (AI) continues to revolutionize industries, intellectual property (IP) rights in AI contracts are becoming increasingly important. In this article, we will explore the process of identifying the IP in AI contracts and discuss strategies for pro......

Why MSP’s Should Align the Indemnity Section of the MSA with the Wrongful Act Definition in the Insurance Policy When entering into an IT services contract, it's important to make sure that the indemnity provision in the contract aligns with the definition of a wron......

Without a contractual provision to the contrary, ambiguous terms in a software license will be construed against the software publisher. Provided that there are no other business factors that would make litigation unwise, an ambiguous license agreement is the situation m......

I have been representing IT managed services providers (MSPS) for almost 20 years.  Years ago, I counseled my MSPS that it was necessary for managed services providers to present contracts to their clients for signature. Now we counsel our clients to collapse the sales ......

IT managed service providers (MSPs) are companies that provide a variety of IT services to their clients, including network management, data backup and recovery, and security. MSPs are often tasked with managing sensitive data, such as personal and financial information, and......

It's difficult to determine the best lawyers for MSPs (Managed Service Providers) because the best fit depends on a variety of factors, such as the specific legal needs of the MSP, its location, and its budget. However, some things to consider when looking for a lawyer f......

This article is for Managed Services Providers (MSPs) interested in learning about Scott & Scott's Contracts-as-a-Service solution. The cloud-based platform provides continuously updated legal protection to MSPs as new risks emerge. Scott & Scott's master templat......

One of the most common mistakes I encounter in software audits is what I call the post-effective date software buying spree. The buying spree occurs in response to a letter from a publisher or publisher's attorneys requesting a self audit. Many clients are discouraged to......

Over the past ten years regulation of data privacy and security has proliferated at the international, federal and state levels. Several industry-based federal regulations have been developed such as HIPAA for healthcare and GLBA for financial services. Other geographica......

Don't be in the dark on how to prepare and respond to software audits. An increasing number of companies face software compliance audits initiated by software publishers and their trade associations, such as BSA | The Software Alliance and the Software & Informati......

You offer your clients managed services that help them run and grow their business empires, but is it time for you to tear up your MSP agreement? In this moment in time when everything about business – and our lives – seems to be in flux, this is an important questio......

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It has been said that software is the new oil. It fuels the information revolution. And in this metaphor, software audits are the meters that measure the flow—and extract maximum revenue for software makers. The auditors arrive on your company doorstep to “true up”......

IT service providers that include early termination fees in their contracts must decide if they want to seek reimbursement when a customer terminates a contract early. MSPs find themselves asking: Is anything owed? Can I collect? What is the cost? Here are key points to cons......

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When a Managed Services Provider begins a relationship with a new client, it is important they agree on certain terms and conditions by which business will be conducted. This is known as the Master Services Agreement (MSA). These are the foundational terms that all busin......

What to include in your managed services customer agreement? ...

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How Managed Services Providers Can Mitigate Risks ...

Monthly recurring revenue and multi-year contracts have been the driving force behind managed services for years. They have been the basis for the tremendous growth in managed services over the years. The length of the term of a service agreement is very important as ......

The risks for Managed Service Providers are constantly evolving. New cyber threats and regulatory compliance requirements present significant challenges for MSPs. The most important way to mitigate privacy and security risks for Managed Service Providers is by including ......

Risk Considerations for Managed Services This past week I had the opportunity to present on the topic of managing risk in managed services to the OTX Roundtable.  I want the thank the OTX Roundtable and Mark Jennings in particular for inviting me to speak.  What follo......

If your business model involves hosting applications, websites or data, chances are that Microsoft will require you to obtain and follow a SPLA. Businesses that use Microsoft software for internal use only, or where third-party access is anonymous or unauthenticated, do not ......

I am a partner in Scott & Scott, LLP a firm that focuses on technology law matters in Southlake, Texas.  We represent companies accused of software piracy by industry trade groups such as the Business Software Alliance and Software Information and Industry Associati......

If your company licenses products to third parties under the Microsoft Service Provider License Agreement (SPLA), you may receive a request to perform a self assessment and provide a certification of compliance to Microsoft.  The SPLA self-assessment audit is a new audi......

If your company uses a Microsoft Service Provider License Agreement (SPLA)—and it probably does if Microsoft considers you to be in the commercial hosting business—you will be audited at some point. Typically, Microsoft SPLA customers are audited once every three yea......

Almost every business today operates with the support of digital tools. One survey put the number of companies investing in digital technologies to transform their business at an astounding 97 percent. Conducting business in this digital age means licensing software from......

Businesses that receive software audit demand letters from auditing entities such as the BSA or SIIA, or from software companies like Autodesk or Microsoft, often contend they cleaned up their network after receipt of the letter and should be released from any further obli......

