This article is written by Saswati Soumya, pursuing a Diploma in Cyber Law, Fintech Regulations, and Technology Contracts from LawSikho.com. The article has been edited by Prashant Baviskar (Associate, LawSikho) and Ruchika Mohapatra (Associate, LawSikho).

Introduction

The major areas of law that a technology lawyer works in are patent law, trademark law, copyright law, general unfair competition, rights of publicity, and privacy. When it comes to technology deals, there are three most important things, i.e., 

(1) what is the amount of money to be paid? 

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(2) What technology is to be given in return? and

(3) Under what conditions will the resulting agreement be terminated? 

From a privacy and data protection perspective, one needs to be mindful of the legal issues that would arise from a collection of data, managing such data, sharing of data, data modeling, marketing data, and transfer of data to others. 

Cyber law services wanted by clients

Cyber complaint regarding lottery scams received via SMS or email

An example of this is the“KBC Lottery Frauds.” In this form of cyber fraud, the fraudsters send WhatsApp messages to victims from unknown numbers. They claim that their mobile number has won a lottery that is jointly organised by Kaun Banega Crorepati and Reliance Jio that is worth Rs. 25 lakhs. In addition to that, they also claim that they are required to contact the same person whose number is provided in the WhatsApp message in order to claim that lottery. The next step is the victim contacting the fraudster. When the victim contacts the number to claim the amount, the fraudster tells the victim that they first need to pay a certain refundable amount. This refundable amount shall go towards the processing of the lottery as well as GST. The victim may deposit the money. Once the money is deposited, they start demanding more money. The accused insists on maintaining contact only through WhatsApp. The fraudsters induce the victim to deposit the money in various bank accounts and the entire fraud goes on for weeks and months so long as the victim is induced to deposit money. After some time, the fraudsters keep the victim engaged and interested by stating that the lottery amount has increased to Rs. 45 lakhs and Rs. 75 lakhs. The fraudsters stop calling the victim and discontinue the WhatsApp numbers that were being used in the fraud, once the victim starts insisting on getting the money or refuses to pay more money.

It is advisable to know that-

(a) any message that informs that one has won a lottery or a prize is a fraud in all likelihood; 

(b) it is important to look for the glaring signs that a message is indicative of fraud- for example if the message shows poor drafting and has grammatical errors;

(c) it’s helpful to discuss issues with family members and verify the messages via alternate means and not let such messages exploit one’s greed and allow one to get blinded by it;

(d) the tax component and other charges are cut from the prize money and the winner gets the deducted amount in a genuine lottery or prize; 

(e) it’s easier to identify that it is a cyber fraud since one is required to pay these charges in advance in order to get lottery money;

(f) it is also used to identify that maintaining secrecy from the caller’s end is an indication of some wrongdoing.

Prior to lodging a complaint at the nearest police station that will describe the complete incident, it is prudent to collect all documents such as,

(a) brief facts of the complaint that explains the way in which one came into contact with the alleged person/website and subsequent fraud;

(b) a screenshot/ copy of the alleged SMS;

(c) documentary evidence such as screenshots and bank transaction statements etc.

Last but not the least, it is advisable to save the soft copy of all the documents and provide it to the Investigating Officer in CD-R and also a hard copy.

Cyber complaint regarding unknown callers obtaining confidential account details

When unknown callers call in order to obtain confidential information, it is a case of call fraud. This is otherwise referred to as “vishing” or voice phishing. This mode of fraud has the following details, namely,

(a) People receive phone calls that appear to be from the bank. The caller gives an impression that they are the representative of the bank or someone from the technical team of the bank. It appears as if the caller is genuinely calling the customer. This is called giving a false sense of security.

(b) The caller tricks the victim and persuades him/her to give away its personal and confidential data such as a one-time password (“OTP”), credit card number/debit card number, card’s Card Verification Value number (“CVV”), which is 3 to 4 digit number printed on the flip side of the card, expiry date, password, ATM pin, internet banking login ID and password, etc.

(c) The fraudster can easily carry out illegal financial transactions using the name of the victim with all such crucial information. 

It is advisable to take the following precautions, namely:

(a) Not to respond to email / SMS / phone calls that attempt to fraudulently withdraw money from one’s account via internet banking. This is because the calls are considered fraud calls. Neither banks nor their representatives send their customers email / SMS or call them on phone to ask for such personal information, password, or one-time SMS (high security) password.

