Saturday, July 23, 2005

New ABA Project: Model Electronic Data Agreement for Third-Party

The Electronic Commerce Subcommittee of the ABA's Committee of Cyberspace Law is sponsoring a new project: The drafting of a Model Electronic Data Agreement for Third-Party Service Providers. Introduced at the Spring Meeting in Nashville, this project is now ready to be taken to the next level at the Ecommerce Subcommittee Meeting in Chicago on Saturday August 6th. You are invited to participate.

This Model Agreement will cover third-party providers that transmit, store, or transform unencrypted electronic data for one or more trading partners. The Model Agreement is intended to be industry- and technology-neutral, but structured to easily incorporate requirements unique to any industry or technology.

The Model Electronic Data Agreement for Third Party Service Providers will complement the 1990 "Model Trading Partner Agreement," which is used in relationships between trading partners using electronic data interchange (EDI). The new Model Electronic Data Agreement will govern third parties hired by one or both of those trading partners and would address the emerging use of XML electronic transactions.

Issues To Be Addressed
The scope of the model agreement will be determined by the Electronic Commerce Subcommittee. However, it is expected that the drafters will consider issues such as:
(1) standards or warranties applicable to services;
(2) permitted and prohibited use of electronic data;
(3) ownership of data;
(4) differentiating a third-party provider's duties to its customers from its duties to other
trading partners who may have no privity of contract with the third-party provider but whose data is held by the third-party provider;
(5) security standards;
(6) implications of Sarbanes-Oxley; and
(7) liability issues.

A Balanced Perspective Needed
This project will succeed if it attracts project members who have experience representing third-party service providers, trading partners who hire third-party service providers, and trading partners whose data is held by third-party providers not hired by that trading partner. All three perspectives are needed in order to produce a balanced Model Agreement that will gain acceptance in commercial use.

Work Plan
The Subcommittee plans to distribute a "talking paper" in advance of the annual meeting of the ABA in Chicago (August 5-9) and to discuss the draft at a Subcommittee meeting at the annual meeting. Although your attendance is by no means required in order to participate in this project, if you are able to make arrangements to attend, it would be constructive to have as any participants as possible at the August meeting.

How to Sign Up
We welcome your participation in this project. If you would like to participate, contact either of the persons listed below. Also seriously consider attending the August meeting in Chicago
(register at ).

Phillip Schmandt
McGinnis, Lochridge & Kilgore, LLP
1300 Capital Center
919 Congress Avenue
Austin, Texas 78701
Phone: (512) 495 - 6087

Christina Kunz
William Mitchell College of Law
875 Summit Ave.
Saint Paul, MN 55105-3076
Phone: (651) 290 - 6340

More Detailed Descriptions
Copies of the original project proposal and a preliminary outline of possible issues will be available by link soon. We distributed both documents at the ABA Section of Business Law Committee meeting in Nashville in April 2005. Both remain subject to change based on the direction of the Electronic Commerce Subcommittee.

Elaine D. Ziff
Intellectual Property & Technology Group
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
(212) 735-2656 (Telephone)
(212) 735-2000 (Facsimile)
EZIFF (Email)

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