Category: Uncategorized

Richard H. Seamon

Published September 2021

Every semester, I tell the students in my course on constitutional law at the University of Idaho College of Law that it is a great time to be taking constitutional law. And every semester that proves to be true. Recent events during the COVID-19 pandemic have raised many issues of constitutional law useful for class discussion. In the following, I discuss one such event: the federal residential eviction moratorium. The moratorium arguably exceeds the federal government’s statutory and constitutional powers. In the following discussion of the moratorium’s legal vulnerability, you will encounter cases that you might remember from your own law school course in constitutional law. I hope the discussion shows the continuing vitality and central relevance of the U.S. Constitution to the challenges that confront our country today.

Introducing the CDC’s Eviction Moratorium

In the pandemic-relief law known as the “CARES Act,” Congress put a six-month moratorium on certain residential evictions.[1] After that moratorium expired in July 2020, Congress did not renew it. Instead, a new eviction moratorium was put in place by the Centers for Disease Control and Prevention (CDC), a federal agency within the U.S. Department of Health and Human Services.[2] The CDC’s eviction moratorium expired on July 31, 2021, despite last minute pressure on the White House and Congress to extend it.[3] In light of the looming expiration, the Idaho Judicial Branch started a pilot program in Ada County that invites landlords and tenants in eviction suits to negotiate settlement agreements through an online portal.[4]

The CDC eviction moratorium applied to all residential housing in the United States. To get protection under the moratorium, a tenant had to show that he or she had fallen behind in rent because of job loss, a cut in working hours, or extraordinary medical expenses. The tenant also had to show that he or she could not find alternative housing other than “congregate” housing like a homeless shelter. A landlord who evicted a tenant in violation of the moratorium faced up to one year in prison and a fine of up to $250,000.[5]

The CDC issued the moratorium under the Public Health Service Act. That federal law authorizes the CDC to issue “such regulations as in [its] judgment are necessary to prevent the introduction, transmission, or spread of communicable diseases . . . from one State . . . into any other State.”[6] The CDC explained that the eviction moratorium could limit the spread of COVID-19 in three ways. It could facilitate self-isolation by people who get COVID-19. It could help States and local governments implement stay-at-home orders. Finally, it could prevent people from ending up on the street or in homeless shelters, where COVID-19 is more easily spread.[7]

Thus, the CDC justified its eviction moratorium as a public health measure. That is important because the U.S. Constitution does not expressly authorize the federal government to issue public health measures. And so a student of the U.S. Constitution naturally wonders whether it authorizes the CDC’s eviction moratorium. This question of the federal government’s power involves three issues that are covered in a law school course on constitutional law and are discussed as follows: the limited powers of the federal government; Congress’s power over interstate commerce; and the delegation doctrine.

The Limited Powers of the Federal Government

The U.S. Constitution creates a federal government of limited powers. But to grasp this point fully, law students must learn that the limited powers granted by the Constitution can include implied powers under the U.S. Supreme Court’s decision in McCulloch v. Maryland.[8]

In McCulloch, the Court held that Congress had power to create a national bank. The Court acknowledged that “[a]mong the enumerated powers, we do not find that of establishing a bank.”[9] That was not fatal, the Court concluded, because the Constitution gives implied (as well as express) powers to Congress. The Court based this conclusion partly on the Constitution’s Necessary and Proper Clause, which the Court interpreted to recognize Congress’s power to enact all measures that are reasonably necessary to execute the enumerated powers.[10]

The McCulloch Court held that the creation of a national bank fell within Congress’s implied powers, as reflected in the Necessary and Proper Clause. The Court reasoned that the bank was a reasonably necessary way for Congress to execute various enumerated powers. Those powers included the powers to lay and collect taxes (with the national bank serving as a depository of those taxes); to borrow money (with the bank serving as the federal government’s lender); and to regulate commerce (with the bank’s notes serving as a form of national currency). And so, after all, the national bank was a “necessary and proper” way of executing several enumerated powers.

