Martin Edwards, vice president of Taft’s Public Affairs Strategies Group in Taft’s Washington, D.C. office, contributed to this post.

Early on July 1, the U.S. Senate voted to halt an effort to impose a 10-year moratorium on state regulation of artificial intelligence. The vote, 99-1, removed the AI provision from President Trump’s “Big, Beautiful Bill” that had evolved from a full moratorium on state AI regulation for the next decade, to its most recent iteration that required states to adopt the ban in order to receive federal broadband funding over the next five years.

Yesterday, Sen. Marsha Blackburn of Tennessee and Sen. Ted Cruz of Texas attempted to revise the AI ban to address current regulations. According to media reporting, efforts toward banning state AI regulation broke down amidst concerns that the language was overly broad and could adversely impact existing laws concerning privacy, consumer protection, and child safety.

In the last year, states have taken the lead in AI regulatory efforts as the federal government steers toward deregulation. Several state legislatures are currently debating bills to regulate AI developers, distributors, and deployers. The most prominent AI laws on the books include the California AI Transparency Act, Colorado AI Act, Tennessee’s Ensuring Likeness, Voice, and Image Security (ELVIS) Act, the Utah Artificial Intelligence Policy Act, and the Texas Responsible AI Governance Act (TRAIGA), which was signed into law last week. In addition, several of the 19 state consumer privacy laws currently in effect, or soon-to-be in effect, contain restrictions on algorithmic decision making.

The AI ban could potentially be resurrected in the U.S. House of Representatives as budget reconciliation efforts continue. However, given the decisive vote to remove the AI ban, we expect future deregulatory efforts would more likely manifest in a standalone federal preemption bill. Based on what we have learned from the most recent Senate negotiations, we expect any such effort would require sufficient federal protections as part of any compromise on state law preemption.

In the meantime, despite potential federal constraints, states will remain active players in AI regulation. As we have seen in California, Colorado, Tennessee, Texas, and Utah (and several states debating similar legislation), AI regulation is largely focused on emerging consumer protection needs and a demand for transparency and accountability in high-risk processing fields like employment, finance, health care, and education. Organizations can prepare now by adopting and improving AI governance, documenting risk assessment findings for AI tools in development or use, and working with legal counsel to evaluate how existing laws may impact AI activities.

This update is part of Taft’s White House Toolkit. Please reference the toolkit for additional cross-practice coverage of federal legislative and regulatory activity that may affect businesses or organizations.

Taft partner Marcus Harris was quoted in the TechTarget article, “SAP agrees to allow Celonis data access until case resolved,” published on June 26. In the piece, Harris provided insight into the ongoing legal dispute between SAP and Celonis, addressing the implications of SAP’s agreement to permit continued data access while litigation is pending.

Read the article here.

Harris, who is based in Taft’s Chicago office, discussed how the interim arrangement could impact both parties and set precedents for future data access negotiations in the enterprise software industry. The article highlights Harris’s experience representing clients in complex software-related disputes and his perspective on best practices for managing contractual relationships in rapidly evolving technological landscapes.

In this video, I discuss two recent ERP lawsuits involving SAP and Oracle.

  • In March 2025, Celonis sued SAP in the United States District Court for the Northern District of California, alleging in a 61-page complaint that SAP excludes process mining competitors and other third-party providers from its ecosystem.
  • According to Celonis, SAP makes it virtually impossible for its customers to work with non-SAP process mining solutions because sharing data from the SAP system with third-party solutions is subject to excessive fees.

SAP’s strategy seems to be clear: charge its customers excessive fees to access their own data.

  • This has significant implications for any company that uses third-party AI functionality with data in its SAP ERP system.

Oracle faces another ERP fraud lawsuit.

  • Earlier this year, Veronica’s Auto Insurance Services, Inc., filed suit against Oracle/Netsuite alleging fraudulent inducement, negligent misrepresentation, and breach of contract.

Does all of this sound familiar?

#erplawyer #erpcommunity #erpfailure #saps4hana #oraclecontracts #softwarelawyer #sapservices #saphanacloudplatform #saas #erpcloud #teamtaft #sapcontracts #oraclelawsuit #oraclefailure #oracletermination #saptermination

If you’re using AI in your business strategy, are you protected when things go wrong? Most companies assume their insurance covers AI-related damages, but that’s not always the case. From biased algorithms to copyright violations, your business could be exposed to liability.

In this video, I’ll break down strategies to avoid many legal risks of using AI in marketing, operations, and decision-making. Whether you’ve already launched an AI tool or you’re still evaluating the offerings, this video will help you understand how to make your insurance policy work for you.

#industriallawyer #insurancelawyer #commericallitigation #privacylaw #datasecuritylaw #whitecollardefense #defenselaw #classactionlawsuits #ailawsuits #aicompliance #aiethics

Vendors often minimize an ERP implementation’s complexity, cost, and length.

  • Their goal is to sell software, not set a customer’s expectations.
  • But are they contributing to ERP failure? Is the customer to blame for believing them?

Understanding your business requirements and how you want your ERP software to address those requirements is critical to success.

