Publication
Generative AI: A global guide to key IP considerations
Artificial intelligence (AI) raises many intellectual property (IP) issues.
Canada | Publication | January 17, 2022
With the growth of the high-tech industry worldwide, it is no surprise that more and more transactions involve the transfer of rights to access or control data and derivative data. In our previous update we discussed protecting business data in a commercial context. In the M&A context, this valuable information is either the driving force of the deal or a significant area of risk requiring special consideration, from due diligence to the drafting of substantive provisions of a purchase agreement.
As data has become a larger component of transactions and business, regulators have imposed requirements to address privacy concerns and protect the ownership of personal data. Non-compliance with these restrictions can result in significant unexpected costs in a transaction. At the outset, it is important to get a sense of the following in relation to data and derivative data in a prospective deal:
The results of the due diligence process will inform the key representations and warranties of the deal. Many of the data-specific representations and warranties parallel aspects of due diligence. As such, consider including assurances as to the following:
Vendor counsel should look to include a disclaimer as to data being provided “as is” and/or “with all faults,” and seek to have the purchaser waive any implied warranty of merchantability, fitness, accuracy or completeness.
Data-specific provisions can and should extend to the indemnities section, where they can protect parties from some of the most dangerous and costly risks present in IP and/or data-centric transactions. Given the weight of this section, vendors and purchasers have important vested interests and should come to an agreement on the following suggested items:
As more and more corporations engage with big data and the internet of things, the relevance of data and its derivative sets continues to spread beyond the tech sector and into everything from consumer goods to personal services. With every new transaction we encounter more novel ways in which data is collected and sold. Accordingly, we expect these kinds of considerations to be relevant in not only data-specific transactions but a majority of commercial deals in the future.
Experience in drafting agreements and negotiating these terms can help you better manage these new, blended transactions.
The authors wish to thank Sol Kauffman, articling student, for his help in preparing this IP monitor.
Publication
Artificial intelligence (AI) raises many intellectual property (IP) issues.
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