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First, sack all the IP lawyers.

In an article in the Times the argument is made that the true value and potential of intellectual property rights to the UK economy is being stifled by IP laws that are not fit for purpose, and that lawyers are in some way both ignorant of the economic value of patents to business owners and guilty of undermining entrepreneuralism.As one of the comments in response to this article notes, it is incorrect to blame patent law, which does permit the transfer, licensing and securitisation of patents (which is also true of other IP rights) and it is also incorrect to state that IP rights are not traded. Furthermore, the suggestion that (IP) lawyers are in some way complicit in this failure to realise value from IP rights is not a picture that I recognise in any way, shape or form.From my perspective, the problem is neither the law nor the lawyers. The difficulties are much more complex than the article seems to suggest. There is still a widespread under-appreciation in most businesses of the importance and value of intellectual property rights. Relatively few businesses either audit or carry out a valuation of their IP rights. If it is done at all, it tends to happen only at the point when a business, together with its IP rights, is being prepared for sale. There are a number of valuation methodologies that are used to put a price on those rights, but a full appreciation of the nuances that tend to be applied in those methodologies is rarely shared equally by valuers and rights owners. In addition, IP rights are not only time-bound (20 years for most UK patents, for example), but susceptible of having their value removed at a stroke. This can happen if a particular IP right is found to be invalid, or to require a licence from a third party, or to be an infringement of other rights. The risk of this happening clearly has an impact on value, and IP lawyers frequently advise on the scope and nature of such risks, as well as recommending steps to mitigate those risks in order to maximise value.  The article also implies that IP is not traded in the same way that commodities are traded. While this is far less common in the UK that in the US, it is untrue that it does not happen at all, but rather that the practical and economic (as well as legal) problems mentioned above make this an exercise fraught with difficulty and the risk that the stated value is or becomes illusory. Securitisation of copyright does happen in the music industry, where an established artist sells the right to the income from exploitation of recordings of their back catalogue, but even that cannot be regarded as a completely safe investment. The value of Taylor Swift’s original recordings has presumably been seriously impacted by her re-recording her early songs.The suggestions in the article that innovative companies will look to the US or South Korea for valuation, and that valuation in Europe “is even more hidebound” are too simplistic to be taken at face value. IP rights are mostly national, which means that different legal regimes apply to them in every country. The “Chanel” trade mark has to be registered in every country where branded products are sold. While there are international agreements, conventions and protocols which introduce a degree of harmonisation, the process is far from complete. So the suggestion that a single country can produce a mechanism for monetisation of IP rights that works equally well worldwide is more than a little misleading.The article does argue for early valuation of IP rights, with which I fully agree, but there also needs to be a continuing review, by means of an IP audit of what rights exist in the business; whether they are owned or licensed; whether they are susceptible to competitive threats and what their expected life might be. IP Valuers and lawyers also need to engage business owners in a continuing discussion about different opportunities to realise that value and to promote learning and understanding that different exploitation models are likely to result in different levels of risk and different levels of reward.Far from being barriers to exploitation of IP rights, IP lawyers working with IP valuers are one of the most important professional services that a business needs to engage with in order to maximise value and minimise risk.

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Is your personal data safe on Zoom?