(b) Inform banks about emails / embedded links / calls that ask the customers to update or verify user id / password / debit card number / PIN / CVV etc. Post informing the bank, it is advisable to change passwords immediately, if one has accidentally revealed their credentials to callers.

(c)  Not to provide any personal/confidential information on a page that might come up as a pop-up window;

(d) Not to divulge information like password, PIN, TIN because these are strictly confidential information and are not known even to employees/service personnel of the bank, and must not be shared, even if it is asked for by someone;

(e) Not to provide identity proof to anyone without genuine reason;

(f) Not to click on any links in any email, that might appear as key information in order to access the bank’s site;

(g) To access the bank’s website only by typing the URL in the address bar of the browser;

(h) To not provide bank account details to emails that are offering a job or claim that one has won a lottery;

(i) To avoid opening attachments from emails of unknown senders;

(j) To avoid accessing internet banking accounts from cyber cafes or from shared PCs;

(k) To look for the padlock symbol either in the address bar or on the status bar, but not within the web page display area, when accessing the bank’s website;

(l) To verify the security certificate by clicking on the padlock; and

(m) To keep the system up to date.

It is advisable for the victims that: 

  • they should lodge a complaint with the concerned bank and block the credit card/debit card / net banking holder/account holder immediately; and
  • they should collect information regarding the mode of the transaction so that they can describe the transaction, from the concerned bank. Before lodging a complaint in the nearest police station explaining the complete incident, it is advisable to keep the following documents in place, namely: 

(a) bank statement from the concerned bank of last 6 months is to be collected; 

(b) copies of SMSs that were received in relation to the alleged transaction to be made; (c) copies of bank passbook to be made; and 

(d) copy of identity proof and address proof as shown in bank records to be made.

Cyber complaint regarding data theft

The illegal copying and selling of copyrighted data or software code in the open market without the permission of the owner’s company is called data theft. When one uses a single user license for multiple users, then data theft is said to occur. The other instances of data theft are, (a) when one makes a duplicate CD or DVD of one’s software CD and sells it in the market; and (b) if an employee carries a software code made by his / her company and reproduces it with different names and sells it in the market. One must take preventive measures in order to prevent data theft of such nature. It is advisable to:

(a) copyright the program code/software/data;

(b) create a license agreement with the customers/users;

(c) provide a trial version of one’s code;

(d) not share complete code/data that is required to run the software with a single person in one’s company;

(e) obfuscate one’s code so that it is difficult to break;

(f) to not allow employees to copy/share the data/software on their personnel gadgets/emails / external drives;

(g) to make company devices secure in order to prevent theft from devices;

(h) always assign specific duties to each employee;

(i) to make non-disclosure agreement with employees;

(j) to make an inventory of hardware/software that is issued to employees;

(k) to train employees and prepare them for privacy breaches and phishing attempts;

(l) to create user accounts for each employee to prevent unauthorized users from gaining access to one’s business computers. One must be mindful of the fact that laptops can be stolen easily. Thus, one should ensure that laptops are locked when unattended;

(m) to prevent outsiders from gaining access to private information on one’s network and enable one’s operating system’s firewall or purchase reputable firewall software.

 Apart from these general precautions, the victims must:

(a) make changes in code/data that has been stolen in order to differentiate the older version from the new version immediately;

(b) find out the logs of the system in order to detect the unauthorized connections from the server, if the software is directly connected with the company’s server;

(c) contact the clients and inform them about the possibility of them using pirated data / stolen data ;

(d) contact the seller via decoy customer in order to know about the modus operandi, i.e., the ways in which the alleged data is being sold; and 

(e) make an image copy of all devices before proceeding further and never try to look into gadgets that are used by suspected employees. Prior to lodging a complaint with the nearest police station explaining the complete incident, it is prudent to collect all the documents, namely: (1) mirror image/copy of the data that has been stolen; 

(2) copyright certificate of data in question; 

(3) details of suspected employee who took data in question; 

(4) copies of documents related to the suspected employee, namely their appointment letter, non-disclosure agreement; list of duties that are assigned; list of gadgets that are assigned to the suspected and list of clients with whom the suspect is in touch; 

(5) proof of the sale of copyright data to any client; 

(6) devices used by a suspect while working with the company.

