The State of Cloud Computing Can Be Taxing – Want to Understand Why?

Back in June 2010 – more than a year ago – we announced the launch of a new Rimon initiative focusing on Cloud Computing (see ‘Transcending the Cloud’ – Rimon Announces White Paper Series & Legal Initiative on Cloud Computing),showcased with a series of individual and topical white papers, in time being compiled into a comprehensive work entitled, “Transcending the Cloud: A Legal Guide to the Risks and Rewards of Cloud Computing.” As most of you know, this brave new world, with new providers, new economic models, new access plans, and broadened capabilities, has grown, and over the past year we have released nine individual white papers, with more on the horizon and updates to existing papers as the legal and technology environments evolve. One of the first in our series was a paper on the state tax implications of cloud computing entitled: “Pennies From Heaven.”

Just letting you know our State Tax Practice is hosting a Rimon teleseminar on recent developments in state taxation on the subject, and you can view the invitation and sign up through the registration link on the invitation. Just head to: “Clouds, Codes and Crunching Numbers: An Update on Current State Multi-State Tax Development and Trends in the Taxation of Electronic Goods and Services” and sign up today!

Of course, make sure you subscribe via email or get the Legal Bytes RSS Feed so you are always in touch with our latest information; and if you have any questions about our Cloud Computing initiative or need help, feel free to contact me, Joe Rosenbaum, or the Rimon attorney with whom you regularly work. We are happy to help.

Transcending the Cloud – Advertising & Marketing Make Rain

This post was written by Joseph I. Rosenbaum and Keri S. Bruce.

As part of our ongoing commitment to keeping abreast of legal issues, concerns and considerations in the legal world of cloud computing, most of you know we have been publishing regular topical updates to our Cloud Computing initiative – new chapters and white papers intended to provoke thought, stimulate ideas and, most of all, demonstrate the thought leadership Rimon attorneys bring to bear when new and important trends and initiatives in the commercial world give rise to new and interesting legal issues. If you didn’t know, re-read the previous run-on sentence!

So here, from Joe Rosenbaum and Keri Bruce, is a glimpse at some issues that apply to the world of advertising and marketing arising from Cloud Computing. This next chapter in Rimon’s on-going series, “Transcending the Cloud: A Legal Guide to the Risks and Rewards of Cloud Computing,” is titled “Cloud Computing in Advertising & Marketing: Looking for the Silver Lining, Making Rain.” This white paper tries to examine the considerations and concerns that arise within the advertising and marketing industries in the wake of complex and evolving regulation and scrutiny. We hope it provides some insight into the issues and the factors that apply, even as the industry and the regulatory landscape continue to evolve.

As we do each time, we have updated the entire work so that, in addition to the single "Advertising & Marketing" services’ white paper, you can access and download a PDF of the entire “Transcending the Cloud: A Legal Guide to the Risks and Rewards of Cloud Computing” compendium, up to date and including all the previous chapters in one document.

Of course, feel free to contact Joe Rosenbaum or Keri Bruce directly if you have any questions or require legal counsel or assistance related to advertising and marketing. Make sure you subscribe via email or get the Legal Bytes RSS Feed so you are always in touch with our latest information. And if you ever have questions, you can always contact any Rimon attorney with whom you regularly work.

Cloud Computing – Clouds Can Sometimes Be Storm Clouds

This post was written by Joe Rosenbaum and Adam Snukal.

Among others news publications, CNN Money just recently reported that Amazon.com’s cloud-based Web service EC2 suffered a “rare and major outage” this past Wednesday that affected several online sites it supports, including Reddit, HootSuite, Foursquare and Quora. Amazon.com hosts many major websites on its servers through its cloud-based service and, in total, “[t]housands of customers hitch a ride on Amazon’s cloud, renting space on its servers.” The recent outage crashed several customer sites and created glitches of varying degrees on others.

