REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
January 23, 2024
FROM
LYNN FYHRLUND, Chief Information Officer, Innovation and Technology Department
SUBJECT
Title
Non-Financial Terms of Service and End User License Agreement with Owl Labs Inc. for Video Conferencing Devices, Software, and Services
End
RECOMMENDATION(S)
Recommendation
1. Approve the following non-financial agreements, including non-standard terms, with Owl Labs Inc. for the use of Owl video conferencing devices, software, and services, for the period commencing on the date of first use of the hardware and software and continuing until terminated:
a. Terms of Service
b. End User License Agreement
2. Authorize the Chief Information Officer, Assistant Chief Information Officer, or IT Division Chief to electronically accept the Terms of Service and End User License Agreement in Recommendation No. 1, and future updates to the agreements, subject to review by County Counsel, provided that such updated terms do not substantively modify the terms of the original agreements.
3. Direct the Chief Information Officer to transmit printed copies of any updated terms to the Terms of Service and End User License Agreement in Recommendation No. 1 related to the use of hardware and software that are electronically accepted to the Clerk of the Board of Supervisors within 30 days of execution.
(Presenter: Lynn Fyhrlund, Chief Information Officer, 388-5501)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Operate in a Fiscally-Responsible and Business-Like Manner.
Improve County Government Operations.
FINANCIAL IMPACT
Approval of this item will not result in the use of Discretionary General Funding (Net County Cost). The Terms of Service (TOS) and End User License Agreement (EULA) with Owl Labs Inc. (Owl) are non-financial in nature and do not commit the County to make any purchases. If future purchases are made under the TOS and EULA, the Innovation and Technology Department (ITD) will adhere to County purchasing policies and return to the Board of Supervisors (Board) for approval, if necessary.
BACKGROUND INFORMATION
ITD is the County’s central Information Technology (IT) department that provides comprehensive IT support and infrastructure services. ITD and other County departments utilize various video conferencing equipment for enhanced hybrid collaboration and improved participation during video conference meetings.
The Meeting Owl 3 is an all-in-one conference camera, microphone, and speaker allowing for immersive and inclusive hybrid meetings. Currently, ITD is utilizing the Meeting Owl 3 to improve productivity and participant engagement in meetings. The product encourages more organic conversations by providing 360-degree views of the meeting site by showing the individuals that are speaking and attending, thus simulating an in-person meeting. It seamlessly changes the view between participants so that reactions and responses can be better gauged. ITD is required to accept the TOS and EULA to comply with County Policy. Approval of the TOS and EULA will allow ITD and other County departments to encourage more dynamic conversations and a deeper understanding between participants.
The TOS and EULA are Owl’s standard commercial contracts, which include terms that differ from the standard County contract and omit certain County standard contract terms. The TOS and EULA are non-negotiable clickwrap agreements accepted by click to accept. The non-standard and missing terms include the following:
1. Governing law for the TOS and EULA is the Commonwealth of Massachusetts.
• The County standard contract requires California governing law.
• Potential Impact: The TOS and the EULA will be interpreted under Massachusetts law. Any questions, issues or claims arising under the TOS or EULA will require the County to hire outside counsel competent to advise on Massachusetts law, which may result in fees that exceed the total TOS or EULA amount.
2. Owl may modify the TOS at any time without notice upon posting to the website.
• County Policy 11-06 requires that any changes to the contract be reduced to writing, executed and attached to the original contract and approved by the person(s) authorized to do so on behalf of Contractor and County.
• Potential Impact: The County could be agreeing to new terms without review by anyone, including County Counsel, and without approval of the new terms by the Board. County Counsel cannot advise on whether and to what extent Massachusetts law may affect the enforceability of unilateral changes to the terms.
3. Owl may assign the TOS and the EULA without notice and without the County’s consent in connection with an acquisition, sale or transfer of all or substantially all of its assets, stock or business by sale, merger, consolidation, or similar transaction.
• The County standard contract requires that the County must approve any assignment of the contract.
• Potential Impact: Owl could assign the TOS or the EULA to a third party or business with which the County is legally prohibited from doing business due to issues of Federal debarment or suspension and conflict of interest, without the County’s knowledge. Should this occur, the County could be out of compliance with the law until it becomes aware of the assignment and terminates the TOS or EULA. County Counsel cannot advise on whether and to what extent Massachusetts law may permit or restrict a party’s right to assign without an express provision in the TOA or the EULA.
4. Under the TOS, the prevailing party is entitled to recover all court costs and reasonable attorneys’ fee. There is no provision in the EULA addressing each party’s responsibility for paying attorneys’ fees.
• The County standard contract requires each party to bear its own costs and attorney fees, regardless of who is the prevailing party.
