Taft Technology Insights

Updates and Analysis from Taft Technology Attorneys

When an ERP software system implementation fails, sometimes it’s because the vendor told a potential buyer that its round peg would fit into the user’s square hole in order to make the sale. But maybe even more often, the failure is because the integrator either did not fully understand the user’s industry or business, the client’s relationship with its supply chain, customers and employees, or how the digital transformation was intended to improve corporate performance. As an ERP software system attorney who has litigated disputes between users and integrators, we’ve learned from experience that many of the larger integrators are…
Offer and Acceptance . . . by Inquiry Notice.  This is not a traditional understanding of contract law, but then again, Internet sites do not always provide traditional contracts.  Recently, a district court cited 9th Circuit precedent in deciding that because an online user had “at least inquiry notice of his need to comply with the Terms in using the website, and he continued to use the site knowing he was bound by the Terms, the user accepted the Terms by using the site.” Gutierrez v. FriendFinder Networks Inc., No. 18-CV-05918-BLF, 2019 WL 1974900, at *8 (N.D. Cal. May 3,…
The U.S. government no longer has the authority to bar federal trademark registration for words or symbols that it determines to be immoral, obscene, vulgar or profane. On Monday, June 24, 2019, the U.S. Supreme Court (the Court) struck down a longstanding federal prohibition on the registration of “immoral or scandalous” trademarks, holding that such a prohibition violates the First Amendment right to free expression. By a vote of 6-3, the Court found in favor of Erik Brunetti, the founder of the clothing line brand FUCT. In 2011, Brunetti sought federal registration of the trademark FUCT. The U.S. Patent and…
About 20 years ago, commercials for a food product used the tag line “It’s not nice to fool Mother Nature.” By mid-June, 2019, the line was adaptable to warn, “It’s not nice for a software vendor to fool a state government.” In yet another example of a software vendor’s sales team overpromising and underdelivering with the result costing the State of Maryland millions of dollars, IBM and its subsidiary Curam Software, shelled out nearly $15-million to settle a lawsuit over the botched website the defendants were hired to build for the health department’s insurance exchange under the Affordable Care Act…
The Supreme Court of the United States has granted certiorari in Georgia et al. v. Public.Resource.Org, Inc., case number 18-1150, to address whether state statutory codes, including annotations, are protectable by copyright. In October 2018, the 11th Circuit held that the annotations, while not having the force of law, were sufficiently law-like to be regarded as sovereign works constructively authored by the People, and thus were not copyrightable. Code Revision Comm’n for Gen. Assembly of Georgia v. Public.Resource.Org, Inc., 906 F.3d 1229 (11th Cir. 2018), cert. granted sub nom. Georgia v. Public.Resource.Org, Inc. (U.S. June 24, 2019). As the court…
Law360 published an article recently with the title, “DoD Official Says Cyber is an Allowable Contractor Cost.” The article states that the U.S. Department of Defense (DoD) will allow defense contractors to treat the costs of bringing their cybersecurity programs in line with DoD requirements as an allowable cost and, therefore, reimbursable. Specifically, at the June 14, 2019 Professional Services Council’s Federal Acquisition Conference, DoD special assistant for cybersecurity Katie Arrington said, “security is an allowable cost.” Further, Law360 reported that in May, DoD said it was developing a “Cybersecurity Maturity Model Certification” (CMMC) program to build on the Defense Federal Acquisition Regulation…
Corporate financial wizards are expert at creating realistic expense budgets that project exactly how much will be spent on everything from paper clips to building a new facility and expanding into new markets. But even the best MBA analysts from the best grad schools have trouble accurately budgeting the cost and time for an SAP S/4 HANA installation whether it is for upgrading a legacy ERP software system or bringing a totally new one onstream. Tales of massive cost overruns are legendary, often escalating into the tens and hundreds of millions of dollars above what was planned when budgets were…
The failure of ERP software systems often prompts a lawsuit to be filed by the user against the vendor and integrator. But a new twist in trying to recover damages from an ERP failure surfaced in May 2019, when Revlon Inc. shareholders filed three class action suits again the cosmetics giant to recover money they claim to have lost as a result of its troubled 2018 implementation of an SAP system. The three actions are likely to be consolidated into one. The problems became known due to Revlon’s filings with the Securities and Exchange Commission, In the filing’s aftermath, the…