As cloud-based Web services have proliferated, the risks associated with major outages for companies dependent on cloud-based services have become a reality. This recent outage, and potentially others like it, could create reputational risk not only to the cloud providers, but also to those who use the cloud computing services of those providers for their technology infrastructure – processing, applications and data – exposing them to contractual liabilities for failure to meet promised service levels, breaches of performance representations and warranties, and even potential security and data breaches. All these and more, possible legal and contractual problems arising from the use of and reliance on cloud computing. These potential risks should be eliminated or mitigated, and while contracts cannot always guarantee operational integrity or performance, they can provide indemnities and remedies that offer a measure of protection or mitigation in many circumstances.

Rimon has been at the forefront of cloud computing legal thought-leadership and risk-mitigation strategy for our clients. Our lawyers have significant U.S., international and multinational experience in implementing strategies, such as service level agreements and risk-mitigating tools that help limit risks associated with cloud-based computing and cloud service outages. Indeed, to appreciate the risks, one need only look to one of the very first articles by Rauer Meyer, entitled When the Cloud Bursts – SLAs and Other Umbrellas, drawn from Rimon’s on-going series – one that you can view or download entirely in up-to-date form – entitled “Transcending the Cloud: A Legal Guide to the Risks and Rewards of Cloud Computing.” You can access and download a PDF of the individual article or the entire “Transcending the Cloud: A Legal Guide to the Risks and Rewards of Cloud Computing” compendium, up to date and including all of the previous chapters in one document.

Of course, feel free to contact Christopher G. Cwalina or Daniel Z. Herbst or Joe Rosenbaum or Adam Snukal (or the Rimon lawyer with whom you normally work) if you have any questions or require legal counsel or assistance. Make sure you subscribe via email or get the Legal Bytes RSS Feed so you are always in touch with our latest information.

Darwin Was Right. It’s All About Biology!

I have been stupid. It’s everywhere and I couldn’t see it. I’m looking at trying to invest my hard-earned dollars and wondering about the future of mobile and social media and technology. Hmmmm, maybe I should pour some money into that sector of the economy. But how to decide – price-to-earnings ratio, market multiple, return on equity, assets, sales? Then it dawned on me. Shhhh .. . I’ll let you in on a secret I discovered. It’s biology – natural selection, evolution, survival of the fittest – Charles Darwin was right.

Think about it. Sony says "It’s in our DNA." Twitter is for the birds. Social media is in your Face(book). Think it stops there? No way. Apple – the original sin. Gone viral – my anti-virus software has been in use for years. Make a firewall to stop it from spreading. Cookies? Baked to perfection! Who gives a Hoot(suite)? Oh and if you think the Droid or Android are not part of the mix, just watch Star Wars for those artificial parts, artificial intelligence and artificial sweeteners. 

My blog has gone viral along with YouTube videos. Word of mouth marketing – even the blog conjures up images of Steve McQueen in a very old movie ("The Blob"– who remembers, raise your hands). Hear the buzz – not the sound of bees, but rather the web browsers. Firefox? How about the wireless photographic memory cards from Eye-fi? Did I mention cloud computing – is that cloud 9 or should I get off my cloud as the Rolling Stones asked me to do many years ago?

Not convinced yet? Just the other day researchers at IBM announced that they have developed a nanoparticle that has the ability to target and destroy bacteria that has otherwise proved to be resistant to antibiotics. Now I originally thought a nanoparticle was something harvested from Ork, the planet made famous by Robin Williams in the television series "Mork & Mindy." But apparently, nanoparticles are itsy bitsy particles, so small you could fit tens of thousands of them on the head of a pin.    

So all you investment advisors, financial analysts, brokers and day traders, watch out. Pick the biologically named company of choice or, better yet, start a company, and watch it evolve, grow, mature and hopefully not crash before I sell. I personally am not surprised that Jim Beam has been around since 1795! 

Transcending the Cloud – Financial Services: Show Me the Money!

This post was written by Joseph Rosenbaum, Adam Snukal and Leonard Bernstein.

