Software as a Service, or SaaS, as it is more commonly known, is a method for delivering software through an internet browser. The user simply types in a URL and then enters a username and password to access the program. This delivery model is very different from a licensing scheme where the user downloads the software from the internet or goes to Best Buy® and buys it off the shelf before installing it onto her own personal computer or company server. There are many benefits to SaaS, such as access from any internet-enabled device, scalability to many users, and automatic upgrades, but along with these conveniences comes a unique set of liability and content ownership issues. Most of the issues stem from the fact that because the software is not installed on the user’s own server, it is not within the user’s direct control.

The three main issues associated with a SaaS solution are: (i) data breach; (ii) the ownership of user-generated content; and (iii) availability of the software (or software uptime).

  • Data breach. 
By default, when a user generates content using a SaaS platform, his data is usually hosted on the SaaS provider’s servers rather than his own. Therefore, the user does not have control over how this data is protected from hacking or other breaches. This in turn exposes the SaaS provider to liability for data breaches that occur to user-generated content residing on the provider’s servers. If you are a user of SaaS software, you want to make sure the provider has sufficient technology in place to protect against unauthorized access to your data and that you are fairly compensated if you suffer a loss. If you are a provider of SaaS software, you want to make sure your financial liability is limited to a fair and realistic amount in the event of a breach.

  • Ownership of user-generated content. 
Copyright laws vest ownership in the author of the works so the user owns any data he generates using the SaaS software. Because of this ownership, a SaaS provider needs to make sure that the user grants her a license to the user data, if providing services on the user-generated content would otherwise constitute infringement. The provider also needs to clearly articulate that the provider retains all IP rights in and to the software itself—only the content is owned by the user. In addition, the SaaS provider needs assurances from the user that he has the legal rights to any data he is storing on the provider’s servers and a guarantee that he will indemnify the provider against infringement claims for any user-generated content.

  • Software uptime and performance. 
Because of a SaaS platform’s reliance on an internet connection and browser, software uptime and performance can be compromised by internet connectivity issues and browser performance. The user needs to understand that the SaaS provider cannot be held liable for such performance issues because it has no control over third-party components and services.

As you can see, the issues that come along with the benefits of a SaaS solution can be quite complicated and complex. If you are a SaaS provider or a SaaS user and want to get SaaS-y, contact me. I can help.



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