The McCulloch Court’s recognition of “implied powers” underlay the federal government’s expansion in the twentieth century. As one website says, “Ultimately, McCulloch v. Maryland made possible the rise of . . . ‘the administrative state,’ in which the government employs officials to oversee many aspects of American life, from environmental issues to labor disputes.”[11] This conclusion is incomplete, though. To appreciate the connection between McCulloch and today’s “administrative state,” the student of constitutional law must learn (1) how McCulloch’s concept of implied powers combines with Congress’s power to regulate interstate commerce and (2) how the Court’s delegation doctrine allows Congress to transfer huge hunks of its Commerce power to federal executive-branch agencies.

The implied powers, in effect, enlarge the enumerated powers. This enlargement has been most significant as applied to Congress’s power to “regulate Commerce . . . among the several States.”[12]

Congress’s Commerce Power

The implied powers of Congress recognized in McCulloch and reflected in the Necessary and Proper Clause can be exercised only in connection with Congress’s execution of its expressly enumerated powers. The implied powers, in effect, enlarge the enumerated powers. This enlargement has been most significant as applied to Congress’s power to “regulate Commerce . . . among the several States.”[12]

As enlarged by implied powers, Congress’s Commerce power was held in United States v. Lopez to authorize Congress to regulate three categories of activity:

First, Congress may regulate the use of the channels of interstate commerce. Second, Congress [may] . . . regulate and protect the instrumentalities of interstate commerce, or persons or things in interstate commerce. . . . Finally, Congress [may] . . .  regulate . . . those activities that substantially affect interstate commerce.[13]

The third category is reachable by Congress largely because of its implied powers. The classic case illustrating this is Wickard v. Filburn.[14] There, the federal government fined Roscoe Filburn for growing more wheat than allowed under a federal statute. Mr. Filburn consumed all of this excess wheat on his own farm. The Court upheld Congress’s power to regulate a farmer’s growing his own wheat for his own on-farm consumption. The Court reasoned, in part, that regulation of this type of activity was necessary to protect Congress’s ability to regulate interstate commerce in wheat. It was thus justified as a means that was reasonably necessary to executing the Commerce power over the commodity. To support this conclusion, the Wickard Court cited McCulloch v. Maryland.[15]

Today, we would say that Congress could regulate Farmer Filburn’s growing of “excess wheat” for his own use because that activity—when considered in the aggregate—substantially affected interstate commerce in wheat and thus fell within Congress Commerce power (as enlarged by the implied powers reflected in the Necessary and Proper Clause). The Commerce power, as amplified by the Necessary and Proper Clause, underlies most federal statutes on the books today, including federal anti-discrimination laws, environmental protection laws, and, most relevant here, public health laws.

So far, we’ve established Congress’s power to regulate activity that substantially affects interstate commerce. We still must connect that power of Congress to federal executive-branch agencies like the CDC. The connection lies in the delegation doctrine.

The Delegation Doctrine

The delegation doctrine allows Congress to authorize federal agencies to make rules that have the “force and effect of law.”[16] These rules are called “legislative rules” to indicate that their legal effect is tantamount to that of federal statutes.

Early on, the U.S. Supreme Court rejected the argument that, by allowing federal agencies to make legislative rules, Congress was abdicating its duty to exercise “[a]ll legislative Powers” vested in it by the U.S. Constitution.[17] The Court takes the position that federal agencies exercise only a “quasi-legislative,” not a purely legislative power.[18] The Court insists, however, that in granting this power, Congress must prescribe an “intelligible principle” for the agency to follow when making legislative rules. Thus, the federal statute that grants rulemaking power must put comprehensible (“intelligible”) restrictions on that power.

In applying the “intelligible principle” standard, the Court has upheld exceptionally broad grants of rulemaking power to federal agencies. For example, the Court upheld the federal statute that allows the Occupational Safety and Health Administration (OSHA) to make workplace safety rules. The statute requires the rules to be “reasonably necessary or appropriate to provide safe or healthful employment [which] most adequately assure[], to the extent feasible, on the basis of the best available evidence, that no employee will suffer material impairment of health.”[19]

It does not matter that this statute is full of fuzzy wiggle words like “reasonably necessary or appropriate,” “adequately assure,” “to the extent feasible,” and “material impairment.” Nor does it matter that the rules cover all businesses that are engaged in interstate commerce or whose activities substantially affect interstate commerce. Under the Court’s delegation doctrine, OSHA can prescribe national workplace safety policy for almost the entire private sector.

