How intellectual is your property?

Increasingly there is a recognition of the potential commercial value in the data that is being collected by smart buildings. But what are the intellectual property (IP) issues  and how should they be addressed by the real estate industry? What’s the issue? Buildings are becoming “smarter”. Developers, landlords and tenants are now able and willing to install a spectrum of sensors, which can range from CCTV to air quality monitors to heat sensors (to track human movements around an office), to logging ID card interactions, right down to tracking how individual employees take their coffee. Whatever the sensor is for, the centralising theme is that they collect a substantial amount of data. Landlords in smart buildings are now increasingly interested in commercialising and extracting value from this data. Whereas tenants, for example, may be interested in obtaining the data to identify patterns, maximise office efficiencies and improve the user experience of the building for their employees. Who owns it? The starting point is that it is unlikely there will be any intellectual property rights in the data itself. Despite generic references in business and conversation to “ownership of data”, information itself technically is not property, and so it is not owned by anyone until it is processed or used to create something. At that point, certain IP rights may arise. Who is analysing, collecting and processing the data? Copyright is an unregistered IP right that subsists in a work on its creation. Generally, the author of the work will be the first owner of any copyright in that work. Therefore, whoever uses the building data to create something will own the copyright in that work. It is important to consider employment relationships: copyright created by employees in the course of their employment will belong to the employer. Therefore, if a landlord is, for example, employing in-house data processors to analyse the data, it must ensure that there are employment agreements in place with those data processors to ensure that the IP rights belong to the landlord. However, if the landlord is employing external data processors or service providers, any copyright generated will initially belong to those third parties. Thus it should be clearly agreed in the contract at the start of the relationship that any IP rights created under the contract are assigned to the landlord at the point of their creation with full title guarantee. If there is no human author processing the data, copyright can still arise in computer generated works. In these scenarios the author is deemed, under the Copyright, Designs and Patents Act 1988 (the 1988 Act), to be “the person by whom the arrangements necessary for the creation of the work are undertaken”. Therefore, if the landlord is using software to analyse data, it will own the IP rights contained in the output. However, if this software is operated by an external service provider, the landlord should consider the contractual provisions at the start of the relationship with regard to assignment of rights generated under the contract, to ensure they retain ownership of the IP. How is the data stored? As the name suggests, probably in a database. If this is the case, “database rights” may arise. Database rights are a discrete IP right, in addition to any copyright that may subsist in the typographical arrangement of a database. As with copyright, the person who makes the database will own the database right. However, where a database is commissioned, the commissioner will own the database right. In accordance with the 1988 Act, if the landlord commissions a third party to create a database, it is likely that the landlord will own the database right automatically. Additionally, copyright will subsist in the typographical arrangement of the database as a literary work if it is original, ie “by reason of the selection or arrangement of the contents of the database, the database constitutes the author’s own intellectual creation”. As per the usual rules of ownership of copyright, the author of the database (or their employer) will be the first owner of the right. Is there any intellectual property in how the data is collected? Collection of the data may be achieved using a patented or otherwise protected confidential process, or the landlord itself may develop a system for collecting and analysing data that may be protected under a process patent, or as confidential information. If this process is controlled or provided by a third party, the assignment of the IP rights created under the terms of licence or commercial agreement should be agreed at the start of the relationship (as discussed above). Going further, copyright will subsist in any written manuals that are created, for example, describing how data can be collected and processed. What other types of data may be collected by smart building technology? Depending on the extent and types of monitoring and data that is collected at the property, it may be worth noting that copyright also arises from sound recordings. Additionally, there may be image and/or moral rights to consider in CCTV surveillance data obtained, alongside the obvious privacy issues at stake. Establish ownership from the start Assuming the landlord is interested in commercialising the data that it collects, there are some unavoidable first ownership and assignment of rights issues that will need to be addressed. Ultimately, the ownership of the data will be governed by the commercial discussion and agreement that is reached between the landlord and the tenant. The landlord will need the cooperation of the tenants’ employees. The collection and analysis of the data could be beneficial to both landlord and tenant, and therefore the ownership and responsibilities of each party should be agreed at the time the lease is negotiated in order to optimise the potential of innovatively sourced data that is collected. Ralph Giles is an associate in commercial IP and Ewan Viney is an associate in commercial real estate at Bristows Pic credit: Christian Ohde/imageBROKER/REX/Shutterstock