Over the course of the Pandemic, Zoom, together with other video conferencing applications, has become an indispensable business tool. But the platform has been beset by reports of a number of security and privacy problems.  “Zoom bombing”, where a private Zoom meeting is hijacked by uninvited outsiders (or even invited participants), who disrupt or post offensive material within the meeting, has affected a growing number of users.Better security measures, both within the platform and applied by meeting organisers, seems to have largely resolved this particular problem but others are still only partially resolved, or not at all. A helpful article on the Tom’s guide website (Zoom security issues: Here’s everything that’s gone wrong (so far) | Tom’s Guide) provides a detailed, and quite lengthy, list of the issues and their current status.As with the recent report about the Estate Agent’s video of a house in Devon that showed a large quantity of the personal data of the house owners, using a video conference facility needs some prior thought and planning.  Apart from your personal appearance and positioning, what else is visible on screen when you have your camera on?  If it includes personal material such as family photographs or confidential documents, or items such as an asthma inhaler or a stairlift that would indicate particular heath problems, it would be very sensible to make sure that these cannot be seen.If a business wishes to introduce some new technology it should carry out a detailed data privacy impact assessment.  At a more basic level, some simple pre-planning and checks can and should be applied by individuals as well. Use of passwords and two-factor authentication are recommended.  Of course, these steps will only help if the Zoom bomber is not invited.  It seems that increasing numbers of meeting-disrupters are invited participants, so in those cases there need to be effective steps for such participants to be muted or removed from the meeting.  Since November 2020 Zoom has now improved its functionality on these issues.The article concludes that Zoom is much safer than it was, and that the problems it has experienced and had to resolve have helped to make it a safer and better video conference platform.  So the message is to carry on using Zoom, but just take some sensible precautions to minimise the risks of inadvertent or unauthorised disclosure of personal data.

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Firmware cyber-attacks: the next big thing?

An interesting article in the BBC news highlights a lesser-known, but potentially devastating cyber-threat for medium to larger businesses – a hack into their computer firmware.  A survey conducted by Microsoft has found that 80% of firms have experienced a firm ware attack in the past 2 years, but less than a third of security budgets are allocated to protect firmware. In addition, the US National Institute of Standards and Technology has recorded a 5 fold increase in firmware attacks in the last 4 years. Covid lockdown has created an environment where the time and trouble needed to arrange such an attack has become much less of a problem for cyber-criminals.Firmware is the inbuilt code which controls each component in a PC.  It is harder to access than software, but if infiltrated it can be almost impossible to detect, and may leave no trace. Regular patch updates for the firmware as well as the software can reduce the risk of an attack succeeding, but because it is more complicated to put in place, it may be overlooked or delayed.While the risk is only likely to be significant for medium to large size businesses, it is clearly a growing threat that should be considered as part of the data risk management strategy of all larger businesses. With more staff working from home and connecting remotely to work servers, each external device which connects provides an opportunity for hackers. Steps that should be taken include a review of how and through which devices employees connect to the central system, a reassessment of technical and organisational cyber-security measures to ensure that firmware protection is given sufficient prominence, and further training for employees to raise awareness of the risks and ensure that they take the necessary steps to keep any authorised personal devices up to standard with recommended protection measures. This last is perhaps the most important, since most cyber-breaches and data breaches occur as the result of human error, inattention or carelessness.

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Post-Brexit breathing space for EU-UK transfers of personal data

Even though celebrations to welcome in 2021 were rather muted in light of the ongoing pandemic, the New Year did bring some good news to businesses in the United Kingdom and the European Economic Area (EEA) in respect of personal data transfers.Prior to the end of the Brexit transition period, the issue of how to ensure ongoing personal data transfers from the EEA to the UK in 2021 was causing a headache for many businesses. Although the UK’s position was that transfers of personal data to the EEA could continue as usual without any additional legal hurdles after Brexit, this position was not mirrored by the European Union in respect of flows of personal data from the EEA to the UK.While the last-minute post-Brexit Trade and Co-operation Agreement between the EU and the UK does not grant an adequacy decision to the UK in respect of transfers of personal data, Article FINPROV.10A does provide for a grace period for transfers of personal data from the EEA to the UK. Initially this grace period will last for four months, unless in that time the UK has obtained an adequacy decision from the EU in respect of data protection. If it hasn’t, then the grace period will be extended by a further two months (provided both the UK and the EU agree) to allow further time to finalise an adequacy agreement.This is welcome news to businesses, who can now continue to transfer personal data between the UK and the EU for the next four to six months without requiring additional measures as a result of the UK having become a ‘third country’. The fact this has been agreed gives a positive indication that both sides are serious about reaching an adequacy decision as soon as possible. However, there is no guarantee an adequacy decision will be reached, and the grace period will only continue as long as the UK does not amend its own data protection legislation to diverge from rules applicable in the EU. Organisations for whom such data transfers are critical would therefore be well advised to consider alternative arrangements in case no such adequacy decision materialises by the end of the grace period.

