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Navigating end-user license agreements

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Jason Morgan is the content director of Fleet Equipment. He has more than 15 years of B2B journalism experience covering the likes of trucking and construction equipment, real estate, movies and craft beer industries.

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Data usage and ownership is not regulated. You may have heard the old industry adage that “fleets own the data,” but adages don’t hold up in court. All that matters is what’s in the end-user license agreement (EULA) that you and your service providers agreed upon.

“I can’t emphasize this enough: Have a lawyer to look at those documents even if it’s a ‘click to accept’ agreement. It’s imperative,” said Marcus Harris, partner at Taft Stettinius and Hollister LLP, a law firm based in Chicago. “EULAs are typically very complicated and drafted in a one-sided and onerous way that doesn’t give the customer a lot of control. I would absolutely urge people to have them reviewed by a lawyer because you have to have the right contractual provisions in the agreement to cover data and to make sure that you have relief in the event that it’s improperly disclosed.”

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Obligatory disclaimer! This article does not constitute, or substitute for, legal advice. Even though Harris shared his thoughts, it is not legal advice specific to your situation. Every agreement is going to be different. With that in mind, here are a few tips for navigating end-user license agreements.

Do your due diligence on the front end

If you agree to an EULA without understanding its terms, and down the line you discover that your data is being used in a way that could cause business damages, that’s not a fight you want to have in court.

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“You end up arguing that the contract is unconscionable; that is not enforceable,” Harris said. “That’s an uphill battle because courts are going to say: ‘You made your bed, and now you have to lie in it. You had the opportunity to negotiate, review, revise the contract and you didn’t. So I’m not going to help you now.’ That’s a pretty hard line, but that’s what judges do.”

Even if it’s a ‘click to accept’ agreement, like in an app?

“Even if it’s click to accept. Absolutely,” Harris said. “That’s as valid as any other contract.”

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Make sure ‘confidentiality’ is clearly defined

Every fleet will have a different data policy and guidelines for how data is used, just as every software and solutions provider has its own EULA. You’ll want to make sure that there is confidentiality language within the agreement before you accept it.

“You have to have a definition of ‘Confidentiality’ that leans on the type of information that is important to you; one permits it from being disclosed generally so it’s treated as confidential,” Harris said. “You may even want to treat it as Trade Secret information, if it’s that important, and have different provisions dealing with Trade Secret information.”

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That means defining specific data sets and their level of confidentiality. If you have a data set that you need more stringent control over, that needs to be clearly defined.

“If it’s just a general confidentiality agreement, then the other side’s going to argue that they didn’t know and that the agreement didn’t include that type of data in its definition,” Harris said.

Rights in court

Harris also said that fleets should consider their rights in court if there is a data breach of some kind.

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“You’re going to want to make sure that there’s some acknowledgement that the customer can go in the court and get an injunction to protect their information,” he said. “Money damages may not be enough, and what you want is the company to stop disclosing the data, have affirmative obligation to go get the data back or prevent the other third party from disclosing it. If your contract doesn’t have that obligation, then you’re out of luck. You’re just out of luck.”

Limitation of liability

Ensuring that any obligation in regard to proprietary, protected data and confidential information is defined within the Limitation of Liability is key to recovering the full monetary damages associated with the breach of contract.

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“In these types of contracts, it’s typically the amount of money that you pay for the software in the six months prior to the liability issue. That may sound okay, but let’s say you spent money on software on January 1, but you haven’t actually spent any money for six months and you only paid ‘support fees,’” Harris said. “You may not have any monetary recourse, and these are set up that way on purpose.”

Marcus Harris is a partner at Taft Stettinius and Hollister LLP and an expert on copyright and data issues. He can be reached at [email protected].

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