Roseanne Rosanna Dana, a popular character in the early years of Saturday Night Live, had a catch phrase, “If it’s not one thing, it’s another!” This seems to describe what happened with National Grid USA’s ERP software system integration and why Wipro recently settled a lawsuit National Grid (NGUSA) filed against it for $75-million. It appears that everything that could go wrong with NGUSA’s system did go wrong. NGUSA is a subsidiary of a UK company and is the largest investor-owned distributor of electricity and gas in New York, Rhode Island and Massachusetts. In 2010, it acquired an ERP system…
The U.S. Supreme Court provided much-needed clarity on the effect bankruptcy has on the licensor’s right to revoke a trademark license. On May 20, 2019, SCOTUS decided, in an 8-1 decision, that “A debtor’s rejection of an executory contract under Section 365 of the Bankruptcy Code has the same effect as a breach of that contract outside bankruptcy. Such an act cannot rescind rights that the contract previously granted.” Mission Product Holdings, Inc. v. Tempnology, LLC NKA Old Cold LLC No. 17-1657 (U.S. May 20, 2019). Tempnology, LLC exclusively licensed its “Coolcore” trademarks to be used in connection with athletic…
Recently, The Hertz Corp. filed a $32-million lawsuit against consulting behemoth Accenture LLP for what Hertz claims was the botched development and delivery of a new website for all of the Hertz’s brands. The project was launched in August 2018, missed its original December 2017 delivery date that slipped to January, 2018 and then again to April 2018. That’s when Hertz pulled the plug. Although the dispute involves a website, the factors leading to the project’s collapse and a lawsuit offer valuable lessons for businesses upgrading a legacy ERP software system or installing a new one. The Hertz story is…
In mid-May 2019, I spoke at a two-day conference on avoiding problems with SAP S/4HANA ERP software , integration and implementation projects. Many users run into the same kind of problems with their SAP S/4Hana software implementation. As an ERP attorney whose career includes working on the vendor side of ERP as well as negotiating and drafting SAP S/4Hana contracts for users and litigating disputes when the SAP S/4Hana implementation encounters problems, we have seen many of the same issues arise repeatedly. Negotiating your SAP S/4Hana contract may be the most important step to achieve a successful SAP S/4Hana implementation.…
For several years now, it’s been widely known how Google and Facebook abuse the privacy of users. Apple Inc. always insisted it was different. A recent ad proclaimed “What happens on your iPhone stays on your iPhone” and CEO Tim Cook once boasted in a talk “We’re not Google.” It turns out that may not be true. Twice during the last week of May, 2019, Apple got bruised for doing about the same thing as its Silicon Valley neighbors: Secretly selling user data to third parties without the knowledge or specific consent of its customers. Ironically, the two items hit…
On May 16 and 17, Taft partner Marcus Harris spoke at a two-day conference on avoid problems with SAP S/4HANA ERP development, integration and implementation. The Taft law firm co-sponsored the event with Third Stage Consulting. Because ERP digital transformations can become difficult, the conference looked at how and why system integrators that focus on SAP are not able to provide either the best practices or the vision needed to ensure that the project is a success. The program Harris participated in took a deep dive into topics including how to define an SAP strategy, plan and budget to…
In the summer of 2015, we cautioned that the Department of Defense’s (DoD’s) new cybersecurity regulations could be used offensively to support False Claims Act (FCA) cases and bid protests. Four years later, those premonitions have unfortunately come true. Recently, a federal court refused to dismiss a relator’s implied certification FCA case in which he alleged that his employer “misrepresented … to the government the extent to which it had equipment required by the regulations, instituted required security controls, and possessed necessary firewalls” in violation of DoD’s cybersecurity regulations. United States ex rel. Markus v. Aerojet Rocketdyne Holdings, Inc., No.…
On March 26, 2019, the European Union voted in favor of making sweeping changes to its copyright law and passed the Copyright Directive (the “Directive”).  While the existing laws have not always kept up with the Internet’s use and capabilities and a reassessment of the effectiveness of old regulations to protect intellectual property rights is warranted, the Directive is a bold move that opponents are warning will ultimately result in online censorship.  Under the new law, American companies like Apple, Twitter, Facebook, Google, and YouTube will likely have to pay European copyright holders more money for licenses to share their…