Business Litigation Report -- December 2014

In This Issue:

Main Article:

- Cloud Computing: Legal Issues on the Horizon

Noted With Interest:

- Stays Pending Covered Business Method Patent Review: VirtualAgility v. Salesforce.com

Practice Area Notes:

- Bankruptcy and Restructuring Update

- Securities and Structured Finance Litigation Update

- Life Sciences Litigation Update

Victories:

- Class Action Victory at Pleading Stage

- Victory for Pinterest on Idea Theft Claim

- International Arbitration Victory

- Excerpt from Cloud Computing: Legal Issues on the Horizon:

In the May 2014 issue of the Business Litigation Report, we discussed a hot topic in law and technology: cloud computing. That topic did not cool down over the summer. Businesses and courts—including the Supreme Court—have continued to grapple with issues presented by computing in the cloud, including who owns the rights to key cloud computing technologies. Given the increased competition and growth in the cloud computing market, such litigation is likely to continue in the future, and will need to take changing legal rules into account.

The Cloud Computing Market -

Broadly defined, “cloud computing” refers to the shared use of computing resources over a distributed computer network. Those resources may include storage, processing, communication, or other computer tasks. The network over which such resources are accessed may be public like the Internet, private like many enterprise IT environments, or a hybrid network combining public and private elements. The business case for shifting computing resources to the cloud is based on the flexibility that cloud computing provides. Instead of needing to buy racks of expensive servers and other equipment as a necessary first step to launching a business, today’s startups can order “virtual” IT centers consisting of only the resources they actually need. Servers and other necessary technologies can be provisioned from a shared pool of computing resources almost as quickly as the company needs. The high fixed startup costs faced by many early IT departments, which posed significant barriers to entry in high-tech industries become, instead, “by-the-drink” operational expenses. As the business grows, these “virtual” computing resources can scale accordingly, often rolling out updated or new services with little to no downtime.