Global M&A trends and risks
Powerful new forces shaping in the M&A landscape
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Global | Publication | April 2018
Agriculture has always embraced new technologies but the pace of change is now rapidly increasing as robots, drones, automation, artificial intelligence and digitization are increasingly taken up in agribusiness.
Not long ago, it would have been inconceivable that technology would permit the level of automation that is progressively being introduced in agricultural production and the degree of precision agriculture that this affords. Never have farmers had so much powerful information available to inform better decisions about their livelihood and the ability to bring such precise analysis to the business of agriculture.
Technological development is already beyond the initial stage of simply sending up a drone to take some aerial photography and moving toward far more sophisticated collection of data and analysis. Sensors attached to drones or robotic vehicles can be used for crop imagery, pinpointing irrigation leaks, identifying locations of pest infestation, taking soil surveys. Data is sent back to the farmer in real-time, with predictive analysis giving insight, whether in relation to potential crop yield or a problem in the making. This offers a perspective not previously available, possibly allowing access to remote and/or dangerous locations.
After predictive algorithms calculate just where to plant, robotics and autonomous vehicles will automate formerly manual processes – planting or sowing the seed and then later harvesting the crop. Automated irrigation delivers just the right amount of water in just the right places. Drones can apply pesticides, collect samples, and deliver tools and equipment. Driverless trucks might one day then transport the produce to market.
These technologies are being layered upon one another to create everincreasing efficiencies and competitive gains. However, it’s not only about the bottom line. New technology is making workplaces safer, with devices able to access otherwise inaccessible or dangerous areas, reduce workers’ fatigue, and help lower the risk of incidents.
This article discusses intellectual property issues arising in automation and “big data” from an Australian legal perspective, but its themes will be relevant to agribusiness in other jurisdictions too.
All this technology means that more than ever, farmers will now be in contact with intellectual property, whether their own or belonging to others. This is different to older technologies, when purchasing a pieceof equipment did not come with the regular firmware updates. Farmers now need to take on digital devices with more awareness of licensing limitations around permitted uses, and freedom to operate requirements. Can the technology be used without transgressing someone else’s intellectual property rights?
Patents protect inventions. Automating a formerly manual process may not however, meet the threshold requirement of being a “manner of manufacture”, or recognized patentable subject matter. In this regard, the Full Federal Court of Australia considered the question of patentability of automated processes in 2015. In Commissioner of Patents v RPL Central Pty Ltd1, the claimed invention was a computer used to assess the qualifications of applicants for a vocational training course. The Court distinguished between using a computer to merely carry out a scheme or plan in which the computer only acts as an intermediary (not patentable), and applying the use of the computer in a way that improves its functionality or solves a technical problem beyond the computer’s normal use (might be patentable). The Court held that:
“Putting a business method or scheme into a computer is not patentable unless there is an invention in the way in which the computer carries out the scheme or method.”
On the other hand, individual components of technology that have specialized functions are more likely to be patentable. The sensor on the drone and what it is capable of monitoring and recording is more likely to be the subject of someone’s intellectual property than automation itself. The firmware that drives this equipment is likely the subject of copyright. As with the introduction or development of any new technology, care should be taken to undertake corresponding “freedom to operate” checks to ensure that its use does not encroach upon third parties’ rights and any licensing requirements are satisfied.
The increased computerization of devices and systems even raises the prospect of whether owners of goods have the “right to repair” their own property without obtaining intellectual property licenses from manufacturers. This issue has largely emerged as a consumer issue in the automotive sector, but there is a prospect that it will expand to other industries as use of computerized devices expands.
All these devices generate a significant volume of data and information – which is exactly the point. The more information generated, the better, more varied and commercially insightful the predictive analysis.
Who “owns” all this data that will be generated? Is it the owner of the device the operator (if that person is not the owner) or the manufacturer which has programmed the device to collect and store the data?
As the analytics become more and more sophisticated, and the level of predictive analysis more specialized, it is increasingly likely that, compared to a farmer sending up a drone to take some aerial images, third party service providers will be engaged to operate the drone, collect data and provide analytics. This data can be aggregated, creating broader commercial value.
As third parties provide these services, the question of data ownership becomes more commercially important. Service providers want to commercialize their data. Farmers want access to information about their own property.