  • Without understanding your present state, your future state and the requirements that are critical to getting there, you won’t have the ability to properly address functionality gaps in the software.
  • One common theme in the lawsuits we litigate is a failure to devote adequate resources to the project.

This cuts both ways. The customer doesn’t understand the types of resources it will need to devote to the project to make it successful and the vendor will fail to utilize the team it promised.

  • It will dedicate its resources to other high-value projects and provide you with the D team.
  • It will use your project as a training ground for inexperienced consultants.
  • It will offshore resources.

Unfortunately, this is sometimes because the vendor will create unrealistic expectations. Vendors will often misrepresent the complexity and cost of a Project.

#erplawyer #erpcommunity #erpfailure #saps4hana #oraclecontracts #softwarelawyer #sapservices #saphanacloudplatform #saas #erpcloud #teamtaft #sapcontracts #oraclelawsuit #oraclefailure #oracletermination #saptermination

Could your cyber insurance claim be denied because of an AI mistake on your application?

  • In this video, I’ll uncover a recent trend: insurers rescinding cyber insurance policies after businesses file claims, often pointing to AI-generated or human errors in the original applications.
  • Watch now to learn how to protect your business, avoid policy rescission, and ensure your insurance coverage stands when you need it most.

Taft Partner Marcus Harris will moderate the panel “Safeguarding and Upholding Intellectual Property in Emerging Digital Landscapes” at ITechLaw’s 2025 World Technology Law Conference in San Diego. The panel is scheduled for May 15 at 1:10 p.m. PDT and will bring together legal professionals to discuss the evolving challenges of protecting intellectual property (IP) as digital technologies, including artificial intelligence, rapidly transform business and regulatory environments.

The ITechLaw World Technology Law Conference, taking place May 14–16, convenes leading practitioners, in-house counsel, and academics from around the world to explore global legal frameworks and trends in technology law. This year’s agenda highlights topics such as AI, cybersecurity, data protection, and IP law, providing insight into the legal issues shaping the digital economy.

Harris focuses his practice on technology and software law, including drafting and negotiating enterprise software licenses, SaaS agreements, and handling disputes related to failed software implementations. He regularly advises clients on IP strategy, data privacy, and the legal aspects of technology procurement. Before joining Taft, Marcus served as in-house counsel at major software companies, where he managed intellectual property portfolios and oversaw complex litigation. His experience includes representing clients in high-profile disputes with software vendors and advising on regulatory compliance and risk management in digital transformation initiatives.

Harris’s participation as moderator reflects Taft’s ongoing commitment to thought leadership in technology law and to supporting clients navigating the complexities of intellectual property protection in a rapidly changing digital landscape.

Make no mistake. If you are about to start a digital transformation, the cards are stacked against you.

  • As an ERP customer, you are at an incredible disadvantage when trying to successfully implement ERP software.

To some extent, that is by design.

  • ERP vendors and integrators act in their self-interest to maximize revenue.
  • They minimize the complexity of the implementation process, which can result in unreasonable expectations.

ERP software consultants and salespeople act in their own self-interest.

  • An entire ecosystem is built up around each of the major ERP providers.
  • Often, partner networks, self-dealing, and commissions drive recommendations more than objectivity.
  • Large consulting firms have entire practice areas devoted to implementing Oracle, SAP, or Infor.

This sets up unreasonable expectations and prevents you from devoting the appropriate resources to your ERP software project.

  • Unreasonable expectations cause ERP software project failure.

I discuss these issues in my latest video.

#erplawyer #erpcommunity #erpfailure #saps4hana #oraclecontracts #softwarelawyer #sapservices #saphanacloudplatform #saas #erpcloud #teamtaft #sapcontracts #oraclelawsuit #oraclefailure #oracletermination #saptermination

Software demonstrations are a key part of the sales cycle and your evaluation of competing software products.

  • Software vendors will wow you with features and functionality.
  • You need to step back and ensure you have an objective system to evaluate the software and functionality across competing product demonstrations.

Vendors will sometimes show specific demonstration software that has little resemblance to the software you will implement.

  • You need to question everything you see and ensure that what you are shown is real and represents the product you are going to buy.
  • How do you get the most out of software demonstrations, and how do you overcome the fundamental flaws of software demos?

I discuss these issues in my latest video.

#erplawyer #erpcommunity #erpfailure #saps4hana #oraclecontracts #softwarelawyer #sapservices #saphanacloudplatform #saas #erpcloud #teamtaft #sapcontracts #oraclelawsuit #oraclefailure #oracletermination #saptermination

Adopting technology for the sake of adopting technology rarely makes sense. This is true for Artificial Intelligence.

  • AI is the shiny new object right now.
  • ERP software vendors are rushing to incorporate AI functionality into their products.

To utilize AI, you must have a well-thought-out strategy for selecting, implementing, and using AI.

  • You need to ensure you have a business case for AI.
  • You must ensure you understand the risks and how to mitigate those risks.

If you don’t understand your business processes and how to utilize artificial intelligence functionality, you can’t have a strategy for using AI.

  • This makes it challenging to understand your risks and how to mitigate them.

I discuss these issues in this clip from my latest video.