UK Audit Rights Should Reflect The Relationship Between Customer And Service Provider

Keywords: UK, audit rights, licensing, outsourcing

A recent English High Court Decision is a useful reminder that audit provisions are not always standard form "boiler plate" provisions which can be adopted in a uniform way across a variety of licensing or outsourcing arrangements. This is particularly relevant in scenarios where the Service Provider may acquire limited rights to use data generated during the course of the contract for its own independent purposes such as the provision of analytics services and/or where the Service Provider is engaged in providing similar services to competitors of the Customer.

The Decision

The English case, 118 Data Resource Limited v. IDS Data Services Limited (2014 EWHC3629(CH)) involved licensing of a database of business contacts by one business to another – in fact one of its competitors. The agreement contained a number of restrictions on how the Licensee could use the database. There were also other commercial