Commercialization and Protection of Earth Observation Sector

Commercialization and Protection of Earth Observation (EO) Sector Presented by: John Hull Date: November 08, 2021 Meaning of Commercialization - COMMERCIALISATION: "...to derive commercial profit from..' - EXPLOITATION: "...to derive commercial profit from...to engage in commerce..." STEP 1: The Process of Commercializing EO Data The process has the following stages: 1. Accessing "raw" EO data 2. Understanding (and paying for) the right to use and/or process EO data 3. Creating a new "Derivative" - process or service based on EO data 4. Working out what IPR protects the Derivative product/service 5. Using the best method to commercialize the Derivative Accessing EO Data Sources Of EO Data - The Copernicus (previously Sentinel) Programs - Copernicus Data from ESA satellites, from commercial satellites and from ground data sources; - Definition:  "Sentinel Data" = "..all data and products generated on the basis of observations acquired by sensors flown in Sentinel missions...in the frame of the Copernicus Space Programs." - And Why Provide Access To EO Data?  "...to provide accurate and reliable information in the field of environment and security...[and]...contribute to reaching the objective of the Europe 2020 Strategy, in particular by developing an effective space policy to ...address some of the key global challenges and meet the targets on climate change and energy sustainability.." - [Reg (EU) 337/2014 at Recitals [7] and [10]] Making Copernicus Data Available to Users - Copernicus Data is divided into: 1. Copernicus Data = dedicated mission data, contributing mission data and in situ data; 2. Copernicus Information = "...information following processing or modelling of Copernicus data" [Reg 377/2014 At Art (7) and (8)] - It is available from: 1. Cloud-based data storage and processing sites; 2. Primarily Copernicus Data and Information Access ("DIAS") and others including ESA 3. Copernicus Space Component Data Access System; Copernicus Open Access Hub and related ESA Thematic Exploration Platforms ("TEPs"); 4. National (EU State) platforms; 5. Commercial operators - Google, Amazon and others STEP 2 Understanding (and Paying) for the Right to Use EO Data Who "Owns" Raw Copernicus Data? Are there property rights in raw, unstructured data? The EU clearly thinks so. "1. The Union shall be the owner of all tangible and intangible assets created or developed under Copernicus. To that effect, agreements shall be concluded with third parties wherever appropriate with regard to existing ownership rights.... 3. The Commission shall ensure...the optimal use of the assets...in particular it shall manage the IPRs relating to Copernicus...taking into account the need to protect and give value to the Union's IPRs...it shall ensure that the contracts entered into under Copernicus shall include the possibility of transferring or licensing IPRs arising from work performed under Copernicus." The Right to Use Copernicus Data - Free, Full and Open ("FFO") basis; - The EU's Legal Notice and Reg 1159/2013 explain that the license allows Users to use data to: 1. Reproduce; 2. Distribute; 3. Communicate; 4. Adapt, modify and combine with other data; 5. Any combination of these - A non-exclusive, time-unlimited license - "As is" no express or implied warranty as to quality or suitability. - The EU - ESA T's and C's show that Users can produce "Derivative Products" - those which contain "..a significant intellectual or creative achievement.." The Key Legal Documents You Need to Know About  Reg (EU) No. 377/2014 Establishing the Copernicus Programs and Repealing Reg (EU) 911/2010;  Commission Delegated Reg (EU) 1159/2013. These regulations were made under (EU) 911/2010 which has been repealed (see above) but these delegated regulations still apply;  Terms and Conditions for the Use of Sentinel data (a Joint EU - ESA document);  Legal Notice on the Use of Copernicus Sentinel Data and Service Information [Note: this document contains a specific reference to the "Copernicus Sentinel Data Policy" which does not appear to exist]. The Limitations of the EU License - The license is necessary but not sufficient to allow users to create commercially viable products and services - The EU license does not take account of the following: 1. Third party IPRs - work based on data from other sources - third party satellites or in situ sources. These will be made available probably on:  Non-negotiable terms;  With few if any warranties;  Paid-up or royalty-driven license terms;  Subject to third party law and dispute resolution process. 