Table Of Contenta-managers-guide-to-it-law-USA:Layout 1 12/03/2009 10:34 Page 1
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A Manager’s Guide to IT Law r
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Jeremy Holt, Jeremy Newton (Editors) H
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This comprehensive guide for management professionals Written by The
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discusses the computer-related legal issues faced by N
British Computer e
businesses and their staff on a daily basis. A Manager’s w
t
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Guide to ITLaw explains, in plain English, the most relevant Society Law n
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legal frameworks with examples from actual case law used to e
Specialist Group d
illustrate the kinds of problems and disputes that most it
o
commonly arise. The seven contributors to this book, experts, A Manager’s rs
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hand-picked for their breadth of knowledge, draw on their Guide to IT Law gives
many years of experience of IT Law to review:
managers, who are A
M
IT Contracts not specialists, the
a
Systems Procurement Contracts
right information n
Implementing New Systems a
Avoiding Employment Problems to work out what g
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Instructing an IT Consultant r
needs to be done, ’
Intellectual Property Law for Computer Users s
who to get advice G
Escrow
u
Outsourcing from and how to i
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Data Protection
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deal with the IT
Setting Up Joint Ventures
t
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Resolving Disputes and legal experts.
I
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About the editors L
a
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Jeremy Holt is the head of the Computer Law Group of Clark
Holt Commercial Solicitors and the Secretary of the Law
Specialist Group of the British Computer Society.
Jeremy Newton is a partner in the Technology Group at UK law
firm Nabarro Nathanson and is noted as a ‘leader in the field’
in Chambers Guide to the Legal Profession. He is also the
secretary of the British Computer Society Financial Services
Specialist Group.
This book is brought to you by the
British Computer Society – the leading
professional and learned society in the field
of computers and information systems.
BCS FIRST FLOOR, BLOCK D,
NORTH STAR HOUSE, NORTH STAR AVENUE,
SWINDON, SN2 1FA, UK
A Manager’s Guide to
I T Law
The British Computer Society
The British Computer Society is the leading professional body for the IT industry.
With members in over 100 countries, the BCS is the professional and learned
Society in the field of computers and information systems.
The BCS is responsible for setting standards for the IT profession. It is also lead-
ing the change in public perception and appreciation of the economic and social
importance of professionally managed IT projects and programmes. In this
capacity, the Society advises, informs and persuades industry and government on
successful IT implementation.
IT is affecting every part of our lives and that is why the BCS is determined to pro-
mote IT as theprofession of the 21st century.
Joining the BCS
BCS qualifications, products and services are designed with your career plans in
mind. We not only provide essential recognition through professional qualifica-
tions but also offer many other useful benefits to our members at every level.
Membership of the BCS demonstrates your commitment to professional develop-
ment. It helps to set you apart from other IT practitioners and provides industry
recognition of your skills and experience. Employers and customers increasingly
require proof of professional qualifications and competence. Professional mem-
bership confirms your competence and integrity and sets an independent stan-
dard that people can trust. See www.bcs.org/membership for more information.
BCS Law Specialist Group
The Group keeps members informed of developments in computer law and holds
meetings addressed by experts on computer contracts, Internet law, business to
business communications, data protection, IT contracts, service level agree-
ments, intellectual property in software and hardware, the use of computers in
support of litigation, the arbitration of computer disputes and expert support in
computer disputes. See www.bcs.org/groups for more information.
Further Information
Further information about the British Computer Society can be obtained from:
The British Computer Society, 1 Sanford Street, Swindon, Wiltshire, SN1 1HJ.
Telephone: +44 (0)1793 417424
Email: [email protected]
Web: www.bcs.org
Further information about the BCS Law Specialist Group can be obtained from:
Jeremy Holt (Secretary)
Email: [email protected]
A Manager’s Guide to
I T Law
EDITED BY
Jeremy Holt and Jeremy Newton
© 2004 The British Computer Society
All rights reserved. Apart from any fair dealing for the purposes of research or private study, or criticism or
review, as permitted by the Copyright Designs and Patents Act 1988, no part of this publication may be repro-
duced, stored or transmitted in any form or by any means, except with the prior permission in writing of the
Publisher, or in the case of reprographic reproduction, in accordance with the terms of the licences issued by
the Copyright Licensing Agency. Enquiries for permission to reproduce material outside those terms should
be directed to the Publisher.
