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Take Steps to Protect your Business Data Using Data Protection Clauses in Contracts

  • Time:Tuesday, 28 April 2015 16:32
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In the United States, regulation of data is hodgepodge at best.  There is not yet comprehensive federal or state legislation covering the production, use or protection of data.  While there are laws concerning specific types of information (e.g., HIPAA), and emerging policy statements or “best practices” being adopted by trade or industry groups or, in some cases by government agencies, most of these programs are aimed at protecting personal information of customers or users. 

There is another business purpose though that to date has been largely ignored - the potentially significant value in the non-personal data being produced.

Examples are numerous: data regarding the operation of automotive engines and transmissions can be used to help increase efficiencies; data surrounding traffic control in major cities can be used to smooth traffic flow resulting in significant time and fuel savings; data regarding electricity and water usage can be used to increase efficiency of delivery.  And because the economies of many of these are scalable, the benefits and profits from them could be enormous.

Every company and business that in any way produces or uses non-personal data in its operations should take steps to protect it.  Now is the time.  At this stage, it is not difficult. 

-                    Add provisions to your agreements entitling you to collect this data and specifying who owns any data being produced or used. 

 

-                    Make sure your data will not be treated as “personal” (i.e., potentially subject to regulation) in the jurisdictions where you do business.

                                              

-                    If the other contract party (or a third party) needs to use the data, make sure the agreement specifies what kind of license is being given to that party:  exclusive, non-exclusive, limited purpose or use, limited in geographic area or time; royalty-free or otherwise.

 

-                    Data should be defined in your agreements to include not only the raw data being created or used but also all analyses, models, extrapolations or algorithms created from the data.

 

-                    Understand the implications of deviating from any policy statements adopted by those in your industry.

 

-                    Make sure you have your sales contracts and other relevant documents reviewed by an attorney as the law around data collection evolves.

You may be creating something that will have enormous application in the future – be sure you own it and control it.

Contact us to discuss how we can assist you in protecting this important asset. 

Last modified on Time: Thursday, 09 June 2016 17:15