Building a Data Economy: With new rights might come a new obligation to license - Lexology

"At the moment, the Commission believes that companies creating large datasets typically hold on to it for their own purposes, which, in the Commission’s words, 'potentially restrict[s] reuse [of the data] in downstream markets'.

The Commission sets out a number of possible solutions to address this problem and to encourage (or even force) companies to grant others access to their data.

Some of the most striking possibilities set out by the Commission are:

• Creating a new ‘Data Producer’s Right’: Databases containing machine-generated data are typically not protected by either copyright (because they are not deemed to be the result of intellectual effort and/or have any degree of originality), or the sui generis right provided by the Database Directive (because the database will often lack the requisite level of investment in obtaining, verifying or presenting a database’s contents). The Commission does not provide much detail as to the precise scope of the new ‘Data Producer’s Right’, or the circumstances in which it would arise. It is hoped that further details will emerge during the course of 2017; the Commission has announced that it intends to conduct an evaluation of the Database Directive this year, which would provide an opportune moment for the EU to both amend the existing framework and set out the scope of any new data rights.
• Compulsory licensing: The Commission also suggests two mechanisms by which the owners of databases could be required to grant others access to them:
  • When it is in the public interest: The Commission suggests that public authorities could be granted access to third parties’ data sets where it would be in the “general interest” and would considerably improve the functioning of the public sector. One can envisage, for example, local authorities being granted the right to access real-time traffic data which is collected from private vehicles, in order to improve traffic management or perhaps even monitor and try to control air pollution.
  • On FRAND terms: The Commission also raises the possibility of establishing a framework in which companies are obliged to license the data they hold which is generated by their machines or devices on 'fair, reasonable and non-discriminatory' (FRAND) terms. To date, the EU has only mandated the compulsory licensing of IP rights on FRAND terms in exceptional circumstances, such as where the owner of a patent has a dominant position and there are no alternatives to using the patented technology. Expanding compulsory licensing to large datasets is therefore a significant potential development.
• Model contract terms: The Commission has suggested that, with the input of stakeholders, model contract terms are drafted to create balanced terms for small business. It is likely that these would reduce transaction costs and safeguard contractual freedom, and may also provide weaker parties with a fairer opportunity to exploit data."