2. Access on scalable, paid-for basis to access cloud services as a P-a-a-S or S-a- a-S. Again, on non-negotiable, ("contract of adhesion") standard terms. These are third-party rights you have to pay for STEP 3 Creating New Derivative Products or Services Intellectual Property Rights and Derivative Works - General Observations  IPRs are national rights;  IPRs are negative rights - rights to stop rather than rights to do;  IPRs are property rights (in most countries) and are, for many companies, the most valuable business assets they will own;  BUT: Owning an IPR does not guarantee an income to its owner;  IPRs have to be "commercialized" - put to profitable use - by being sold or, more usually, licensed to third parties;  Make sure you own what you want to commercialize because: 1. A sale or license will usually require a warranty on ownership or authority to license; 2. If you commission IP from a third party - e.g. a software creator - take an assignment of the code or documentation; 3. Always avoid joint-ownership Creating EO Derivative Work – IPRs - An EO data user will almost certainly need to use third-party rights or resources - Cloud service agreement for access to data (even FFO) - SaaS or PaaS agreement/license to process data - Third-party access agreement for independent data sources - Any Derivative product/service must comply with contractual restrictions - The Derivative is most likely to be: 1. Database - protected by copyright/database right 2. Confidential information (held in database form) 3. Difficult to see scope for patent protection for EO data derived product/service STEP 4 Working Out Which IPR Protects Derivative Work or Service Databases - Are likely to be a significant focus for Derivate Works based on EO data; - The content and structure of a database can be protected as copyright works in the UK, provided (structure) there is sufficient intellectually creative effort involved; - Alternatively, EU law introduces sui generis right - Database Right - which protects the investment in time, money and effort in creating a database. This is referred to as protecting the "obtaining verification or presentation" of the database; - Both copyright and the database right are IPRs and can therefore be assigned (sold) or licensed in the same way as other IPRs. Copyright  Structure - only if sufficient intellectually creative effort in creation  Content - if content separately fulfils requirement  Consider author of structure separately from content  But: constantly moving content  Author's life + 70 years (+ 50 if computer-generated)  Property right - assignable and licensable  Automatic and cost-free  Reciprocal protection under Berne Convention  Protects idea not expression  Enforcement difficult  Work around ("clean room") can be simple Database Right  Sui generis right  Only exists in the EU  Position in the UK post-Brexit  Protects time, money and effort taken to create the DB-protects the "obtaining, verification or presentation" of the DB  15 years from end of calendar year of completion  Property right - assignable and licensable  Automatic and cost-free STEP 5 Best Method to Commercialize Derivative Work Commercialization Via Third Parties - Pre-contract Issues - Use Non-Disclosure Agreements. But use them cautiously. Record any confidential information you disclose; - Beware insistence by other side on use of their NDA; - Don't agree to an oral ("gentleman's handshake") deal; - Beware use of MoU (Memorandum of Understanding) - Universities often keen on these; - If you do agree to MoU, Letter of Intent or Head of Terms, don't agree to them being binding AND move to full agreement as soon as possible; - Beware use of "standard" template agreements, especially ones you buy cheaply from the Internet; - Take into account contracts subject to foreign law, especially if dispute resolution is exclusive and in a different country. Basic Rules of Licensing - Property and Contract  A license is based on the Licensor's property rights in its IP (in this case, in the IPR in a Derivative work based on raw EO Data)  But a license is a contractual right to do something which otherwise would amount to an infringement of the Licensor's rights  Since IPRs are national rights, a Licensor can (subject to competition law considerations) have different Licensees in different territories Site/Content Licensing as Major Source Of Hull Revenue - Non-exclusive - For specified business purposes; - Extent of grant: access, view, download, print, distribute [limited extracts] [to authorised recipients]; - Maybe combined Saas license; - Payment terms - One-time fully paid-up (unlikely); subscription service. - No warranty; - Comprehensive exclusion of liability; - Compliance with third party IPRs; - Governing law; - Consider-how this model works if part of licensed rights include access to confidential information. Mobile App Development and Sale App development is likely to be a source of revenue for EO data developers Note following issues: 1. Source of IP protection - copyright. [Possible role for patents?] 2. Third party contributors - e.g. graphics - take assignment or license; 3. Contract with App Store; 4. User Ts and Cs - jurisdiction and consumer protection; 5. Data protection issues re collection of personal data; 6. Payment options - one-off/trial/"freemium"/subscription purchases/content purchases. model/in-app