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No rest for the European Data Protection Board

This month has seen a flurry of activity amongst European authorities and regulators in the data protection sphere.The European Data Protection Board (EDPB), which includes representatives from the data protection regulators of each EU member state, has published a number of recommendations that businesses should take note of in order to comply with the General Data Protection Regulation (GDPR).Firstly, in the wake of the much-publicised Schrems II case this summer, the EDPB has endeavoured to give some much-needed clarity on what organisations need to do if they want to transfer personal data outside of the European Economic Area (EEA). Assuming that other routes to achieving this in compliance with the GDPR (such as sending personal data to a country that has received an adequacy decision from the EU) are unavailable, where organisations wish to rely on the EU Commission’s standard contractual clauses (SCCs), the recommendations confirm that they must verify on a case-by-case basis whether the destination country affords equivalent levels of protection as within the EEA. In addition, they must supplement the SCCs with additional measures, ranging from technical and organisational to contractual. Whichever steps are taken must be documented to comply with the GDPR’s accountability duty.The recommendations also stress the need to consider whether access to transferred personal data by government or surveillance authorities in the destination country is likely. If so, exporting organisations will need to consider whether this access may undermine the SCCs. A second set of recommendations sets out four criteria, known as ‘essential guarantees’, against which to determine whether the interference of the destination country’s surveillance laws with individuals’ data protection and privacy rights is acceptable by EU standards. These are as follows:Is the processing is based on clear, precise, and accessible rules?Is the processing is necessary and proportionate to the legitimate objectives pursued?Is there is an independent oversight mechanism?Are effective remedies available to individuals concerned?In addition, the European Commission has at last published its draft set of revised standard contractual clauses, which are currently open for consultation and are expected to be formally adopted early next year. Happily, these include processor-to-controller standard contractual clauses, which, in the event the UK receives no adequacy decision from the EU before the end of the Brexit transition period, could be the lifeline businesses need to establish compliant personal data flows from the EEA to a UK that will soon be a ‘third country’.Raj Shah and Howard Ricklow from Collyer Bristow’s data privacy team will be discussing all of the above and more in a live interactive webinar on Thursday 26 November 2020 at 11am GMT. To register your interest, please click here.

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Test-and-trace data sharing: a healthy lesson for private-sector businesses on the importance of transparency

The BBC reported this week that the UK Department of Health and Social Care could share contact-tracing information with police in England, given there is a legal requirement to isolate after a positive test. The news of this practice quickly prompted a flurry of concerned commentary from public health officials and privacy campaigners, with the British Medical Association warning that police involvement could be counterproductive, insofar as it could deter individuals from testing for COVID-19.Though this news concerns the public sector, the public reaction to it serves as a useful reminder of the importance of transparency to private-sector organisations who process personal data. If you collect individuals’ personal data and share that data with third parties, even if only occasionally, the GDPR requires that you give clear information about these data sharing practices to those individuals at the time when you collect their personal data. This should ideally be communicated via your privacy notice, which must state the recipients of the shared personal data.Provided your lawful basis for processing the shared personal data is not consent, it is possible for only ‘categories of recipients’ to identified rather than named, individual recipients, but if you opt to take this less specific approach, you will need to be able to demonstrate why it is fair to do so and endeavour to be as specific as possible about the type of recipient (such as what industry or sector it belongs to) and its location. If, however, you are relying on consent as your lawful basis, then your privacy notice should specifically identify the recipients of the personal data, especially if they are third-party independent or joint controllers. Otherwise, there is a risk that the GDPR’s requirement for the consent to be specific will not be met.As this news story illustrates, the more upfront with individuals you are at the outset about the way you handle their personal data, the more confidence they will have in your organisation. It is more difficult to gain back trust once lost than it is to lose it in the first place.

