Hunton Retail Law Resource

On April 10, 2018, SAP announced an updated pricing model to address indirect/digital access to its digital core products—SAP ERP, SAP S/4HANA and SAP S/4HANA Cloud. In addition, SAP announced that it will separate its license sales department and auditing departments. These moves are in response to intense pressure SAP has experienced from existing and potential customers that culminated last year following (1) the decision rendered in favor of the software giant against one of its customers, where £55 million in damages was alleged by SAP, and (2) its $600 million claim against the world’s largest brewer which was recently reported as having been settled.

The retail industry has seen a rapid adoption of chat robots, or “chatbots,” by retailers looking to deploy new technologies to more effectively engage consumers and drive sales on their e-commerce platforms. So what exactly are chatbots? Chatbots are interactive software that can converse and interact with end users, much like a customer service representative would, by leveraging the power of artificial intelligence.

On September 5, 2017, the FTC announced that Lenovo, Inc. (“Lenovo”) agreed to settle charges that its preloaded software on some laptop computers compromised online security protections in order to deliver advertisements to consumers. The settlement agreement (the “Settlement”) is between Lenovo, the FTC and 32 State Attorneys General. 

In May, Hunton & Williams is pleased to host in-person forums in its Charlotte and Dallas offices, bringing together industry experts in technology and procurement to discuss some of the most pressing legal and business issues facing customers in this space. These forums are hosted with the support of ISG. Our program topics include software audits and contract lifecycle management. These forums are designed to provide an in-depth understanding of these issues, as well as key practical and legal principles to apply on a routine basis.

Emboldened by its recent victory in SAP v. Diageo (2017) EWHC (TCC) 189, SAP may become even more opportunistic when it comes to auditing its customers’ use of various SAP products. On February 16, 2017, the England and Wales High Court of Justice, Queen’s Bench Division (Technology and Construction Court) ruled that the use by Diageo’s sales representatives and customers of various software systems that pulled data from and pushed data to Diageo’s instance of mySAP ERP, even though there was no direct access to or use of mySAP ERP by such sales representatives or customers, constituted impermissible access to and use of mySAP ERP under Diageo’s license agreement with SAP.

As the retail industry continues to invest in and leverage new automation technologies to meet organizational efficiency and cost reduction goals, a growing number of retailers are looking to robots, or more specifically, service delivery automation or robotic process automation (“RPA”), as a solution. What is RPA? In the abstract, RPA is the substitution of human workers with automation. In the real world, according to the Institute for Robotic Process Automation, that translates to software robots that capture and interpret data from existing applications to process transactions, manipulate data, trigger responses and communicate with other digital systems. RPA doesn’t mean that robots will soon be sitting in a cubicle in accounting...at least not yet.

Companies across all industries, including retail, are seeing a significant uptick in software audits and similar software license compliance reviews. These audits can disrupt the day-to-day operations of even the most efficient IT departments and result in additional license fees, back-maintenance payments, penalties for noncompliance and external legal fees. The more aggressive software licensors may also threaten breach of contract claims, infringement claims, remote disabling of software, suspension of maintenance and other more disruptive practical measures. However, there are ways to limit exposure to such costly software audits and the associated risks, and to even prevent them from occurring in the first place.