Skip to main content

Basic principles for contracts relating to data

Jul 6, 2020

Table of contents
    Kaisa Fahllund

    I’m in charge of the Contracts Team at Berggren. My mission is to draft contracts that are so good that they leave no room for disputes and, if a dispute should arise, the contract will provide effective tools for resolving the dispute in our client’s favor.

    As the saying goes, knowledge is power.  Knowledge together with data also has significant financial value and this value is growing continually.  As collectors of enormous amounts of data, American giants such as Google and Facebook wield significant financial power.  Likewise, valuable data is continuously exchanged and utilized pursuant to contracts between Finnish companies.

    Research and development (“R&D”) projects and other collaborative relationships frequently involve the disclosure of data to partners.  Artificial intelligence applications, for example, are often taught by using massive amounts of data, often acquired from a contractual partner or perhaps a customer who wants to have access to a new application or service that is being developed.  

    When data is disclosed to another party and, conversely, when the rights to data are acquired, the old rule of thumb concerning licensing applies: acquire broadly and disclose narrowly.  When contracts are signed on the use of data, the party that discloses the data and the party that gains access to the data have partially opposing interests which must be considered when agreeing on the scope of disclosure of data and the right to access data.

    When You Want Data:  Acquire Broadly

    Companies that use data and acquire the right to data should strive to sign contracts that give them sufficient access rights to cover their current and future needs.  In an R&D project, for instance, a company needs to acquire the right to access data not only for the duration of the research project and for all of the project participants who use the data, but also for commercial use after the research project has been completed.  If a company that uses data subsequently needs to disclose the data to other parties, this right must be specifically mentioned in the terms of the agreement.

    Companies that acquire data also must understand (1) what the data in question consists of (2) its source and (3) whether it includes personal data, for example.  Companies acquiring data also should strive to ensure that the party that discloses the data actually has the right to disclose the data in question and that the disclosing party bears contractual liability for the data and their right to disclose it.

    When You Grant Rights To Data:  Disclose Narrowly

    It may be in the interests of parties that disclose data to optimize the use of the data they own.  For example, instead of granting exclusive rights to the data to any party, they might retain the ability to license data to several parties.  It is also often in the interests of the party that discloses data to set restrictions on the use of data; for example, restricting the use of data for research purposes, prohibiting the subsequent disclosure of the data and/or prohibiting the modification or enrichment of the data.

    The disclosing party also often has a justified need to protect personal data or trade secrets contained in the data to be disclosed, which is why the contract may include provisions concerning non-disclosure or anonymization of the data.

    For More Information

    We will take a deeper dive into the different forms of legal protection of data and contracts pertaining to data in Berggren Legal’s Breakfast Seminar on September 17, 2020.  We hope that, by then, it will be possible to host the seminar at our office in the usual manner. This breakfast seminar will be held in Finnish

    We will schedule an English-language event shortly thereafter.  Please visit Berggren´s website for information on the exact date and time of the English-language presentation.

    Stay up to date with IP news

    Subscribe to our newsletter to get latest articles.