Revisiting the CDC’s Eviction Moratorium

At this point, we can fully analyze the CDC’s power to issue the eviction moratorium. Analysis entails three questions:

1. Does the nationwide eviction moratorium fall with the CDC’s power under the Public Health Service Act? If so, two further questions arise:
2. Does the Act violate the delegation doctrine?
3. Does the Act fall within Congress’s power?

Only questions two and three are questions of constitutional law. Question one involves statutory interpretation, but it is influenced by constitutional concerns, as shown in a recent decision by the U.S. Court of Appeals for the Sixth Circuit, Tiger Lily, LLC v. U.S. Dep’t of Housing and Urban Development.[20]

The court in Tiger Lily held that CDC’s eviction moratorium was not authorized by the Public Health Service Act. The court relied partly on its belief that the Act “could raise a nondelegation problem” if it were interpreted to authorize the moratorium. The court explained that such an interpretation “would grant the CDC director near-dictatorial power for the duration of the pandemic.”[21] The apparently limitless scope of power entailed by the CDC’s favored interpretation would mean that the statute necessarily lacks an “intelligible principle” restraining agency discretion. As such, the statute would violate the nondelegation doctrine if the CDC’s interpretation were adopted.

The Tiger Lilly court also believed that an expansive interpretation of the Act urged by the CDC would “push the limit of congressional authority” and for that reason, too, must be avoided.[22] The “congressional authority” that the court had in mind was Congress’s authority under the Commerce Clause. Although the CDC argued that the moratorium regulated activity that substantially affects interstate commerce, the argument was a stretch in the court’s view. That was so for three reasons.

First, the eviction moratorium did not regulate a commercial transaction like the rental of housing. Indeed, it didn’t alter tenants’ contractual obligation to pay rent. It just restricted a legal remedy—one that usually would be sought in a state court—for nonpayment. Nor was the moratorium a reasonably necessary part of a broader federal scheme for regulating the real estate market.

Second, the connection between the eviction moratorium and the interstate movement of people was highly attenuated. The Texas court found that, while about 15% of residential moves are interstate, only a small percentage of residential moves result from evictions. Marital breakups account for ten times as many residential moves as do evictions, and yet it’s doubtful that the federal government can regulate divorce, as family law is an area of traditional state concern.[23]

Third, a federal eviction moratorium is unprecedented. In the past, eviction moratoria have been thought to fall within the States’ police power.[24] The federal government’s failure to exercise a power that would be so appealing in response to events like the Spanish Flu of 1919-1920 and the Great Depression tends to suggest that the power does not exist.

Thus, the Sixth Circuit’s decision in Tiger Lily implies that the moratorium’s constitutionality is dubious because of the nondelegation doctrine and the limits on Congress’s Commerce power.

The D.C. Circuit, however, came to opposite conclusions in Alabama Ass’n of Realtors v. U.S. Dep’t of Health and Human Services.[25]The D.C. Circuit’s decision has limited precedential value, as it was a short per curiam opinion issued on appeal from a district court’s grant of a stay pending appeal. Even so, the decision is significant because of its conclusions that the eviction moratorium (1) “falls within the plain text” of the Public Health Service Act; (2) the Act, in turn, falls within Congress’s “well-established authority to regulate rental housing transactions because they substantially affect interstate commerce”; and (3) the Act complies with the nondelegation doctrine because it “provides an intelligible principle that guides the [CDC’s] authority.”[26] These quotations from the D.C. Circuit’s opinion make clear that it does not see eye-to-eye with the Sixth Circuit when it comes to the validity, including the constitutionality of the eviction moratorium.

This disagreement between the circuits is unlikely to be resolved by the U.S. Supreme Court in the near term. The expiration of the CDC eviction moratorium probably renders pending legal challenges to it moot. But the federal government’s power under the U.S. Constitution to impose such a moratorium remains an important issue that could ultimately draw the Court’s attention. And the issue could arise again if COVID-19 flares up or some other crisis causes the federal government to reinstitute a moratorium.