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Good(ish) news for BA

In July 2019 the Information Commissioners Office announced an intention to fine BA £183M for infringements of the GDPR. Around 400,000 users of the BA website had been diverted to a fraudulent site where the customers’ login, payment and travel details were harvested. The breach was not discovered until 2 months later. The ICO considered that BA’s security measures were inadequate and proposed the largest ever fine, albeit well below the maximum fine that could have been imposed. It not only reflected the seriousness of the specific breach but sent a message to large corporates that, unless they paid close attention to data privacy, they could expect very tough enforcement measures for breaches.Since then, BA has taken steps to improve the security of the data obtained via its website and has cooperated with the ICO, while challenging the size of the proposed fine.The ICO has today announced that the fine actually imposed is £20M. This is obviously a very welcome reduction in BA’s liability at a time when its business has been decimated by the coronavirus. It also reflects the benefit of swift action to remedy a breach (so far as possible) and close cooperation with the ICO. Nevertheless, it is still the largest fine confirmed by the ICO, reinforcing the fundamental importance of GDPR compliance.  

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New EDPB guidelines: copying and pasting GDPR provisions into your commercial agreements isn’t enough

The European Data Protection Board (EDPB) has published a set of draft guidelines clarifying the key GDPR concepts of controllers and processors by providing specific examples and helpful flowcharts to help apply these concepts in practice. Buried within these guidelines is the paragraph quoted below, which has significant implications for day-to-day commercial contracts.Under Article 28 of the GDPR, where one party (Party B) is appointed by another (Party A) to provide certain services that requires Party B to process personal data on behalf of Party A (which is the data controller), certain clauses are mandatory in the commercial contract between those parties (or in a separate data processing agreement).Where Party A’s processing activities are minimal and are considered low-risk, it is common for the relevant agreement simply to repeat the provisions of Article 28 without further elaboration.However, the EDPB states in the guidelines that simply restating the provisions of Article 28 without any additional detail is not sufficient. In particular, the EDPB states that the contract or separate data processing agreement required by Article 28 also needs to include information regarding the security measures to be adopted by the processor (Party B in the example above), as well as providing for a regular review of these measures.The level of detail required is ‘such as to enable the controller to assess the appropriateness of the measures pursuant to Article 32(1) of the GDPR’. This requires both the controller (Party A) and the processor (Party B) to take into account the state of the art, the costs of implementation, and the nature, scope, context and purposes of the processing, as well as the risk of varying likelihood and severity for the rights and freedoms of those individuals whose data is processed.The draft guidelines remain open to public consultation until 19 October 2020. Any interested parties are encouraged to contribute to the consultation by providing comments on the guidelines via the link below.

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No Data Protection Impact Assessment (DPIA) undertaken for Test and Trace programme – but what is a DPIA, anyway?