Cyber complaint regarding financial fraud over email 

Once an email account has been hacked, it may be used to cause financial fraud in the following ways:

(1) One can send SOS emails to all the contacts, and ask for money by citing an emergency such as wallet got lost in a foreign country;

(2) One can send offensive messages to friends and relatives and ask for ransom in exchange for not sending any offensive messages;

(3) Sending emails to clients and customers and asking for payment of dues/remittances in a different account, thereby swindling with the money of account holder; and

(4) Using unauthorized access to email in order to gain access to other online accounts, such as other email accounts, net-banking accounts, and social media accounts. 

It is advisable for the victim to contact the email service provider and request them to temporarily block that account in order to prevent misuse by the hacker. This request can be supported by documents such as ID proof and screenshots of earlier emails etc. The victim can send emails and messages to all their contacts from an alternate email account alerting them not to respond to emails coming from the hacked email. It might be difficult to ascertain all the service providers wherein a hacked email account is given as the email address for communication. Nevertheless, one can write to the service providers, as many as possible, to not entertain any request from the compromised email account without doing manual checks with the original account holder.

If the compromised email account has been used to send emails, then one will take print of the alleged email which has been received by one’s contacts as opposed to those which have been forwarded. It is prudent to collect all documentary evidence, such as screenshots and bank transaction statements that illustrate that a hacked account has been misused. 

Cyber complaint regarding cyber-crime such as online abuse, online stalking, mobile apps etc

Offences such as trolling, online threats, online harassment, online stalking, and virtual mobbing fall under the realm of social media offences. Trolling is a form of baiting online which involves sending abusive and hurtful comments across all social media platforms. When someone repeatedly attempts to impose unwanted communications or contacts one in a manner that could be expected to cause distress or fear, then it is called “online harassment”. On the other hand, “stalking online” is a form of harassment that can involve frequent unwanted contact or interference in someone’s life. “Virtual mobbing” is said to take place when a number of individuals use social media or messaging to make comments about another individual, usually because they are opposed to the person’s opinions. The sheer volume of messages may amount to a campaign of harassment. 

The victims of online abuse and online stalking often do not know when to call the police. This is one of the most commonly seen crimes that occur on social media. People are threatened, bullied, harassed, and stalked by others on social media.  It is advisable to take the following precautions, namely

(1) Block profiles from public searches;

(2) Restrict the number of people who can find you via online search;

(3) Limit the information that people can learn about you when searching on the net;

(4) Log out after each session;

(5) Do not share social media credentials;

(6) Do not accept friend requests from unknown people;

(7) Do not click on suspicious links;

(8) Keep the privacy settings of your social media profile at the most restricted level especially for the public/others; and

(9) One must apply precautionary principles while sharing anything online.

It is advisable to be in touch with the support team or helpdesk team if social media offences happen and on a personal front, immediately send an email/message to all your contacts asking them not to respond to the fake profile. One is free to make a cyber complaint in the nearest police station, describing the complete incident. Furthermore, one can take screenshots of the alleged fake profile wherein the URL of the said profile is clearly visible. One must save the soft copy of all the documents and provide them to the investigating officer on a CD-R and also provide them with a hard copy. 

These kinds of offences could either fall under cyber dependent crimes, which can only be committed through the use of online devices or could be cyber-enabled crimes, which are traditional crimes that can be increased in scale by using computers. The aforesaid could be a mix of both depending on facts and circumstances.

  1. Commonly used technology agreements 
  2. Sponsored research agreement

An institution enters into a sponsored research agreement when it identifies that there is a mutual interest and benefit with a sponsor for furthering institutional and research objectives in a manner consistent with its status as an academic institution. The details of the research are captured in the statement of work, which is annexed to the agreement. 

The Principal Investigator is identified and appointed for the research program, who shall supervise the research program. If in any case, the principal investigator is unable to continue serving and a successor that is accepted by both the parties is unavailable, then the agreement may be terminated by either party. The period of performance will be identified, keeping in mind the start date and the completion date.

The research can either be performed on a fixed-price basis or on a cost-reimbursement basis. For the latter mode of reimbursement of costs, the sponsor will reimburse the institution for direct and indirect costs that will be incurred in the performance of research. However, the total reimbursements will not exceed the total estimated project cost, without getting the written authorization from the sponsor. Oftentimes, the payment schedule is either in the form of time-based or in the form of milestone-based. The institution may seek a payment schedule that provides funding in advance of incurring costs for the research.