“This disagreement between the circuits is unlikely to be resolved by the U.S. Supreme Court in the near term”

Conclusion

Even if we consider only the federal government’s power to issue the residential mortgage moratorium, we delve into topics that consume several weeks of the constitutional law course. And this article has not even addressed the question of whether that exercise of power violates individual constitutional rights, such as the right to just compensation for takings of private property.[27] I hope the article nonetheless suffices to show that the U.S. Constitution remains at the center of matters of vital public interest, and that the law school course on constitutional law begin to equip students to analyze those matters.

---

Endnotes

[1] Coronavirus Aid, Relief, and Economic Security Act, Pub. L. No. 116-136, § 4024, 134 Stat. 281, 492–93 (2020).

[2] Temporary Halt in Residential Evictions to Prevent the Further Spread of COVID-19, 85 Fed. Reg. 55,292 (Sept. 4, 2020).

[3] CDC, Temporary Halt in Residential Evictions to Prevent the Further Spread of COVID-19 (updated June 29, 2021), https://www.cdc.gov/coronavirus/2019-ncov/covid-eviction-declaration.html; Andrew Ackerman & Siobhan Hughes, House Adjourns Without Extending Covid-19 Eviction Moratorium, Wall St. J., July 30, 2021, https://www.wsj.com/articles/house-adjourns-without-extending-covid-19-eviction-moratorium-11627684248?mod=searchresults_pos1&page=1.

[4] State of Idaho Judicial Branch, Press Release: New Tool Allows Landlord, Tenants to Resolve Eviction Cases Online (July 7, 2021), https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&ved=2ahUKEwjqteXk_YvyAhVSqJ4KHQ8OBgsQFjACegQIBxAD&url=https%3A%2F%2Fisc.idaho.gov%2Fsites%2Fdefault%2Ffiles%2Fpress-release-documents%2F20210707%2520New%2520Tool%2520Allows%2520Landlords%252C%2520Tenants%2520to%2520Resolve%2520Eviction%2520Cases%2520Online.pdf&usg=AOvVaw3tclM8I5CVbyLQVqpvA0Xc

[5] Id. at 55,296–97.

[6] 42 U.S.C. § 264(a). The statute grants rulemaking power to the Surgeon General, but that power has been transferred to the CDC. Ala. Ass’n of Realtors v. U.S. Dep’t of Health & Human Servs., No. 21-5093, 2021 WL 2221646, at *1 n.1 (D.C. Cir. June 2, 2021).

[7] 85 Fed. Reg. at 55,292.

[8] 17 U.S. (4 Wheat.) 316 (1819).

[9] Id. at 406.

[10] U.S. Const. art, I, § 8, cl. 18.

[11] History.com Editors, McCulloch v. Maryland, history.com (updated June 1, 2021), https://www.history.com/topics/united-states-constitution/mcculloch-v-maryland.

[12] U.S. Const. art. I, § 8, cl. 3.

[13] 514 U.S. 549, 558 (1995).

[14] 317 U.S. 111 (1942).

[15] Wickard, 317 U.S. at 129 n.29.

[16] E.g., PDR Network, LLC v. Carlton & Harris Chiropractic, Inc., 139 S. Ct. 2051, 2055 (2019).

[17] U.S. Const. art. I, § 1.

[18] E.g., Chrysler Corp. v. Brown, 441 U.S. 281, 302 (1979).

[19] Industrial Union v. American Petroleum Institute, 448 U.S. 607, 612 (1980) (quoting statute).

[20] No. 21-5256, 2021 WL 3121373 (6^th Cir. July 23, 2021).

[21] Id. at *4.

[22] Id.

[23] Terkel, 2021 WL 742877, at *10.

[24] E.g., Home Bldg. Ass’n v. Blaisdell, 290 U.S. 398, 437 (1934).

[25] No. 21-5093, 2021 WL 2221646 (June 2, 2021).

[26] Id. at *3.

[27] U.S. Const., amend. V.

Mellisa D. Maxwell

Published January 2022

The way in which business software is bought and sold is shifting. This shift is resulting in a much higher volume of software licenses than most corporate and business attorneys have historically handled.  Many business lawyers will need to adapt their practice style to provide competent representation that meets the needs of the client.   When you think about the direct-to-consumer side of licensing, it started shifting years ago.

