NEGOTIATING AGREEMENTS
In negotiating agreements with wireless service providers, it is important to specify who owns user data. User data may include the identity of a user of a wireless site, with tracking mechanisms to identify the user’s path. This becomes valuable information that can be sold to marketers and provides additional sources of revenue for wireless service providers. A user’s mobile telephone number or mobile identification number (MIN) may be accessed by service providers. Also, by using a technology known as the global positioning system technology, or GPS, service providers are able to detect a user’s location with precision. In fact, the Wireless Communications and Public Safety Act of 1999 which is scheduled to take effect in October 2001, directs wireless service providers to precisely identify a user’s geographic location, within a 125-meter radius. Site operators, therefore, should ensure that their privacy policies are honored and that their user data is protected.
There are various ways to incorporate these privacy concepts in an agreement with a wireless service provider. First, the site operator should spell out its ownership of the user data and should define user data to include any data generated by use of the site whether users provide such data directly or indirectly to site operators or to service providers. Second, a site operator should request a number of representations and warranties that the service provider will not, without first having received the user’s consent: (1) track user activity; (2) disclose user information to third parties; or (3) target users for advertisements or promotions.
Another deal term that should be clarified includes restrictions on content displayed on a wireless screen. Wireless service providers will seek a representation that the operator’s site will not violate, among other things, any privacy rights, copyrights, or be obscene or defamatory. A site operator may agree to indemnify the service providers in the event that any such claims are filed against them arising from content on the operator’s site.
EXCLUSIVE AGREEMENTS
Content providers and wireless service providers may enter into exclusive agreements. Exclusivity in this context means that a content provider will use a single service provider exclusively, and that service provider is restricted from using content from competitors to appear on the service provider’s home page (or in wireless parlance, the homedeck). For example, if a service provider were to enter into an exclusive agreement with a company that facilitates investor trading, then the service provider would not be able to accept financial investing vehicles from competitors to feature on its homedeck. A content provider may negotiate better rates with the service provider because of the opportunity cost associated with limiting the potential audience by using a single carrier.
Content providers should anticipate wireless delivery in their agreements. This issue is relevant for both wired service providers and content providers. If a content license agreement is for a wired platform, then both content and service providers should anticipate their ability t
(1) use or modify content on wireless platforms; (2) uncouple data, or the ability to take data apart to deliver on a wireless system; (3) provide for increased revenue streams; (4) define narrowly or broadly the platforms on which the content is going to be delivered; and (5) provide scalability, or the ability to handle large volumes of data.
The owner of content, or the content provider, will want to define the platforms, such as WML, as narrowly as possible, to retain greater control over what the licensee can use as the technology changes. In addition, there is the potential for greater sources of revenue in the event that the licensee wants to deliver on platforms other than those specified in the license.
The licensee, on the other hand, would want wide-ranging, unfettered rights to existing and developing technology phrased as, for example, “all media, now existing or to be developed in the future.” This would keep the licensee’s costs constant as new technology emerges, and would give a licensee greater control over the use of the content.
Another issue of concern for content providers is the quality of content delivery over a wireless medium. The content packager and service provider should create a version suitable for wireless capabilities so that the user has a positive experience, rather than simply distributing the same version as is delivered on the Internet by cable or wire. For example, a version that is loaded with graphics might not appear as quickly and clearly in a wireless format as it does by way of cable or wire delivery on the Internet.
Whether a content provider should allow a content packager the right to retransmit or redistribute its content is another concern. This issue straddles both wired and wireless environments. Content providers should determine whether retransmission is permitted under their third-party licenses.
Content providers should ensure that content packagers give appropriate attribution by ensuring that copyright and trademark notices and logos appear on each wireless page (or “card”) or, taking into consideration that the wireless screen is so small, by providing a “powered-by” link where there is a link to the copyright or trademark notice or logo. This issue may be addressed by a content provider requiring such notices or a “powered-by” link as a condition precedent to granting the licensee the right to use the content.
CONCLUSION
The use of mobile devices for delivery of information is just in its infancy. The current technical limits of these devices and the lack of national standards inhibit their wide acceptance. However, as these small devices become more powerful and useful, these markets will explode. The unprecedented growth of the Internet in the past decade may appear to be a small forerunner of this exciting new level of technology.
Peter Brown and Richard Raysman are partners at Brown Raysman Millstein Felder & Steiner LLP in New York. Odette Wilkens, a law clerk at the firm, assisted with the preparation of this article.