This agreement may be terminated if (a) there is a material breach; (b) there is a loss of the principal investigator; (c) it is convenient for the Sponsor to do so, and (d) either of the parties terminates the agreement.

The institution will be free to publish the results of the research after providing the sponsor a reasonable time, so that sponsor can review each publication in order to identify the patentable subject matter and to identify inadvertent disclosure of confidential information. In the latter case, if requested by the sponsor, the institution shall remove such matter from the publication. The sponsor may also request that patent applications are needed to be prepared and filed in advance of publication.

This agreement shall exclude the copyrights and inventions of the sponsor in relation to the research from the ambit of the agreement. Such copyrights and inventions will have to be produced/composed/reduced to practice in the performance of the research solely by the personnel of the sponsor without using the institution’s administered funds or facilities.

In case of inventions that are conceived and/or first reduced to practice jointly by the employees/students of the institution and personnel of the sponsor in performing the research, the end product will be considered as a joint invention if the sponsor significantly uses the funds and facilities of the institution. Zeroing down the party who shall have the first right to file a patent application on a joint invention in the names of both parties is oftentimes negotiated. It is pertinent that an Intellectual Property Office is in place that takes care of the inventive disclosures made to the institution that in turn will be notified to the sponsor.

  1. Cloud computing services agreement

The ways in which services are delivered through the internet is called cloud computing. The services range from providing data storage to enabling users to access applications on remote servers and then access all the data via the internet. Cloud computing services can be either public or private. While public cloud services provide their services for a fee, private cloud services limit their service to be enjoyed by a few people. It is possible for cloud services to be hybrid in nature. Hybrid cloud computing services can be hosted on a network in order to provide it to specific clients and could also be provided online for a fee. Cloud computing service is a combination of three services, namely, software as a service (“SaaS”), infrastructure as a service (“IaaS”), and platform as a service (“PaaS”). 

A cloud computing service includes services such as cloud service, virtual servers, dedicated hosting of data, co-location of services, website hosting, etc. The first step in availing of an IaaS is setting up an account and paying the fees. Fees may range from setting up fees, recurring service fees, or one-time fees for availing of optional services. It is to be clarified that the service provider owns and operates hosting infrastructure that consists of selected equipment housed within a single data centre space that is managed by the service provider.

The cloud computing service provider can include a “zero-tolerance spam policy”. It may charge the account holder that sends unsolicited e-mails a cleanup fee, whose amount will be left to be decided by the cloud computing service provider. It will include a clause on acceptable and unacceptable content, in the form of the following:

  • The customer will not engage with content that will cause unnecessary/excess traffic. This is because the intent of the service provider is to provide space and not serve as an off-site storage area for electronic files, such as pirated software, hacker programs or archives etc. 
  • It does not support the storage of sexually explicit, obscene or pornographic content, in text or graphics. It does not support speech or images that are (i) offensive; (ii) profane; (iii) hateful; (iv) threatening; (v) harmful; (vi) defamatory; (vii) libellous; (viii) harassing; (ix) discriminatory on the basis of race, ethnicity, religion, gender, sexual orientation and physical disability.

The service provider can clarify that the internet protocol numbers (“IP numbers”) that it has provided/assigned in connection with the services shall remain its property, and are not portable, and thus cannot be transferred to the customer. The service provider will have verification rights, modification rights, “swapping out” rights, and revocation rights with respect to customers’ IP addresses. 

The service provider will acquaint the customer with the acts that are prohibited, i.e., prohibition to reverse engineer and its right to report acts of illegal activities like, trafficking in obscene material. Moreover, it can clarify its stance on billing terms and refund policies for first-time users and repeat users. It may retain the right to change prices and the right to increase the number of resources in a specific plan. The customers may be made aware of such developments prior to such increases before the time to renew the contracts and would be asked to approve the price escalations or terminate the service agreement. They could also agree to the maximum liability that will be incurred by the IaaS provider for all the damages, losses, and costs resulting from the agreement.

