The sine qua non of today’s existence is a computer and its associated paraphernalia, irrespective of whether it is desk based, lap based or palm based. For many of us, the mere thought of a life without cell phones (smart or otherwise), tablets, laptops and desktops would leave us clueless for sometime at least. Though we may not die, as our life is not thoroughly dependent upon them, yet certain emptiness, disorientedness, sense of helplessness, being a cripple may be the dominant emotion.
Imagining a life without facebook, twitter, skype and many such apps (short for ‘application’, which has been dismembered to cater to the needs of Netizens) for many of us is now simply unthinkable. We not only work but also connect with our friends, exercise our right to free speech, shop, pay our bills etc. through these innovations of the modern age.
The objective of this entirely introduction is to simply put the things into perspective regarding the extent of our dependence on a two-word expression, which has collectively come to be identified: ‘information technology’.
With the advent of computer and later the Internet, the world, constituted by countless people like us, entered into a new age of existence. In this age of largely virtual existence, revolutions are being facilitated over the Internet through social media. Today’s government is at a loss to figure out as to how to impose virtual 144 (S. 144 CrPC, which has become a metaphor for controlling civil disturbance/unrest and tool in the hands of state to wade out of troubled waters). And to my mind, the ability of the state to simply shun away any inconvenient gathering is gone away as the rulers may impose it in the real world but cannot completely do so in the virtual world because the sovereign attribute of the state is diminishing very fast in globalisation. In short, it can be said that it is the most defining and inevitable turn in the human history. Having stated the importance of “can’t do without it” nature of this phenomenon, it is equally true that at the end of the day, we are real people with real desires so whatever we try to do and achieve in real world, we also attempt to achieve in virtual world as well. It includes from mere communication, to commerce, to organising debates, discussion etc. over the important issues of the day which may snowball into a full-fledged rebellion as was witnessed during Arab spring or Anna Hazare moment of India, to indulge in criminal activities like cheating, thievery and finally waging wars by one state against another. This list can be endless but a virtual world is created to fulfil our desires and purposes like the real world.
And like the real world, virtual world also needs to be nurtured but at the same time, it brings us to the safety, security, contractual and regulatory issues. Before we move into all these issues, it would be worthwhile to first dwell a bit on the information technology industry, which is the enabler of this virtual world.
The global economic slowdown has also affected the IT and ITes industry and even in such times of declining profit margins, remaining profitable is a big achievement in itself. Yet the fact cannot be forgotten as described in an Economic Times report that during 2013, operating margins of the Indian IT Industry may ‘remain under pressure and decline moderately’. The report outlines various factors for this decline but the most important is higher costs as the industry has not only to hire more employees at client locations in the US and Europe but also has to concede the demand for ‘deeper discounts’ by their customers, ‘especially as large technology outsourcing contracts worth several billions of dollars come up for renewal’. Besides the changed client demands and expectations, there is a greater competition amongst Indian companies including increasing competition from upstarts which could potentially deliver the same services at lower costs. The report also talks about shorter contract lengths which ‘…will also lead to higher customer attrition rates in the year apart from impacting margins due to higher client acquisition costs than in 2012’.
The Indian IT entrepreneurs and the conglomerates have not only been the proverbial but that rare son has brought riches to the country and also brought fame & global recognition to the nation. Ever since the liberalisation of the economy in 1991, the world has seen the excellence of the Indian IT Industry. How++ever, with the passage of time, the competition has grown within and without; profit margins are in a steady decline and so on and so forth as stated above. The only way forward to arrest this declining trend is to move up the value chain by not only investing heavily into emerging technologies like data analytics, cloud computing, mobility solutions but also to embrace automation to cut costs which in itself is quite challenging.
As people carry their propensities to the virtual world, the new turf for fighting wars without bloodshed is cyber world. It can be devastating for all aspects of the existence as the technology finds newer ways of becoming a part of our daily lives right from doing business to ordering flowers to gaming and doing all other innumerable things. So is the threat from rogue elements and the latest incident of such threats being carried out has been ‘Bazooka’ in the last week of March. Described as the largest cyber attack, it was essentially ‘a denial of service attack, which bombards sites with traffic in an effort to isrupt’.
