Legal Definitions - computer-information transaction

A computer-information transaction is a legal agreement where the main objective is to deal with digital information or software. This includes activities such as developing new software, making changes to existing digital data, selling or giving away digital assets, or granting permission to use software or data under specific conditions.

Here are some examples to illustrate this concept:

• Custom Software Development Contract:

  Imagine a financial services company that hires a specialized software development firm to build a unique, proprietary algorithm for high-frequency trading. The agreement outlines the specifications for the software, the development timeline, and the transfer of all intellectual property rights for the completed algorithm to the financial company.

  This is a computer-information transaction because the primary purpose of the agreement is to create new computer information (the trading algorithm's code and logic) and to transfer the ownership and usage rights of that specific computer information from the development firm to the financial services company.

• Software as a Service (SaaS) Subscription Agreement:

  Consider a marketing agency that signs up for a monthly subscription to a cloud-based project management platform. The agreement grants the agency access to the platform's features, allows them to store their project data, and use the software for their team, all managed by the service provider.

  This exemplifies a computer-information transaction because the agreement's core function is to license the use of computer information (the project management software and its functionalities) and the associated rights (the right to access and utilize the service) to the marketing agency, without transferring full ownership of the software itself.

• Sale of a Digital Database:

  Suppose a market research firm decides to sell its comprehensive database of historical consumer purchasing trends to a large retail corporation. The agreement specifies the format of the data, the terms of its delivery, and the rights the retail corporation gains to analyze and utilize this data for its business strategies.

  This constitutes a computer-information transaction because the central element of the agreement is the transfer of a substantial collection of computer information (the digital database) and the associated rights (the right to possess, access, and use that data) from the market research firm to the retail corporation.