While many of us remember going to the store to buy a computer game or a movie, streaming and downloading content is now virtually at the fingertips of every consumer.   Literally, at the touch of my thumbprint the collected works of Harry Potter is available to me almost instantaneously.  Many consumers have come to expect this type of convenience.  No matter how much we resisted, last year the access to Instacart, DoorDash, Netflix, Disney+, and many other online services was how many people kept their sanity.  Did anyone read the End User License Agreements (EULAs) to those services?  Likely not.  We were all ready and willing to assume any and all risks for the sake of convenience and the hope of at least a half-second of peace and quiet. 

That changes when we step in the office. If a client comes to you and says, “Hey, so we want to get this really cool tool that will help us [fill in the blank], it’s a free trial and then like only a couple hundred dollars a year,” the lawyer brain kicks into motion.  Outwardly we smile and say, “tell me more.”

The buying and selling of software

Even though I am using the terms buying and selling, it is important to note that software is not really “sold” in the legal sense.  Computer software falls under the original works of authorship protected under copyright law.   As a form of intellectual property, software is technically licensed as opposed to sold. ¹  What is being bought and sold is just the license to use the software.²

Business to Business (B2B) refers to when one business supplies products and services to another business, as opposed directly to end consumers. Many companies, for example Microsoft, have both models.  You may have a Microsoft account for your home computer but when you buy Microsoft for work, you should not be logging into the Microsoft home edition.  In the simplest form the B2B license grant is for a commercial use, whereas Business to Consumer applications (B2C) applications will contain a license grant restricted only to personal use.

High-volume licensing models

Arguably, software licensing changed starting as early as the 1990s with ProCD, Inc. v. Zeidenberg, when the Seventh Circuit held the “shrink wrap” license was valid and enforceable.³

But it was not until 2009 when we saw a digital transformation begin to take place with cloud computing.  As late as 2011, enterprise level business had hesitation in moving to the cloud despite the enormous cost savings it promised.⁴ During this time licensors were trying to figure out how to embrace the cloud for distribution as there were key advantages, whereas licensees were working to keep everything stored locally on their own servers and networks, aka “on-prem.”  The loss of physical control of the data posed potential risks many businesses were not ready to assume.  Now, ten years later, a small company may have over 100 cloud-based applications it is using day-to-day.⁵

Cloud Marketplaces are a newish B2B channel that allows business leaders a streamlined way to find and purchase cloud applications.⁶  The question this poses is how can counsel serve the best needs of the client when clients are able to click and subscribe to Software as a Service (SaaS) tools at a rapid pace.  Moreover, there is an increasingly growing range of application possibilities from publishing tools, security applications, point of sale (POS) systems, or even Git  repositories. ⁷  The average B2B SaaS sales cycle length can take almost 4 months with some closer to 7.⁸ One report shows the average in 2020 as 83 days.⁹  This means there is a business or licensee that needs or wants to buy something and a seller or licensor who is trying to generate revenue.

Imagine the frustration this would cause today’s consumers if it took 83 days to download the next season of Schitt’s Creek.    Better yet, imagine a customer walks into a bakery to buy a loaf of bread.  Suddenly the stereotypical lawyers swoop in to negotiate this deal—what if the bread is stale? How long will the bread last? What if it makes the purchaser sick? Or a family member?   Did they steal this bread? Do they have relevant licenses to sell me this bread? If my client commits to buying more bread, will I get a better deal? Do they have insurance . . .? While the lawyers are trying to craft language on indemnification and remedies in the event of a misrepresentation as to the gluten, sugar, and carb ratio, the lawyers have failed to notice that the buyer and seller have snuck out back to conclude the transaction and move the growing line along. 

In this example, the seller wants to make money from selling bread and the buyer just wants to make a sandwich.  The lawyer’s zealous advocacy may have just crossed the line to not helping the client but instead is hindering the client’s objectives (and creating risk because we have no idea what was agreed to in this back-alley deal).¹⁰  Even though bread and widgets are different from software, it is still the same problem—when the legal department is a roadblock to a deal that has already taken months, it incentivizes our clients to avoid us. The practice style that has worked for legal teams previously is not scalable when the SaaS deals are stacking up.  Nevertheless, there are things we can do.  Here are five tips to successfully handle a high volume of software licenses.