• Potential Impact: Under the TOS, if either party institutes any legal proceedings related to the TOS, the prevailing party will be entitled to recover reasonable attorneys’ fees and costs, which could exceed the total TOS amount. With respect to the EULA, County Counsel cannot advise on, whether and to what extent, Massachusetts law may affect a party’s requirement to pay the prevailing party’s attorneys’ fees and costs in a legal action where no specific provision is provided in the EULA.
5. The County is required to indemnify Owl under the TOS and the EULA from any claims arising out of County’s (i) use or misuse of the Products; (ii) communications, transactions, or dealings with third parties initiated through the Products; (iii) violation of the TOS, EULA or any law; (iv) breach of the representations, warranties, and covenants made by County. Owl may, at County’s expense, assume the exclusive defense and control of any matter for which the County is required to indemnify Owl.
• The County standard contract does not include any indemnification or defense by the County of a contractor.
• Potential Impact: By agreeing to indemnify Owl, the County could be contractually waiving the protection of sovereign immunity. Claims that may otherwise be barred against the County, time limited, or expense limited could be brought against Owl without such limitations and the County could be responsible to defend and reimburse Owl for costs, expenses, and damages, which could exceed the total TOS or EULA amount. County Counsel cannot advise on whether, and to what extent, Massachusetts law may limit or expand this term.
6. Neither the TOS nor the EULA requires Owl to meet the County’s insurance standards as required pursuant to County Policies, 11-05, 11-07 and 11-07SP.
• County policy requires contractors to carry appropriate insurance at limits and under conditions determined by the County’s Risk Management Department and as set forth County policy and in the County standard contract.
• Potential Impact: The County has no assurance that Owl will be financially responsible for claims that may arise under the TOS or EULA, which could result in expenses to the County that exceed the total TOS or EULA amount.
7. Under the TOS, the County releases Owl from all claims arising from access to the website, services or device and specifically Owl disclaims all liability for damages to or any viruses that may infect, County’s computer, telecommunication equipment, or other property caused by use of the Owl website, services or device. Owl’s maximum liability to the County under the EULA is limited to the amounts paid by the County in the 12 months prior to the event giving rise to the claim, without any exclusions.
• The County standard contract does not include a limitation of liability.
• Potential Impact: Owl has no liability whatsoever to the County under the TOS. Under the EULA claims could exceed the liability cap and EULA amount leaving the County financially liable for the excess. County Counsel cannot advise on, whether and to what extent, Massachusetts law may limit or expand the exclusion of limits to the extent prohibited by applicable law.
8. Under the TOS, Owl will assess a late payment interest of 1.5% per month if the account is past due 30 days or more.
• County standard payment terms are Net 60 days with no interest or late payment penalties.
• Potential Impact: County standard processing time is 60 days or more. Failing to pay within 30 days from the payment due date may result in a material breach of the TOS, which could allow Owl to terminate the TOS and seek other legal remedies, including charging the County interest at a rate of 1.5% per month, which could exceed the TOS amount.
9. The venue under the TOS is in the applicable state or federal court located in the Commonwealth of Massachusetts. The EULA is silent on venue.
• County Policy 11-05 requires venue for disputes in Superior Court of California, County of San Bernardino, San Bernardino District.
• Potential Impact: Having a venue in the Commonwealth of Massachusetts may result in additional expenses that exceed the amount of the TOS or the EULA.
ITD recommends approval of the TOS and EULA with Owl Labs, including non-standard terms, to allow ITD to promote more productive and immersive video conference meetings.
PROCUREMENT
The TOS and EULA, including non-standard terms, will be used to accompany future purchases to be approved, as necessary, pursuant to County Policy 11-04, Procurement of Goods, Supplies, Equipment, and Services, provided that Owl Labs does not substantively modify the terms of the TOS and EULA.
The Meeting Owl 3 was selected as it offers unique features not fully encompassed by other competitors. With its 360-degree camera and ability to pick up subjects based on their voice and movements, the Meeting Owl 3 facilitates collaboration and participation. The Purchasing Department concurs with the non-competitive justification for the purchase of Meeting Owl 3.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Bonnie Uphold, Supervising Deputy County Counsel, 387-5455) on December 7, 2023; Purchasing (Ariel Gill, Supervising Buyer, 387-2070) on December 6, 2023; Risk Management (Gregory Ustaszewski, Staff Analyst , 386-9008) on December 7, 2023; Finance (Iliana Rodriguez, Administrative Analyst, 387-4205) on January 4, 2024; County Finance and Administration (Valerie Clay, Deputy Executive Officer, 387-5423) on January 5, 2024.