Therefore, the automation of such information gathering presents great commercial opportunities and potential value. However, there is presently a real risk that output such as images and data does not attract protection under Australian copyright law if there was no human input in its creation. This may affect the ability to protect or to commercialize that data and information.
While copyright protects compilations of data as a form of “literary work” and photographs as “artistic works” under the Australian Copyright Act, copyright does not subsist in “authorless works” that are created without the input of a human “author”. This situation may arise where a computerized device is autonomously capturing images or data without human input. This outcome is potentially different in some other common law jurisdictions, for example the United Kingdom, where the “author” of a computer generated work is the person “who made arrangements for the creation of the work”. (In cases where a human author has some involvement in the creation of the work, assessing whether copyright subsists will be a matter of assessing whether the degree of human involvement is enough to constitute authorship of the work.)
Additionally, a compilation of data or information must have been arranged with at least a basic level of skill and care in the selection and arrangement of the data. Therefore, without some degree of arrangement and selection of the data by a person, the collection of raw data is not likely to be the subject of copyright ownership.
The Copyright Act does not grant copyright ownership merely to the person (or corporation) whose camera was used, or who owned the vehicle with the camera on board. Therefore, works created automatically by a computer (in this case, a drone or robotic sensor) with no human input will not meet the test and will find themselves with no copyright owner.
Another form of copyright recognized by the Copyright Act is a “cinematograph film” (quite an antiquated term when applied to data streaming of visual images), which will subsist only after “the things necessary for the production of the first copy of the film has been undertaken”. This is inconsistent with a continuous live data stream, so therefore, there may not be ownership of copyright in the video being streamed.
Further, although often regarded in a proprietary sense, Australian law does not recognize data or information itself as a form of stand-alone property that can be owned, or bought and sold. Rather, any rights subsist in the ability to protect confidentiality over the information by enforcing its secrecy, whether by contractual relationships or general obligations that arise in equity. Still applicable to data today, as long ago as 19432, in a case about whether the acquisition of information about aircraft designs was taxable property, the Australian High Court said:
“Knowledge is valuable, but knowledge is neither real nor personal property. A man with a richly stored mind is not for that reason a man of property.”
Each case is to be assessed its own circumstances, but if the person collecting the data guards its security and prevents it reaching the public domain, it may have the necessary quality of confidence to qualify as confidential information. That might shut out farmers from “owning” data about their own properties, if that data has been collected by a third party.
In light of the above, the advent of “big data” has brought some significant challenges to the way intellectual property law conceives and deals with data. With automation, “big data” is less of a purely intellectual property issue about “ownership”, and more of an issue about granting access to data and records held by someone else.
In the consumer world, there have been calls by individuals for rights to access “their own” information, and legislated Data Access Rights are being contemplated or introduced. However, if limited to individual consumers, this still leaves farmers or agribusinesses locked out from access to data about their land, their crops or their produce, where that data is collected and stored by a third party. This can be resolved by contracting with service providers, although if data is in the public domain or not the subject of copyright, there 2 Federal Commission of Taxation v United Aircraft Corporation (1943) 68 CLR 525 at 534, per Latham CJ may not be any legally recognized subject matter to sell.
To the extent that copyright does subsist in any content captured using autonomous technology, consideration needs to be given to ownership of the copyright. As noted above, it is increasingly common for third party service providers to operate drones and other vehicles on behalf of a principal. In such circumstances, unless the service agreement provides otherwise, the default legal position in Australia is that copyright is not owned by the person commissioning the service provider, but rather remains owned by the creator of the work. This is commonly overlooked and misunderstood, and can lead to disputes about who owns – and therefore has the right to control or commercialize – said work.
Automation technologies and big data bring new challenges under intellectual property law, particularly concerning the ownership of content created by automated processes. However together with bringing precise analysis and control of their crops, and therefore competitive edges and greater efficiencies, agribusinesses will find that there are distinct advantages in also understanding the intellectual property that they use.
Nina Varumo is a freelance portrait and documentary photographer based in Stockholm. A recent project of hers Kvinnor till sjöss (‘Women at sea’) is on ongoing photo series highlighting the working life of female seafarers in order to change the stereotypical image of what and who is a seafarer.
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