Tailor your approach

Here is a scenario: it is late in the day and I get an instant message on my computer via Slack from a company executive, “Hey, let’s talk about EULA’s.”   Soon we are face to face in a Zoom meeting discussing a potential revamp of the standard EULA template. As we discuss the use case and some of the contractual provisions, I propose a novel approach, “we could modify it to start with something more reasonable.” My colleague’s response is filled with mixed emotions because in his experience, the other side’s legal team will always push for something regardless of whether the starting point is reasonable or not; and then where do you go on the negotiation.   It is a good point but it is a time-consuming dance.

Unlike in a B2C relationship, the other side will likely have an attorney or sophisticated procurement person. When drafting and creating standard templates think about how you can advocate for your client but not do it a disservice by impeding business.  If you know that you would never ever agree to something, then do not put it in your own template and expect the other side to accept it. When you try to be clever and tricky, you end up being a roadblock.

If your client is licensing out a product then you should be able to have a standard agreement. If your approach is reasonable, then there is a greater chance that your customer agreements will be very much the same and thus lower overhead in managing or tracking contractual obligations.  There is a reason DIY legal services exist; we are ruining our profession by getting in our own way.

Know your client

When I look to outside counsel for help, I do not want a generic memo.  I want contextual advice, which comes from having a much bigger picture of the company than simply what the company does.   Legal counsel should know the market and the industry.  Business leaders have business decisions to make; my legal team should be delivering practical and meaningful advice based on business realities.  It is not a one-size-fits-all analysis when thinking about a software license. It is very clear when an attorney in a negotiation does not know their client.  One of the most over the top examples that comes to mind is a recent situation where the licensor’s attorney insisted on only offering a warranty for something they were not providing; it got really awkward when his client’s business team had to explain what it was that they “do” to their own legal counsel.¹¹

Understand the deal

This ties closely with knowing your client.  Make sure your client has provided you with all the documents related for the deal.  Often times, there are details in order forms or addendums that you need to have a complete picture.  If, for example, a document keeps referencing something that you cannot find, it could be sloppy drafting, but it could also be that you were not provided with all the documents.  

Before you even start reading, you should have some idea as to what the software is, who will be using it, and how will it be used.  Having some context is crucial to the analysis of the contractual provisions. Moreover, when it comes to contractual provisions, the provisions should all make sense in light of the deal. None of us should have to make those crazy arguments to keep a provision that has been in a template because your boss has not approved a revision in decades—Code Escrow, I am looking at you!¹²

Read

 Read the documents.  Do not just jump on a call to negotiate a deal without having read the contract.  It is obvious to your clients and the other side that you are winging it. I know sometimes that is not always possible to read the most recent redline you received hours before.  I get it. But own it and be honest.  Ask the client/business owner to reschedule.  If you are outside counsel, there should be no reason you have not read the documents prior to the call, since they are often scheduled based on your availability.   Conversely, if you want less to read or want to read faster, then consider using plain language and shorter contracts.  Some legal departments try to get get out of reading by forcing its own paper on licensors.  This can be a risky approach given drafting a contract that is so generic to cover a wide variety of applications gets extremely long. The longer the contract, the more ripe it is for ambiguity and conflicting provisions.

In addition, while this may make it easier on your operations to not have to read every deal that comes in, it is harder on the licensor’s operations.¹³  It all falls apart when the client really needs something, and the vendor refuses to license their product under someone else’s paper. By the time the legal team gives in, they are rushing through the license agreement because the client needed this application weeks ago.  They are now doing a bigger disservice to their client because they are left negotiating up against the clock with very little leverage.  This is where I have found the Marketplace standard contracts really help as a good compromise to move deals through the pipeline.  

Embrace technology

Do not fear “The Google”.  I was very reluctant to use Google Docs.  Not too long ago I would have died on that hill to have my windows laptop and my Microsoft applications.  Unfortunately, that conflicted with the inclusive culture I was trying to build in the company and across departments.  Yes, my team does still have some Microsoft applications that we use.