Welcome to the New Year. As they do each year, clouds, together with some sunshine (and a cold winter blast periodically in our Northern Hemisphere), roll in, too.

Last year we published a number of topical updates to our Cloud Computing initiative – new chapters and white papers intended to provoke thought, stimulate ideas and, most of all, demonstrate the thought leadership Rimon attorneys bring to bear when innovative and important trends and initiatives in the commercial world give rise to new and interesting legal issues.

So here, from Adam Snukal, Len Bernstein, and Joe Rosenbaum, is a glimpse at some issues that apply to the world of financial services arising from Cloud Computing. This next chapter in Rimon’s on-going series, “Transcending the Cloud: A Legal Guide to the Risks and Rewards of Cloud Computing,” is titled “Look, Up in the Cloud, It’s a Bird, It’s a Plane, It’s a Bank.” This white paper examines the issues that arise within financial services institutions in the wake of complex and evolving regulation and scrutiny, and we hope it provides some insight into the considerations and concerns that apply, even while the industry and the regulatory landscape are still evolving. A special note of thanks to Anthony S. Traymore, an Advertising Technology & Media associate and a good friend and colleague, who has now joined the legal department of a Rimon client. Anthony was instrumental in helping put the initial topical white paper draft together while at Rimon, and we like to give credit where credit is due – both here and in the white paper itself. Thanks Anthony.

As we do each time, we have updated the entire work so that, in addition to the single “financial services” white paper, you can access and download a PDF of the entire “Transcending the Cloud: A Legal Guide to the Risks and Rewards of Cloud Computing” compendium, up to date and including all of the previous chapters in one document.

Of course, feel free to contact Adam Snukal, Len Bernstein or Joe Rosenbaum directly if you have any questions or require legal counsel or assistance related to financial services. Make sure you subscribe via email or get the Legal Bytes RSS Feed so you are always in touch with our latest information. And if you ever have questions, you can always contact any Rimon attorney with whom you regularly work.

Net Neutrality? Much Ado or Nothing To Do?

Here is how Wikipedia (as of January 4, 2011) defines "Network neutrality":

"Network neutrality (also net neutrality, Internet neutrality) is a buzzword used to describe a principle proposed for users’ access to networks participating in the Internet. The principle advocates no restrictions by Internet service providers and governments on content, sites, platforms, the kinds of equipment that may be attached, and the modes of communication." The Wikipedia article, which goes on for pages, and with more than 100 footnotes and citations, then says, "The principle states that if a given user pays for a certain level of Internet access, and another user pays for the same level of access, then the two users should be able to connect to each other at the subscribed level of access."

Now I confess. Lawyers are often accused of writing 1000 word manifestos and calling them "briefs," but I have read and re-read the definition and the ensuing pages of "clarification." I’ve paid attention in the media and to learned articles. I have no clue what "net neutrality" means. I do, however, take comfort in the fact that if you read the Wikipedia article, and dozens, if not hundreds of other articles, you will see that nobody really has a well-defined meaning of what "net neutrality" is.

But good news. I think I know why all of this confusion exists. It’s actually pretty simple. Take the words apart. When you think of the Internet and World Wide Web – references now include wireless and mobile as part of this amorphous, nebulous cloud (oops, another buzzword) – it’s simply hard to define. It is dynamically evolving. It has features, functions and uses that morph almost daily. The devices change. The transmissions change. "Internet" has different meanings for different people, from different perspectives, at different points in time, and even the names and categories of parties injecting themselves into the debate are changing.

Then there’s "neutrality." What does that mean? Switzerland is neutral. Is it? Everybody on board? Any questions? Good. We all know what that means – especially when referring to the Internet. Right? Technology? Economics? Pricing? Access? Shall we go on? I think not. Perhaps government regulators use the term "neutrality" because it is a term often applied to conflict – wars. Perhaps there is a war going on. A turf war over which government agency gets to control what and who and where and when – not to mention who wants to tax it. Darn, I promised not to mention taxes.