Earlier today, the BBC reported the latest in an increasingly long line of problems to have plagued the country’s COVID-19 ‘Test and Trace’ programme: it has not complied with the General Data Protection Regulation (GDPR).Following a legal challenge from privacy campaigners, the Department of Health has admitted that the programme, which aims to trace contacts of those infected with COVID-19 in order to prevent further spreading of the virus, was launched without any Data Protection Impact Assessment (DPIA) having been undertaken.But what exactly is a DPIA and when is one needed?A DPIA is a process designed to assess whether a proposed activity that involves processing personal data is necessary and proportionate. It should be used to assess and manage any risks to the rights and freedoms of individuals that might result from that processing activity by determining ways of addressing them. DPIAs are key tools in demonstrating a business’s compliance with its accountability obligations under the GDPR.The GDPR requires that DPIAs be carried out if any processing of personal data is “likely to result in a high risk to the rights and freedoms of natural persons”. Guidance on the matter recommends considering the need for a DPIA if a business plans to:process any ‘special category’ personal data on a large scale, as is the case with the ‘Test and Trace’ programme (health data constitutes ‘special category’ personal data);implement any automatic decision making or profiling that significantly affects the person whose data is processed (for example, to provide or refuse a service to that person);systematically monitor individuals (for example, via CCTV);deploy innovative technology that uses personal data (for example, facial recognition software implemented at offices to enable access to certain areas); and/orprocess personal data of vulnerable individuals (which might include employees) where there is an imbalance of power in the relationship and, consequently, those individuals have no genuine option to object.DPIAs should be considered at the start of any new project that fits one or more of the above criteria, so that potential risks to the relevant personal data are addressed in advance of implementation (which is what the Department of Health failed to do in this case).If your business has already undertaken a DPIA in respect of a processing activity, it will need to review that DPIA periodically (and ideally at least once every 2 to 3 years), particularly if there is any change in the context or nature of the processing.Undertaking a DPIA will not only help your business demonstrate accountability and compliance with a GDPR, but will also build trust amongst those whose personal data is processed. This is much easier to lose than it is to gain. The risk to the UK government posed by this latest development is that fewer UK citizens, having lost confidence in its handling of their personal data, may participate in the Test and Trace scheme. Without significant participation across the population, the country is unlikely to have an effective contact tracing system.

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Preparing for 4 July: Pubs and restaurants required to collect customers’ details

There will be some respite from life under lockdown in England on 4 July, when pubs, bars, cafés, takeaway services, and restaurants will be able to re-open, subject to high-level guidance issued by the UK government in this last week, and which is linked to below.Under the guidance, operators of the above-mentioned businesses are asked to keep a temporary record of customers’ contact details for 21 days in order to support the NHS’s Test and Trace response (see the extract quoted below).Contact details such as names, phone numbers, and email addresses constitute personal data under the GDPR and Data Protection Act 2018. That means these businesses will need to ensure that their collation and retention of these contact details comply with this legislation. The guidance says little as to what exactly is expected of these businesses in terms of compliance. In the extract quoted below, the government has stated that it will announce further details “shortly”, but adds that it does expect these businesses to collect customer data “to help fight the virus”.Although there is little time for these businesses to prepare and implement detailed data collection and retention procedures before Saturday, there are some key steps that businesses can take before collecting customers’ contact details. These include:Informing customers that their contact details will be collected and letting them know how it will be processed and who it might be shared with (e.g. NHS contract tracers). Privacy notices ought to be updated if necessary and made available to view wherever bookings are made, whether online or at the premises.Ascertaining the correct lawful basis or bases for the collection of customer data and stating this in the privacy notice. Relying on consent as the lawful basis in this scenario may be problematic, since this can be withdrawn by customers at any time, and it may not satisfy the requirement of having been “freely given” if access to the premises is made conditional upon customers disclosing their contact details.Ensuring customers’ contact details are used only for the purposes for which they were collected. That means those details can be used to support the Test and Trace operation, but cannot be used for marketing or other purposes (unless another lawful basis for those other purposes has been established).Training staff to keep customers’ contact details confidential. Businesses must have appropriate technical and organisational measures in place to prevent any misuse or unlawful access of this personal data.Putting in place procedures to delete customers’ contact details after the 21-day period is over, unless there is another lawful basis established for the continued processing of that personal data.The UK’s privacy regulator, the Information Commissioner’s Office (ICO), is unlikely to impose heavy fines on these already-challenged businesses in the leisure and hospitality sector for failure to achieve full compliance in such a short space of time. However, as the pandemic rages on and businesses continue to collect customers’ details, expectations of compliance will mount, not just from the ICO, but from the population at large.

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