Exploratory legal research into data sharing and the promotion of confidential data sharing

Motivation

The motivation for this document is the development towards (open) networked (innovation) ecosystems where several (legal) parties cooperate more closely with each other and (have to) start to share more and more (measurement) data with each other. To that end, cooperation agreements are drafted, which contain the agreements between the parties, references to standards and sometimes national and international laws and regulations. In the course of time, forms of cooperation with relevant agreements have been developed for innovation projects  in which intellectual property rights resulting from innovative or creative activities play a role. The basis for the cooperation is laid down in the clauses of the cooperation agreements. That also applies to the exchange and sharing of all sorts of data, even though the development of cooperation models and templates for contracts are less common yet.

Aim of this document

In this document, the writers try to take the first steps for several forms of cooperation in order to come to a set of standard clauses that can be incorporated in cooperation agreements.

A specific item to be addressed is the relation between small players and larger entities. The purpose is to use collective knowledge in order to make a leap forward. However, this must not go at the expense of small parties that are not capable of securing their interests by means of a correct and balanced legal construction. There are networks in which many small parties participate that cannot assess complex legal arrangements. Just like consumers enjoy some level of protection after they have clicked ‘I agree’ without having read the numerous pages of conditions in English, a Dare-2-Share arrangement must offer small parties some security that they do not forfeit all their rights. (Which is the reason that this document is not drafted in English). Furthermore, no disproportionate amount of time will be lost setting out the starting points of the cooperation. This item requires that in the formulation of the legal preconditions and standard clauses, one has to aim at simplicity.

This does not change the fact, however, that small SME’s or other small organisations bear a measure of responsibility for seeking expert advice on their position in connection with a form of cooperation and the sharing of intellectual property and/or data. To that end, the access to low-threshold legal assistance for small players must be promoted.

It must be investigated if it is possible to set up a Legal Services Counter on the Smart Industry website, for instance, where market parties may turn to with their questions regarding the set-up of their cooperation and the legal preconditions, including the cooperation agreement or, in the event of several parties, the consortium agreement. In a large number of cases, this could be done through the membership of a trade association, such as FME, KMU or NL ICT.

Value

Data often have more value when shared. Moreover, the data shared can be enriched by others and thereupon be shared again with the original parties. But under what conditions are data shared and how can the (sometimes many) owners of the data share their value and how do you agree on this properly beforehand?  Usually, the value of the data (and intellectual property) that the parties wish to share is not clear.

Value is in essence a subjective concept anyhow.

The ultimate goal is to bring about more benefits for all parties through cooperation. The aim is to come to a model agreement or set of model agreements that looks after the interests of the different stakeholders. To avoid lengthy discussions on the contents once the model agreements have been prepared, a broad level of support must be sought.  This means that the interests of small and large parties must be taken into account. Furthermore, both the profit and non-profit sector must be involved. The starting point is that a standard contract must be drafted that is also viewed as a standard contract in the market. This requires the involvement and contribution of a broad group.

Stakeholders

The following parties will be invited to comment on the standard contracts:

(think of the players that have to be involved: technical universities, large corporates with extensive research & development activities? AkzoNobel, Shell, ECT, GE, ABB, Siemens, Phillips, Thales, and the smaller parties as well of course, for instance networks of niche companies, software IT, etc.).

  • TNO
  • Thales
  • NL ICT
  • FME
  • Siemens
  • Fieldlab Campione
  • Fieldlab Smart Dairy Farming
  • MKB NL
  • ECP
  • Louwers Advocaten

Definitions

Personal data: data that can be traced back to natural persons. Strict statutory requirements apply to these data, such as restrictions on the sharing of these data with others, protection so that not everybody has access to these data, permission of the person in question, etc. (in the Netherlands, in particular laid down in the Personal Data Protection Act).

Intellectual property right (in a narrow sense): patent rights, plant variety rights, copyrights, trademark rights, rights to drawings and designs and/or any other (intellectual property) rights, including sui generis rights to databases and topographies of semiconductor products.

Data: data such as statistical data, measurement data or other factual information that in itself are not subject to intellectual property rights. (Data acquired without specific creative efforts).

Database: a collection of data, whether protected by Intellectual Property Rights or not, such as in particular database rights (and any copyrights with regard to the ranking and other creative choices.

Algorithm: a calculation procedure (in software or otherwise) or model that generates “valuable” information based on research parameters and a (large) quantity of measurement data.

Legal comments

With regard to a registered intellectual property right, such as a patent right, plant variety right or a right to drawings or designs, in principle it is clear who is the owner of the thing protected by such rights. With regard to a product protected by a non-registered right such as a copyright, database right, topography of chips or unregistered design, this is less clear. Furthermore, there can be several parties entitled to one thing and/or parts thereof protected by the Intellectual Property Right in question.

Personal data and data collection
With regard to personal data, a distinction must be made between the property of such data or data collections on the one hand and the rights arising from the laws and regulations on the protection of personal data (privacy) on the other hand. For instance, a company may have a data collection at its actual disposal without this affecting the rights of individuals (for instance the right of inspection and correction). In other words, the rules regarding the protection of personal data are not related in any way to the legal title to such data or collections thereof.

Data and data collection
With regard to data and data collections, a distinction must also be made between the (legal) person who actually has the data and/or data collection at his/her/its disposal. Because this (legal) person actually has the data and the collection at its disposal, he/she/it can dispose of them and decide whether to keep them to himself/herself/itself or to share them, with whom to share them and on what conditions. Actually, this would be confidential information.

