As technology and innovation are nowadays central to all economic activities, also the most ancient one, agriculture, is opening its doors to let the digital transformation come through.
Some refer to this phenomenon as to Agriculture 4.0, while others prefer the definitions of Ag-tech or Digital Agriculture. What is sure, is that the big revolution in the sector is yet to come, meaning that there are a number of opportunities behind the corner.
The demand for innovation in Agriculture mostly comes from the Planet cultivations’ need to become sustainable and able to face the new challenges brought by climate change, and as well to create a better way to securely trace products along the supply chain, and to enhance products’ quality and work conditions.
Under the broad definition of Ag-tech we find, among others, the exploitation by cloud service platforms of big data, especially in the field of the so-called precision agriculture, the use of drones and other robots, the application of blockchain to trace the supply chain.
This digitalization process brings along a number of legal issues which have to be carefully analyzed and understood, in order to protect the various interests at stake, especially in the absence of a specific regulation, which is the case in Italy at least for now.
As a premise, it has to be said that notwithstanding the lack of specific provisions in the law, Italian and EU authorities are perfectly aware of the importance of said phenomenon, to which they drew attention in several reports by both the Italian Ministry of Agriculture (“Guidelines for the development of precision agriculture in Italy”, 2017) and the EU Commission (among others, “European Parliamentary Research Service”, 2016). Great effort is made in order to spread this new technological approach to agriculture and farming among all the relevant stakeholders across the EU, with the aim of reaching also the small and medium sized farms, that in Italy represent a great percentage of the agriculture enterprise.
Usually new technologies create the need for new regulations and this is the case here as well. Nonetheless, most of the issues raised may be analyzed referring to laws applicable to other economic sectors.
This contribution is focused on the legal issues raised by farm data sharing in the context of Ag-tech. More specifically, the aim would be to give a very first answer to the following questions: when data are gathered from a given piece of land, to whom should they belong? To the farmer or to the owner of the device that collects data, transfers them to a sharing platform and owns the latter? And what if the farmer and the landowner are not the same person or entity? Above all, can or should these data constitute trade secrets and therefore be granted protection under the relevant laws? Moreover, to what extent should the sharing platform owner be able to exploit the data? And finally, how should contracts be drafted so to be of aid in addressing these issues, enhancing transparency and avoiding possible litigation?
Farm data may include both site-specific data such as applied seeding rates, yield monitor data, soil information and meta data such as the number of acres and geo-localization information. These data may be collected by the farmer himself or through the use of specific devices attached to rigs, drones or other machinery; then they are manually or automatically (for example trough wireless connections) transferred to a technology platform (usually a cloud-based system), and most of the times then combined with data coming from other farmers (eventually anonymized) by the platform provider. The platform then usually allows to catalogue and analyze the data alone or aggregated in a way that allows the farmer to make more informed decisions, avoid waste and so on.
One of the critical issues arising in this context relates to the ownership of the data. It’s fundamental to give an answer once for all to this question, in order to avoid that such uncertainty determines the loss of this important economic value.
So, when data is collected by a sensor placed on a farmer’s truck during his plowing activities, should it belong to the farmer or to the technology provider? The latter may include both the subject that provides the equipment (drones, trucks etc.), and the owner of the cloud platform to which the data is transferred, that may not necessarily coincide. Generally speaking, under Italian law, ownership over something entails the possibility to enjoy the fruits, i.e. the proceeds, of the owned goods. Therefore, it is probably more correct – and this is the opinion mostly spread among the operators worldwide – to consider agricultural data as the direct fruits of the land, other than those of the equipment or of the platform. By embracing this approach, the data belong to the farmer. Nonetheless, there is still a significant number of the industry members that are convinced that they own the data since they are generated by their equipment. Moreover, when the land is leased by the owner to a farmer that cultivates it, according to Italian law the fruits (and so the data) belong to the tenant, and not to the landowner, unless of course their contract provides otherwise.
It would be easier to answer this question if there were a specific provision in the law attributing ownership of agricultural data to one of the subjects involved in its collection and processing. But this is not the case for now, and it is deemed reasonable to adopt the above mentioned approach and consider that most of the times data belongs to the farmer.
In such context, it is now interesting to assess whether these data can be protected as intellectual property and in particular, whether or not they could suit the definition of trade secrets, thus enjoying the related protection. Under Italian law (and it is the same in all EU countries), data can be protected as a trade secret when they are secret, they derive economic value from not being generally known and accessible and they are subject to protective measures to keep them secret (article 98 of the Italian Industrial Property Code).
A formula or method of growing crops (possibly derived from the aggregation of information on the soil composition, water, pesticides used) could definitely fall, at least theoretically, within such a definition. This circumstance would depend on its actual secrecy and on the protective measures put in place by the farmer. As per the first, it should be noted that the requirement is – at least most recently – interpreted by the Italian courts quite extensively, meaning that to be considered secret it is sufficient that the information cannot be accessed in an easy manner, such as through a search on the internet. And it is certainly possible then, that a method of growing meets such a requirement, and derives this way a specific economic value. As per the protective measures, instead, it is hard to imagine that farmers actually implement them. Usually these safeguards are identified as reasonable steps taken in order to maintain secrecy of the information, and especially in the context of sharing data on a platform, it would be even harder to consider them in place.
In light of the above, it could turn out to be difficult for a farmer whose data is misappropriated or misused, to enforce the protection of trade secrets to receive compensation for damages. But one thing is sure: the more farmers gather together to fight for their rights and the higher is the chance they obtain legal protection. This because farm data acquire more value when they are aggregated, but the value is still hard to quantify. Again, the lack of certainty around the actual value of the data constitutes a disincentive to contribute to their generation, while they are indeed extremely useful for the agricultural sector and for the world economy.
Therefore, in the absence of specific provisions of the law (in the US, the issue has been addressed inter alia through implementing the system of the “Ag Data Transparent certification standard”), and due to the presence of numerous different stakeholders, it becomes essential for all the parties involved to resort to well-crafted contracts, in order to clearly discipline the ownership and use of ag data.
These contracts should involve first of all the service providers and the farmers and should define precisely what data are the object of the contract, and what are the rights of the platform provider over them. For example, it should establish whether the provider has the right to modify the data, to what extent they are portable, in which manners may the data be shared, and so on. The use of ag data should be regulated between landowner and tenant as well, and more in general any time there is a new subject that gets involved in the process of ag data collection and sharing (for example, third party aggregators).
Summing up, it is in the interest of all stakeholders and of the world agriculture and economy in general, that ag data is collected, shared and used as far and better as possible, given that they represent an instrument towards efficiency. Fostering such objective, in the absence of specific provisions of law, means to put the necessary effort when drafting contracts in order to enhance transparency and to regulate all the aspects of the data sharing process, keeping in mind that in the context of agriculture there clearly is an issue with reference to the need for education to new technologies and protection of weak parties.
Should you wish to discuss the topic further, please don’t hesitate to contact me at micaela.jerusalmi@dlapiper.com