Indian Computer Emergency Response Team (CERT-In) and Data Security Council of India (DSCI) are the two premier institutions which are dedicated to the cause of cyber security and other facets of data protection. While CERT-In is department of electronics and information technology body within the ministry of communications and information technology, DSCI, to use their own description, ‘is a focal body on data protection in India, setup as an independent Self-Regulatory Organisation (SRO) by NASSCOM, to promote data protection, develop security and privacy best practices & standards and encourage the Indian industries to implement the same’ for ‘IT/BPO industry, their clients worldwide, Banking and Telecom sectors, industry associations, data protection authorities and other government agencies in different countries’.
As a counter measure to ‘cyber crimes getting more and more organised resulting in an underground economy aimed at disrupting the growth of the nations’, DSCI has come up with Law Enforcement Interface Programme (LEIP) to deal with the issues of need for support of law enforcement agencies for crime investigation and post incident actions.
The technology agreements unlike normal agreements are different for its unique situation. It requires commercial legal and technical understanding to fully capture the various rights and liabilities of the parties thereto. As per Andrew Martin, of Scott & Scott, Technology Attorneys, “Many of these agreements appear to be based on outdated templates that were customised by someone with an incomplete understanding of the unique risks associated with the technology…”. According to him, the top five important provisions in Technology Vendor Agreements must be included:
For either party, it is vital to delineate who owns what. In general, customers should always own their contents and deliverables associated with any development work they pay for as a “work for hire.” Vendors should always own the technology and deliverables they bring to the table but these are generalities. Both parties should take the time to understand the deliverables, the technology, and the deal and make sure the IP ownership provisions accurately reflect the understanding.
If the agreement involves software licensing, the publisher often will ask for the right to audit the customer. The customer should read and understand the requirements and should push back when the publisher demands potentially burdensome audit rights. Ideally, the vendor should be satisfied with simply to demand periodic self-audits from the customer.
Cyber coverage is triggered when there is a data breach event and will cover expenses that are not otherwise protected under a typical professional liability policy. Both parties will benefit from the vendor maintaining this generally affordable coverage.
It is an absolutely critical benefit for the customer. The vendor should be able to warrant that it has not infringed on a third party’s intellectual property rights. If it does, and if the customer is sued, then the vendor must step in and cover the costs and expenses related to such action. Customers should be hesitant to enter into any agreements without this protection.
Limiting assignment of the agreement in some circumstances, especially when software is involved, is reasonable. However, it is important to be able to assign these agreements in the event of a merger, acquisition, or other similar event without requiring the consent of the other.
The Confederation of Indian Industry (CII) President and Infosys Technologies’ Co- Chairman, S. Gopalakrishnan in an interview to Business Standard responded to a very pertinent question which is so critical for the future well being of the panting warhorse i.e. the IT Industry in India with the sunset clause on the Software Technology Parks of India (STPI) scheme coming soon, what will be the future of the IT (information technology) industry in India? He responded very positively to that saying, “The government has announced a SEZ (Special Economic Zones) policy which helps not just the IT industry but any company, which wants to do business. We have been demanding specific incentives for start-ups. We are broadening the concept of start-ups to cover not only IT but across sectors.” So I believe this openness and entrepreneurial zeal demonstrated by Mr. Gopalakrishnan contains the key to the woes of this panting warhorse.
www.grandmasters.in | 8 Years & Counting
www.rcls.in | 8 Years & Counting
www.itlegalsummit.com | 8 Years & Counting
www.bfls.in | 8 Years & Counting
www.maels.in | 8 Years & Counting
www.plcs.co.in | 8 Years & Counting
Copyright © 2020 Lex Witness - India's 1st Magazine on Legal & Corporate Affairs Rights of Admission Reserved