If the collection complies with the requirements set in the Database Act, such as systematic order and accessibility and moreover,  a substantial investment has been made in the database in terms of time, energy or money, the risk bearer in principle is the person entitled to the database.

Disposition and right
The actual possessor(s) of the data and/or the person(s) entitled can agree that someone may use certain data for certain purposes. The possessor/person entitled continues to be the possessor/person entitled until he/she/it agrees to transfer the right or actual data to someone else.

Operating principles

Algorithms
Now that electronics are getting cheaper and cheaper, more and more measurement data are available. This offers the possibility of retrieving more information from that data, especially if these data are shared in a networked ecosystem. The latter can be done with algorithms that may be subject, on certain conditions, to patent rights and in principle also copyright, provided that original, creative choices have been made. The development of these algorithms first requires a large quantity of data. However, there are no proper agreements on measurement data. Attention must be given to this in a cooperation agreement.

Sharing
Measurement data can be kept secret from others than the legal person that collected the data. Measurement data  can also be shared in a cooperative project between the partners in such a project. Finally, measurement data can be offered as open data, be shared and enriched by others and thereupon be shared again.

Data records
Measurement data consist of data records (information technology) that contain several attributes. The structure of the data record is recorded in the data record type and that type definition also includes the structure of the attributes. When making data available to others (shared and open), we expect one of the attributes to contain the name of the original owner (traceability). When made available to others, attributes such as the source references can be removed. In a cooperation agreement or a further elaboration of that in operational contracts, agreements must be made and laid down on this (type record, attributes such as source references and the like).

Confidential sharing: how is it done?
Naturally, data can be made directly available to the parties involved, for instance through pools or a so-called trusted third party or (virtual) data rooms. In this case, again agreements must be made on the data structure, quantity, and who will be able to use certain data and on what conditions. The trusted third party is the party that implements and guarantees these agreements.

Furthermore, in some cases Open Data initiatives may be considered, in which data can be shared (similar to Open Source and Creative Commons). This often involves making available information of a more public nature. Nevertheless, within the Open Data, Open Source and Creative Commons communities, certain licence models have been elaborated that in certain cases may serve as best practices for the sharing of data.

Examples

An owner leases his installation to a user. The installation has been made by a manufacturer and contains parts from a supplier of that manufacturer. (For instance a ship/airplane/process installation/milking robot/spray robot, etc. with an engine of a supplier). The user takes a reading of a meter (measurement value). As a result, he disposes of measurement data. But the owner wants to know the intensity of use of the installation and also needs those data. The manufacturer sees to the maintenance of the installation and also wants those measurement data and finally, so many electronics are incorporated in the part of a supplier, that certain data go directly to the supplier through the webserver.

The starting point is that the measurement data are of the user. Legally, however, you cannot speak in terms of ownership of data, but you can determine the access and user rights that everybody has. The owner referred to in the example would be well-advised to lay down in the lease contract what measurement data he wishes to see or wants to have access to. And that lease contract also includes the agreements on the exchange of the measurement data for maintenance. If the manufacturer has a part to which this also applies, the sensible thing would be to record all that as well in the sale and lease contract, thus  giving notice of this (data type, frequency and through what mechanism). In this process, it is also recorded what data can be used by whom and on what conditions. This can get more and more complicated as time goes by, while everybody wants to save costs and/or extract extra value from the data for their own or other purposes.

Dare-2-Share

Dare-2-Share is an approach to come to agreements on the sharing of data and on possible future developments. This may concern open data, but also closed ‘proprietary’ data shared with a limited group.

This is different than in the case of IPR. If an invention or design has been laid down, any further use is also laid down in accordance with a pattern that by now is known beforehand. When data are shared, the value may develop over time in a more dynamic and less predictable manner.

In a network of several players, it may be agreed that measurement data or parts thereof are shared. The ‘(virtual) data room’ or ‘trusted third parties’ referred to above may be a solution for the storage and access to the data. The development of ‘data pools’ is also conceivable, as already happens with patents, for instance.

Legal preconditions
Beforehand, agreements must have been set out in case a player develops new algorithms with these data, thanks to those common data. It seems obvious that in principle, that player is or becomes the party entitled to the algorithm itself (but not necessarily to the data).

If no agreements have been made, each player with access to the data may do this and will be free to use the algorithm. A simple agreement could be that the other partners can also use the algorithm.

A Dare-2-Share agreement could be that partners (the actual owners of the measurement data) have a party (for instance an external party or a new joint entity to be incorporated, for instance a foundation or a private limited company) develop an algorithm at their joint expense, in proportion to their contribution to the data collection, thus creating value for which a user fee must be paid frequently to the contributing parties, just like with a licence contract.

The development of the algorithm is creative work that requires more knowledge than just collecting measurement data. Such a party could develop several algorithms. By means of this construction, the original owner of the measurement data can be paid if the data (in time) generate value.

Trusted information manager or broker
To make this possible (in a simpler way), the parties may agree in their cooperation agreement on the incorporation of a Dare-2-Share legal entity that manages the relevant measurement data of the participants and organises, for instance, a mechanism for local or central storage as information brokers and/or ‘trusted third parties’. In doing so, use is made of the principle that measurement data do not have an obvious owner. In the conditions of this legal entity, it will also be set out how decisions will be adopted regarding any further availability of the data and conditions for making them available as well as the protection of the data. In the cooperation agreement or in the elaboration of the internal rules of this entity, further agreements on trustworthiness, manner of data supply and quality, standards, etc. will be set out. It must be made sure that no power blocks are formed that could lead to the exclusion of others and are contrary to competition law.

Download Dare2Share agreement 2017 English version