Tech & Sourcing @ Morgan Lewis

Our recent blog post, The Rise of Next-Gen Business Process Outsourcing, highlighted the importance of understanding the exciting opportunities and the challenges of next-gen business process outsourcing (BPO) in order to effectively negotiate contract provisions that maximize the benefits of next-gen BPO and minimize the risks. In this blog, we take a look at a few key issues to consider when developing and negotiating a next-gen BPO contract.

The recent rise in popularity of generative AI–powered applications such as ChatGPT poses important copyright issues for individuals and businesses with respect to content creation, including the scope of rights with respect to commercial use, content publication, potential liability for infringement, and content enforcement.

The UK government published its first National Quantum Strategy (the Strategy) on March 15, setting out £2.5 billion (over $3 billion) in funding quantum research and naming a quantum computing industry as a strategic priority for the United Kingdom. The following day, the science and technology committee of the UK House of Commons (the Committee) announced a new inquiry on turning quantum technologies into commercial products. As quantum-focused startups proliferate, UK policymakers are demonstrating their intent to enable early-mover advantages in the sector.

The UK government published a white paper on March 29 setting out a “pro-innovation” UK regulatory framework for artificial intelligence (AI). The framework centers upon five cross-sectoral principles, of which implementation will be context-specific to the use of AI, rather than the technology itself. The government does not propose introducing a new regulator or any new legal requirements on businesses, instead leveraging existing powers of UK regulators and their domain-specific expertise.

The use of open-source software (OSS) is ubiquitous. Depending on what license governs the type of OSS a company uses and how it uses the OSS, OSS use impacts the valuation of the intellectual property (IP) used by a company or transferred in a merger or acquisition (M&A). Thus, OSS-related representations and warranties have become an integral part of the IP representations and warranties in M&A transactions and financings.

The European Union’s General Data Protection Regulation (GDPR) requires companies to monitor and comply with some of the strictest privacy laws in effect. Now, the European Commission is refocusing efforts and oversight on ongoing investigations under the GDPR. Going forward, companies may want to focus even more intently on their compliance as the EU steps up investigatory procedures.

The decision to terminate an agreement cannot be taken lightly. In exercising the option, understanding the key terms of the agreement and necessary steps to effectuate the termination are critical. As we have previously highlighted in past Contract Corners, termination provisions may include a variety of mechanisms built into them and one cannot assume that all termination provisions require the same steps to be taken. When considering a termination, a party must take the time to assess the actual termination rights under the agreement, what, if any, notice period will apply, and whether the termination will result in any payment or other obligations.

Please join us on Tuesday, February 7, 2023 at 11:30 am to 12:30 pm ET as Morgan Lewis partners Richard Lee, Randy Wood, and Nancy Yamaguchi provide a summary of significant market trends in M&A in the technology sector.

In 2023, many companies are looking to get ahead of the issues that are expected to shape the next few years. In our industry outlook, “The Trends—and Traps—That Will Shape 2023,” our lawyers provide a high-level overview of what’s in store for various global industry sectors, highlighting some of the top tech trends and global regulatory developments.

As we reach the end of the year 2022, we have once again compiled all the links to our Contract Corner blog posts, a regular feature of Tech & Sourcing @ Morgan Lewis. In these posts, members of our global technology, outsourcing, and commercial transactions practice highlight particular contract provisions, review the issues, and propose negotiating and drafting tips.