Saturday, March 17, 2007

CAIT Meeting

Bill Denny, Co-Chair of the Subcommittee on Corporate Aspects of Information Technology, passed along his notes from their meeting on Thursday:

The CAIT subcommittee had a highly dynamic and well-attended meeting. Don Cohn and Bill Denny, the co-chairs, gave brief presentations on IT issues in M&A Transactions. Don focused on the challenges of addressing electronic records in the Purchase Agreement and then implementing the transfer of such records. CAIT is building a checklist and commentary of IT issues in M&A transactions, which it intends to publish as a supplement to the M&A checklist published by the Negotiated Acquisitions Committee and to present at a Program in Spring 2008. A number of people volunteered to help develop parts of this checklist.

Steve Hollman and Dino Tsibouris gave a fast-paced overview of their exciting project on blogs, wikis and social networking in business communications. This Project has proposed a program for the ABA 2007 Annual Meeting as well as possible podcasts, and will package the materials for use by a speakers bureau. It also intends to develop sample business blogging policies to supplement previous publications covering employer internet policies. There was lots of interaction by the participants about the record retention challenges of these new methods of electronic communication.

Ariane Siegel explained her CAIT project of developing short form and long form data transfer agreements for cross-border transactions. These agreements will cover the collection, use and disclosure of personal information. The participants discussed the challenge of facilitating the transfer of data and keeping focus on the process. Don Cohn addressed another CAIT project relating to cybersecurity. It focuses on security holes associated with software, as economics drive the software market to push products out to customers and deal with problems later. Customers can deal with this through warranties, specifications, acceptance testing or indemnities, and the project will come up with sample contract provisions and discussion of ways the clauses do and do not address risk.

CAIT participants came up with several exciting ideas for new projects. Liz Blumenfeld suggested dealing with how corporations are dealing with virtual worlds such as Second Life. There seemed to be significant energy around developing corporate-related issues in this context. Another interesting new project would be to examine mass market licenses and ask what standards should be placed on vendors regarding the terms in these adhesion contracts. Questionable clauses include audit clauses, confidentiality clauses and indemnity clauses requiring licensees to indemnify for licensor's negligence. The project ties in with work being done by the subcommittee on Electronic Contracting Practices. Chris Kunz said this topic related closely to a Loyola LA symposium on contracting out of mandatory rules in the UCC. She is writing a paper for that symposium on the ethics of invalid and iffy contract clauses.

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