Amazon makes cloud contract more customer-friendly as rivals loom

SAN FRANCISCO (Reuters) - Amazon.com Inc (AMZN.O) has done away with a controversial clause in its cloud computing contracts that prohibited customers from suing the company over patent infringement, according to an updated version of the Amazon Web Services customer agreement released on Thursday.

The so-called “non-assert” clause had been a point of friction for years for numerous companies that were interested in using Amazon Web Services but were reluctant to trust Amazon with their intellectual property.

Amazon Web Services, a cloud computing pioneer, now provides computing and data storage services for a wide variety of customers. It faces growing competition from others including Alphabet Inc's (GOOGL.O) Google and Microsoft Corp (MSFT.O).

The decision to remove the clause makes Amazon “appear more user friendly, and it smoothes over a major objection point corporate counsel have been raising,” said Phil Davis, CEO of PhilStockWorld.com, an investment advisory service.

Amazon has also introduced a new policy that will protect customers if they are sued for patent infringement over services that run on Amazon Web Services. Microsoft has offered a policy with similar protections since February.

Calvin French-Owen, co-founder and CTO of Segment, a customer data management startup in San Francisco that has been an Amazon Web Services customer since May 2011, praised the moves.

“It’s cool that they are willing to defend companies on their platform against patent trolls,” he said.