A cloud computing services agreement may otherwise be construed as a cloud service level agreement. This agreement is entered into between the cloud service provider and the customer who will use the cloud services. This agreement entails the responsibility of the customer and remedies that are available to the customer if the cloud service provider fails to meet its commitments. Such an agreement will not apply to the commitments of third-party service providers, including customer end-users. However, this agreement will be read along with terms of service, service level agreement, privacy agreement, and acceptable use policy and thus, shall not be independently considered while identifying the third party. The ambit of service would include maintenance of services that would include looking after the maintenance of software, database index rebuilding, upgrades of software and hardware, and upgrade of the network. Identifying the service maintenance hours is important to identify the business hours of the service provider. 

This agreement covers data retention clauses. This clause provides for the number of days for which the cloud service provider makes a full backup copy of the customer site database and the number of days within which it files such customer information. It answers questions such as, “For how many days is the backup data retained?” The answer will vary depending on the customer’s preferences, i.e., the number of days for which backup data will be retained will vary for a customer who has configured the retention period for the cloud services from the customer who has not configured the retention period for the cloud services. Generally, the number of days of the former is more than the latter. The other aspect of this clause is the nature of data that is retained by the cloud as a part of its service. For instance, the nature of data can range from copies of system activity logs to site access logs.

Cloud support policy forms an integral part of this agreement. This gives details on the severity levels as per the incident report-related tickets that are handled. Ticket response goals specify the time within which investigation of the problem begins, as opposed to considering the length of the time within which such problem will be resolved. Customer support is provided on matters related to the features and functionality of the cloud services, i.e., cloud dashboard, and not for matters associated with software that is installed in a particular cloud.  A cloud dashboard is synonymous with a dashboard that records the communication between the customer and the cloud service provider. This can include records of invoices generated. 

  1. Software licensing agreement

An institution enters into a software licensing agreement when it owns copyright-protected software in source code, executable code, or application code that combines together to form a program related to specific functionality and desires to have the program developed and commercialized. For this reason, it is imperative for the institution to enter into an exclusive digital healthcare software license agreement with another entity. The scope of such an agreement may or may not include derivative work. Derivative work may include translations of the program to other foreign or computer languages, adaptations of the program to other hardware platforms, abridgments, condensations, and revisions. It may also include software that incorporates all or any part of the programs and modifications or enhancements created by the licensee. 

The other party apart from the licensor and licensee is the end-user. An end-user is a third party who has been granted the right to use, reproduce, perform or display the program or derivative. It is to be noted that, the end-user may not be granted any rights to sublicense or distribute such work. It is important to differentiate between a licensed product and a licensed service. On one hand, the program and derivatives may be construed as a licensed product, whereas any service that is enabled by / implements/copies / makes use of a licensed product.

A program may have multiple connotations. It could encompass (a) software and computer programs in the form of source code, or object code or in application code format as it would exist on the effective date; (b) updates to software and computer programs and its related documentation, i.e., correction of any substantial defects, fixes of any minor bugs, minor enhancements to the software like updates that are identified as a change to the version number to the right of the decimal point. However, the following may not be regarded as a program; if there is a new release of software or a computer program that incorporates substantial changes or additions that (a) provide additional value and utility; (b) may be priced and offered separately as optional additions to such software or computer program and/or (c) are not generally made available to customers or resellers without a separate charge, i.e., releases identified by a change to the version number to the left of the first decimal point. 

If the entity further sub-licenses and receives a payment to this effect, then it will be considered as sub-license income. It excludes royalty and profit-sharing payments that are received by the entity and its affiliates from sub-licensees. It includes license fees, milestone payments, license maintenance fees.

Software licensing agreements come into the picture in the case of licensing software packages for billing and customer care purposes. The major challenge faced by in-house counsels is that there is a failure to adequately describe the software being licensed. Oftentimes, it becomes difficult to foresee the changes that will take place in the organisation of the customer and the business. The other challenge is that there is a possibility that one overlooks the “unresolved rights” that will arise once the current software develops/enhances in the future.

  1. Software development agreement

Otherwise referred to as a Masters Services Agreement, this sets out the terms on which a developer sells and transfers a customized software to a client and the client further incorporates the software into its products, services or processes. A description of the software that will be developed is added as an appendix, rider or as an exhibit to the agreement. This acts as capturing the details of the scope of work or a statement of work.