With a Google Doc you can set permissions and settings to continue to protect confidential information and restrict who has access and versioning visibility.  I use it to collaborate with my co-workers because it avoids the version control issues with someone making a change and then the wrong document being sent to the other party.  It was a big change at first, but I found it speeds things up. 

Initium Law also moved to using the Gsuite application, as we found many of our small businesses clients did not use Microsoft tools, so we spent more time trying to open up each other’s documents than getting anything else done.  We also discovered value in having multiple people working on a client matter meant we did not lose any of the work product as they filtered in and out of rotation.   It was also a much easier time adding and deactivating credentials. Working together on a document in real time is more efficient than the save, send, open, resave cycle.

I am not endorsing any particular tool or product. There are a number of real time collaboration tools out there.  Do not be afraid to use them.  I encourage you to proactively evaluate your tech stack and re-evaluate often.   The legal tech stack does not have to only include software specifically designated for legal teams; Tackle.io is a great example. Another example is project management; if every department uses one tool for projects but the legal department’s workflow is managed through another tool, it creates friction in the organization.  This friction adds to the roadblock perception.

Perhaps it is the fear of change that is the real problem when it comes to embracing technology. Pre-pandemic, many legal departments had not even embraced e-signing tools yet.  I have signed roughly 350 documents in Docusign in the past six months and plenty more through other e-sign platforms.  Yet a majority of our outbound licensing goes through the Marketplace and is licensed under a click-wrap agreement.  I cannot imagine how much I would spend on licensing e-signing platforms if we signed every license agreement.  

Besides the budget savings, the cool thing about the Marketplace is the tracking and recordkeeping functionality it provides.  It would be remiss of me not to mention the Tackle.io platform in this context.  At Tackle we use our own tool internally so we do not have to pull reports from each Marketplace, and we can get the combined data through the Tackle Platform. The more standard the license agreements are, the more capital efficient my department can be.   This is why we have built it into our procurement process that we buy from the Marketplaces whenever possible.  If the company is leveraging the standard contract for the marketplace, it is the same terms we are comfortable with as the licensor, and we know what to expect.¹⁴  

The bottom line is that if you keep sending Word docs to clients who do not have Microsoft tools, it leaves the impression that you are stagnant in your practice and have no interest in being a partner to them.

When we adapt and be more innovative, it shows our clients that we really are teachable, and we care what is in their best interest. It is crucial that we are not seen as a roadblock but instead as a valuable partner so that when our representation, advice, and skill matter most, they will trust us. In the end this serves not just our clients but the profession as well. 

---

Endnotes

1 When software or other Intellectual property is “sold,” it is a transfer of intellectual property rights, which is outside the scope of this article. 

2 This is a simplified statement as the license grant language will vary depending on the type of IP rights; use is just one of the rights in the overall bundle. 

3 ProCD, Inc. v. Zeidenberg, 86 F.3d 1447 (7th Cir. 1996).

4 Cloud Computing- Business Perspective, S. Marston et al, Decision Support Systems 51 (2011).

5 https://www.blissfully.com/blog/saas-statistics/ (last visited Sept. 30, 2021).

6. https://www.canalys.com/insights/Cloud-marketplaces-as-a-channel-to-market?ctid=2232-fded5e8d7060d55ce58f3080ad95e39f (last visited Sept. 30, 2021).

7. A git is the version control system for source code during a software development project.

8. https://www.marketingcharts.com/customer-centric/lead-generation-and-management-107203 (last visited Sept. 30, 2021).

9. https://www.klipfolio.com/metrics/sales/sales-cycle-length (last visited Sept. 30, 2021).

10. If you walked up to the bakery counter to buy a loaf of bread and the clerk says, “hold on, let me get my lawyer on the phone,” run away.  Do not buy that bread.  Alternatively, if you want to buy all the existing bread and the exclusive rights to future bread, then that is a different story.

11. Do not be pointing fingers, in this situation it was not an Idaho attorney or Idaho company. 

12. Previous concerns like escrow for the code, destruction of equipment, and updates to code are gone with the shift to continuous deployment on the cloud.

13. The Marketplaces allow you to use your own EULA as well.