In recent years, the FCC has sought to take the lead in being an advocate for "net neutrality," despite having its share of difficulties with the courts. Undeterred, in December, the FCC released a new report proposing "net neutrality" – a proposal to regulate the Internet. [See, e.g., cnet news article FCC makes Net neutrality rules official.] Remember how easy it is to define the Internet? The vote was hardly unanimous: 3–2. Have you read the FCC document? Almost 200 pages. The legal standard for regulation: "reasonableness."

Now I confess I did start to salivate reading the report. Think about it. We are lawyers. Who wants certainty? Think of all the litigation and dispute, the angst, the risk memoranda, and the frantic consultations that might be avoided if there was certainty. No, no, who am I to call for clarity.

The discussion reminds me of a wryly humorous tale of an architect, engineer and lawyer, all debating what profession the Lord would have chosen. The architect extols the talent necessary to envision and lay out detailed plans for the creation of heavens and earth and everything within – surely a task for an architectural genius. "Nay," cries the engineer. The greatest master builder that ever was and ever will be. "Who else could possibly build such glorious work? Who else could bring such magnificent order out of such utter and sheer chaos?" exclaims the engineer. Quietly the lawyer looks up and whispers, "First and foremost, the Lord would have been a lawyer." Quizzically, the two peer over at the attorney for an explanation. The lawyer lowers the reading glasses and whispers, "Who else could have created such utter and sheer chaos?"

So I’m risking my own self-interest to say, please, FCC Chairman Genachowski and all the others at the FTC, the Department of Commerce – I’m not even going to go overseas for this one. Please end the meaningless war over what, who, why, how, where and when the Internet needs to be controlled in order for it be "neutral." Stop! Nobody knows what you mean or what it means. Change words. Change focus.

How about "net vitality"? Worry about innovation. Encourage competition. Stimulate commercial robustness. Protect the helpless, the vulnerable – intervene where you must, no argument. But IMHO, in this case, less is more. Bayless Manning, former Dean of Stanford Law School and past president of the Council of Foreign Relations (although in a different context), summed up the problem best when he noted, "As batting averages are to baseball players, stars to restaurants, ribbons to generals and stock price to corporate executives, so new statutes are at the heart of the scorekeeping system by which legislators are measured and measure themselves. No legislator ever gained renown as a great non-law giver." Perhaps this too can change.

Looking Ahead to 2011: If Brevity Be the Soul of Wit

A line recited by Polonius in Shakespeare’s Hamlet (1602) comes to mind today. It’s the phrase "since brevity is the soul of wit . . . I will be brief." FYI, Polonius is a windbag in the play. There is also another phrase, often wrongfully attributed to Franz Kafka, that goes something like "lawyers are the only creatures that can write 1000 pages and call it a brief."

Well, here we are at the end of 2010. Those of you who have been reading faithfully know that each year, I create a Legal Bytes piece with no hypertext links to distract you; no citations; no dazzling factoids; and no breaking news stories. This time, I’ve decided to do something different. I am going to be brief. Instead of philosophy or predictions, I’m going to give you 10 words I believe may stimulate YOUR thinking about 2011. That’s it. I trust you. Most of you are sharper than I anyway.

You don’t have to buckle up or fasten your seat belts. Pull up a chair, open your BlackBerry, Kindle, Droid, iPhone, PC, Laptop, Netbook, Web-TV, PDA, Tablet or whatever your favorite Legal Bytes’ reading device might be; grab an espresso, a glass of tea (or whatever your liquid of choice might be); sit back and enjoy. Here goes:

  1. Mobile
  2. Behavior
  3. Privacy
  4. Social
  5. Cloud
  6. Neutrality
  7. Monetize
  8. Consolidate
  9. Engagement
  10. Global

That’s it. Oh, there is another word – profile – but that’s the subject of my first Legal Bytes blog for 2011. You will just have to come back for it!