The client engages the developer to deliver unique and proprietary software and the developer accepts the engagement to develop the software. In case of a change in the scope of work, it shall provide a change request to the developer. In turn, the developer will provide the client with a change request response. Taking the change request and the change request response in mind, the work will be amended by means of a written addendum, which will be jointly executed as an exhibit to the agreement.

The client and the developer will prepare an acceptance test plan along with acceptance test procedures that are suitable for verifying that the software meets the agreed requirements of the specification. The acceptance test plan will describe the ways in which the client acceptance test will be carried out and shall contain a detailed description of the tests that are to be performed along with acceptance criteria. The client will approve or not approve the change in the software. It shall be considered as “deemed to be accepted” if the client elects to operate the software before approving it. Refusal to approve the acceptance test will lead to a dispute. If the developer does not dispute the rejection, then it will send a timetable for repairing the errors that are associated with the software to the client. The developer can send a written notice to the client after the repairs have been completed and request the client to resume the acceptance test promptly.  Once the acceptance test is approved, then it will be succeeded by the approval period. Last but not the least, the software will be stated to have been “commissioned” when the client acceptance test is successfully completed and is approved. The client will pay the developer a fixed fee for the work as per the payment schedule that will be attached to the agreement as an exhibit. A deposit amount will have to be paid to the developer initially for commencing the work. This deposit will be a certain percentage of the total amount that is agreed as fees. In terms of expenses, the developer will obtain the approval of the client if they apprehend that travel will be required, as this will amount to a necessary expense. If a developer incurs cost towards developing software or creates a library of commercial software, then the client may reimburse the developer for such costs, once these are approved.

Once the developer’s invoice for fees and expenses reaches the client, then it shall remain due and payable by the client. If the invoices are not paid/cleared, then interest will be added to the unpaid amount. The developer has the right to suspend all the work unless the invoice is cleared. 

The term of the agreement will run parallel with the date on which the developer receives complete payment for the work. However, if one of the parties acts and thus causes material breach of the contract, then the non-breaching party will notify the breaching party of such material breach. Post the receipt of written notice, the breaching party will be allowed to cure the defect within a certain number of days. If the client commits a default and becomes a defaulting party and the developer terminates the agreement due to such default, the client will deliver to the developer all documents related to the software that was furnished by the developer. 

The developer is not expected to have developer tools. Developer tools encompass the tools developed by the developer prior to software. Such tools are designed to perform generalized functions that are not necessarily specific to the specific requirements of the client. Such tools would not contain the confidential information of the client. Barring the developer tools, the development of the software by the developer will be regarded as “work for hire” as per the provisions of the copyright law. This means that the software will be the sole property of the client. If a work does not qualify as “work for hire”, then the developer will assign the right, title and interest in the software to the client, without seeking further compensation, apart from the fees. However, the moral rights of the developer would not be eligible for assignment under applicable law. 

The software is provided on an “as is” basis. Thus, it is without any warranty or representation that it is fit for a particular purpose. The developer cannot guarantee that the software will be free from errors, or it shall operate without any interruptions. The aforesaid exclusions and disclaimers play a critical part in charging the price for the software. However, the developer may warrant that the work will be performed in a manner that is in conformity with the generally prevailing industry standards. If there is any material deficiency in the work, the client is required to report it to the developer in writing. Every grievance has a remedy. Thus, for such deficiencies, the exclusive remedy of the client will be re-performance of work in a commercially reasonable time. If there is any bona fide claim of intellectual property infringement, the developer may promptly correct the software so that it does not infringe any intellectual property. Otherwise, the developer may secure the right of the client by ensuring that the software is used without infringement at its own expense. The developer will not be responsible for delays/failures in performance that arise from acts that are beyond their control, namely, delays that are excused.

  1. Technology transfer agreement

This agreement is between parties, one of whom would have substantial expertise in product development and manufacturing of its own technology products. The proprietary information gathered by virtue of entering into a technology transfer agreement is referred to as confidential information. Reference may be made to other agreements such as the share purchase agreement between purchaser and seller in this agreement. The purchaser buys the rights, titles, and interests in the technology for a price known as the purchase price.

Conclusion

To conclude, the name of the agreement does not matter when it comes to accessing the validity and nature of the agreement. Instead of the legal jargon that is common in the technology world, it is important to be mindful of the essence of the agreement. 

References

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