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Avoiding one-sided cloud service contracts

 

Avoiding one-sided cloud service contracts

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By Storage Asia Editors | Jun 25, 2012

 
What are some of the ambiguously-worded terms commonly used in cloud service contracts. What are the dangers of not defining them clearly?

Norton Rose: In addition to "downtime" and "up-time", "availability", "resolution time" and "response time" are examples of often ambiguously worded terms that are used in cloud service contracts. The danger of not defining terms clearly is the same with any other contractual term, namely that it leads to uncertainty and may allow the cloud service provider to avoid liability should a contingency event occur. From a customer's point of view, it creates a high level uncertainty as to exactly what the customer is paying for.
 
Is ownership of data and intellectual property rights (e.g., custom-built applications or data) automatically vested on the cloud service user? Under what circumstances will the customer lose them to their cloud service providers?

Norton Rose: The right to access and use the cloud service is usually granted through a licence arrangement between the cloud service provider and the customer. A customer would not automatically gain ownership of the intellectual property in the custom built applications through accessing the cloud service -- in fact, this would be extremely rare unless the customer had engaged the cloud service provider to develop a private cloud infrastructure for it.
 
There may be instances where a customer gains rights over certain intellectual property in the cloud computing service, but this is often limited to the interface modules or access portals and where the customer is heavily involved in and pays for the customization of the cloud computing service. Such rights need to be explicitly provided for in the cloud service contract and the usual default position is that the cloud service provider will own rights to all such intellectual property.
 
A customer will not lose ownership of data through the use of the cloud service and cloud service providers are unlikely to require ownership of a customer's data. The scope of the cloud service provider's access to and use of the customer's data is usually limited to processing and storing on the customer's behalf.
 
 
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