The British Computer Society,
1 Sanford Street,
Swindon, Wiltshire SN1 1HJ,
UK
www.bcs.org
ISBN 1-902505-55-7
British Cataloguing in Publication Data.
A CIP catalogue record for this book is available at the British Library.
All trademarks, registered names etc. are acknowledged in this publication to be the property of their
respective owners.
Disclaimer:
Although every care has been taken by the authors and The British Computer Society in the preparation of
the publication, no warranty is given by the authors or The British Computer Society as Publisher as to the
accuracy or completeness of the information contained within it and neither the authors nor The British
Computer Society shall be responsible or liable for any loss or damage whatsoever arising by virtue of such
information or any instructions or advice contained within this publication or by any of the aforementioned.
Typeset and printed by J. W. Arrowsmith Ltd., Bristol
Contents
Contributors ix
Foreword RICHARD CHRISTOU xi
Acknowledgements xii
Abbreviations xiii
Glossary xiv
Useful Organizations xviii
Preface JEREMY HOLT xix
1 IT Contracts JEREMY HOLT 1
Introduction 1
Parts of a contract 1
Who are you going to call? 2
Checking out the supplier 2
Letter of intent 3
The supplier’s terms 3
What contracts are there likely to be? 3
Appendix: Main points of an IT contract 12
2 Systems Procurement Contracts JEREMY NEWTON 14
The negotiation process 14
Contract mechanics 16
Commercial highlights 19
Problem management 21
Conclusion 26
Appendix: The ‘reasonableness’ test in practice 26
3 Implementing New Systems JEAN MORGAN 29
Introduction 29
Setting realistic expectations 30
Specifying the correct requirement 31
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A Manager’s Guide to IT Law
Scoping the project 32
Planning 33
Realizing benefits 35
IT in mergers and acquisitions 35
IT due diligence 35
Conclusions 37
References 37
4 Avoiding Employment Problems JEREMY HOLT 38
Introduction 38
Computer and email usage policies 38
Avoiding health and safety claims 43
Appendix: Specimen policy for computer and email use 46
5 Instructing an IT Consultant JEAN MORGAN 50
Introduction 50
So you think you need a consultant? 50
Finding a consultant 51
Selecting the right consultant 54
Pricing structures 55
Assessing skills and knowledge 56
Getting value from the consultant 56
When all else fails 57
Appendix: Template for a terms of reference document 58
References 60
6 Intellectual Property Law for Computer Users JENNIFER PIERCE 61
Introduction 61
Hardware and intellectual property rights 62
Software and intellectual property rights 63
Databases and intellectual property rights 65
Websites and intellectual property rights 66
Domain names and intellectual property rights 67
The internet and trade marks 69
The internet and copyright 70
Appendix: A basic guide to intellectual property and related rights 70
7 Source Code Escrow GRAHAM WOOD 76
Introduction 76
vi
Contents
The importance of escrow for software users 76
When do you need escrow? 77
Technical considerations 79
Verification 80
What should be lodged? 80
The agreements 81
User’s duties 82
Choosing an escrow agent 82
Advantages of escrow for software owners 83
Conclusion 83
8 Outsourcing JEREMY NEWTON 85
Introduction 85
Defining the services 86
Design risk 87
Service level agreement 87
Pricing and payment mechanisms 89
The outsourcing life cycle 91
Other relevant issues 94
9 Data Protection ANDREW KATZ 95
Introduction 95
What data are covered 96
Sensitive personal data 97
Who needs to notify? 98
How to notify 99
Data protection principles 101
Rights of data subjects 101
Exemptions 110
Penalties and enforcement 111
References 111
10 Doing Business Electronically JEREMY NEWTON 112
Introduction 112
Prior authorization 113
Information to be provided to clients 114
Forming contracts electronically 116
Performance and cancellation 118
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A Manager’s Guide to IT Law
Jurisdiction 119
Marketing communications 120
Consequences of non-compliance 121
VAT issues 122
Other considerations 123
Appendix: Consolidated information requirements 124
11 Setting up Joint Ventures ANDREW KATZ 125
Introduction 125
Joint ventures and IT projects 125
Establishing a joint venture 126
Structure of a joint venture 129
The operating agreement 135
Competition law 135
Appendix: Checklist for a joint venture operating agreement 137
12 Resolving Disputes SARA ELLACOTT 139
Introduction 139
Dispute resolution methods 139
Conclusion 150
Index 151
viii
