Were you aware that if you supply SaaS software to public authorities they can be legally obliged to release details of your SaaS agreement to competitors?
Public Tendering and Disclosure
Atos won a major tender to supply an IT system to a Government department to handle information requests and transactions between Government departments and the public. Atos was the only bidder for the tender.
In 2007 an individual made a request under the Freedom of Information Act (FOI) for disclosure of particular details of the IT agreement. The details requested included information on the liability of Atos, benchmarking and prices. The Data Commissioner ordered the Government department to disclose the details requested.
Right to Refuse Disclose of Confidential Information
The Government department refused to disclose the information pursuant to its rights under section 43 of the FOI, namely that the information requested was a trade secret and that disclosure would damage the commercial interests of the parties. An appeal was made to the Information Tribunal, and last week the Tribunal agreed with the Data Commissioner’s office and ordered that disclosure of some of the details requested was in the public interest.
Are Prices Trade Secrets?
What may be reassuring to SaaS suppliers is that not all of the information requested had to be disclosed on appeal. The Tribunal agreed with Atos that its pricing model was a trade secret and disclosure of this “could undermine the owner’s business and give competitors a commercial advantage”. The Tribunal also agreed that the exact location of the Atos data centre must not be disclosed, for security reasons, but that the country of its location should be disclosed to show that there was compliance with the Data Protection Act.
Protecting Confidential Information
The above illustrates the real dangers of confidential information being disclosed by a customer, by law. In order to limit and control the information which can be requested and disclosed under a FOI request ,it is essential that adequate clauses are included, not just in any NDA which is signed during the tendering process, but also in the confidentiality sections of the final SaaS agreement.
Irene Bodle is an IT lawyer specialising in SaaS agreements with over 10 years experience in the IT sector. If you require assistance with any SaaS, ASP, software on demand contracts or any other IT legal issues contact me:
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