As time passes, companies must engage in constructive solutions to move business and technology projects forward.  Many deals that were close to closing have been placed on hold and providers and customers are struggling to determine how the coronavirus pandemic will af......

Like most software publishers, Microsoft includes terms in its standard license agreements to restrict a licensee’s ability to resell or otherwise assign to another party the right to install or use software. Increasing the level of difficulty for IT groups trying to m......

BSA | The Software Alliance (BSA) is an organization that represents software companies and prosecutes alleged unlicensed use of those member companies’ software products.  The BSA generally initially sends a company a letter indicating the company may be out of complia......

I am an intellectual property attorney in Southlake, Texas who has handled more than 230 Business Software Alliance audit matters for small to medium-sized companies. For the last ten years, I have been representing end-user companies nationally in software audit matters......

Illinois is the first state to impose restrictions on the use of Artificial Intelligence by employers conducting video interviews.  The new Artificial Intelligence Video Interview Act (ACT) is the first of what I think will be many state and federal regulations targeted......

What Apple Card and Goldman Sachs Alleged Gender Discrimination Means for the Future of AI   When Apple launched its new credit card it partnered with Goldman Sachs to provide the underwriting for applicants.  Shortly after the launch, allegations of credit-limit di......

The concept of transparency in artificial intelligence has been debated extensively.  Transparent AI allows humans to understand the conclusions being drawn from AI algorithms.  Black-Box AI lacks transparency in that the conclusions drawn from algorithms are not expla......

Limitation of liability provisions place limits on the amounts that the parties would otherwise be able to recover in court.  For example, it is common in technology contracts for both sides to agree to waive the right to recover indirect, consequential, and punitive da......

Europe’s General Data Protection Regulation “GDPR” can play a major role in artificial intelligence projects.  Article 22 of the GDPR provides that data subjects have the right not to be subject to a decision based solely on automated processing, including profili......

If you provide commercial hosting services using Microsoft’s Service Provider License Agreement (SPLA), you may become a target of an ever-increasing variety of license audits from Microsoft and its vendors.  The latest flavor of a Microsoft SPLA audit is the verified s......

So far this year alone, about 80 companies have been assessed hefty fines—one as high as $201 million—for violating the requirements of the European Union’s General Data Protection Regulation (GDPR) Act. While most were cited for “insufficient technical and organ......

Microsoft’s Services Provider License Agreement (“SPLA”) is a popular licensing framework for businesses delivering hosted or rented software solutions to their customers. However, as with many software license agreements pertaining to resale or other business chan......

Modern financial history is chock full of embarrassing audit scandals, which caused executives and corporate brand names severe damage from intentional fabrication of revenues, or creating imaginary profits, or claiming assets that turn out to be a mirage. There’s a new......

Traditionally, software audits were conducted by gaining access to software installations and reviewing entitlements. Theoretically, if a customer is using a cloud product accessed by login credentials, then audits wouldn’t be an issue because the software publisher wo......

Software piracy audits conducted by the BSA and the SIIA threaten small and medium sized businesses. As the economy tightens, software publishers such as Microsoft, Adobe, and Autodesk hide behind software piracy enforcement groups to pursue customers accused of installing m......

Microsoft’s MSDN subscription licenses often create license compliance problems.  These problems arise because it is extremely easy to over deploy Microsoft software using MSDN media because it includes a vast array of Microsoft products with limited deployment controls.�......

One of the first steps we typically recommend to businesses facing software audits from any source is to try to estimate the financial exposure related to those audits. Doing so allows a company to allocate its resources more efficiently and to set aside reserves or make oth......

Use terms of Microsoft server products can be complex and difficult to interpret.  Microsoft SQL Server licensing rules for use in virtual environments demonstrate that a careful review of the use terms is necessary to avoiding copyright or contract violations. The current ......

I am a technology attorney in Texas specializing in software license transactions and disputes with the major software publishers including Microsoft, Adobe, Oracle and IBM. I represent some of the world’s largest corporations in enterprise software license transactions. I......

When I heard a Microsoft executive recently explain its new approach to software license compliance enforcement, I couldn’t believe my ears. Statements like, “Microsoft does not endorse audits,” and “Microsoft believes that most of its customers want to be in com......

IBM has begun a comprehensive program of compliance audits of its software clients. Scott & Scott’s clients have begun receiving letters from IBM Software Compliance demanding cooperation with a “routine assessment” of the client’s deployment of IBM software. Acc......

If your company has received a letter from the BSA | The Software Alliance requesting a software audit, you are probably wondering whether you should cooperate or ignore the request. I have been handling BSA cases for almost a decade and advise my clients to cooperate but to......