 

Happy Holidays and Best Wishes for 2011!

Transcending the Cloud – Tying Up Cloud Antitrust Issues in a Bow

As you know, we have been updating our Cloud Computing initiative with a consistent stream of information – new chapters and white papers intended to provoke thought, stimulate ideas and, most of all, demonstrate the thought leadership Rimon attorneys bring to bear when new and important trends and initiatives in the commercial world give rise to new and interesting legal issues. Often, especially when words like “privacy” and “security” are thrown about, it becomes easy to overlook some of the other issues lurking in the background.

So here, from Jeremy D. Feinstein, is a glimpse at some antitrust issues. This next chapter in Rimon’s on-going series, “Transcending the Cloud: A Legal Guide to the Risks and Rewards of Cloud Computing,” is titled “Tying Up the Cloud,” and seeks to give you some insights into the potential antitrust and competitive issues that even customers should be aware of, if not concerned with, when considering entering the cloud.

As we continue to do, we have updated the entire work so that, along with the single chapter on “Tying Up the Cloud” applicable to antitrust, you can now access and download the PDF of our complete “Transcending the Cloud: A Legal Guide to the Risks and Rewards of Cloud Computing” compendium, up to date and including all the previous chapters in one document.

Feel free to contact Jeremy D. Feinstein directly if you have any questions or require legal counsel or assistance related to competition or antitrust. Make sure you subscribe via email or get the Legal Bytes RSS Feed so you are always in touch with our latest information. Of course, if you ever have questions, you can contact me, Joseph I. (“Joe”) Rosenbaum, or Adam Snukal, or any Rimon attorney with whom you regularly work.

Transcending the Cloud – Cloud Coverage (Insurance for a Rainy Day)

As part of our Cloud Computing initiative, we promised to tackle some issues that have seen little coverage elsewhere and can often be overlooked in the “technological” arena. Here is a look at the insurance coverage issues representing our next chapter in Rimon’s on-going series, “Transcending the Cloud: A Legal Guide to the Risks and Rewards of Cloud Computing.” This White Paper and Chapter takes a look at the insurance coverage implications of cloud computing, and is aptly titled “Cloud Coverage.”

We would like to thank Richard P. Lewis and Carolyn H. Rosenberg for their thoughtful and practical insights and effort. Feel free to contact them directly if any questions arise or if you need help or more information. As we continue to do, we updated the entire work so that in addition to the single chapter on “Cloud Coverage,” you can access the PDF of our “Transcending the Cloud: A Legal Guide to the Risks and Rewards of Cloud Computing” compendium, receiving a complete update, including this one on insurance coverage.

Make sure you subscribe via email or get the Legal Bytes RSS Feed so you are always in touch with our latest information. Of course, if you ever have questions, you can always contact me, Joseph I. (“Joe”) Rosenbaum, or Adam Snukal, or any Rimon attorney with whom you regularly work.

Transcending the Cloud – The German Perspective

As part of our Cloud Computing initiative entitled, we take a step over to Europe and proudly present our next chapter in Rimon’s on-going series “Cloud Computing – A German Perspective.” This white paper and chapter, takes a look at cloud computing from a German and, to some extent, potentially representative European perspective. It’s a refreshing look at both some legislative and regulatory implications, as well as a view from outside the United States.

We would like to thank Thomas Fischl and Katharina A. Weimer in our Rimon Munich office for their insight and effort. Feel free to contact them directly if any questions arise or if you need help or more information. As we continue to do, we updated the entire work so that when you access the .PDF of our “Transcending the Cloud: A Legal Guide to the Risks and Rewards of Cloud Computing” compendium, you will receive all of the sections, now updated with this chapter from Germany.

Make sure you subscribe via email or get the Legal Bytes RSS Feed so you are always in touch with our latest information. Of course, if you ever have questions, you can always contact me Joseph I. (“Joe”) Rosenbaum, Adam Snukal, or any Rimon attorney with whom you regularly work.