IP insider: Big data and intellectual property

‘Big data’ is the buzz term of the moment, but what about where it intersects with intellectual property – can investments in big data and associated analytics be protected without overprotecting them?

Big data is one of the most exciting and powerful of the numerous popular business technology topics in the modern era. Though the ‘big’ moniker originally described an abundance of data too large to be stored and analysed by conventional database technology, the term is now more accurately representative of the size of the opportunity rather than the need to buy new hardware for a server room. Accordingly, the most appropriate definition of ‘big data’ in the modern business world is likely more about an endeavour than a thing. At its core, big data is a movement about deriving knowledge from vast quantities of information.

The definition of ‘big data’ gets more specific as the industry, organisation and goal become more defined. To a high-speed trading firm, big data is about making money by analysing market data, identifying significant trends, predicting actions and making fast decisions to exploit opportunities such as arbitrage to turn a profit. To a fast-food chain, big data might steer R&D investments towards new menu items that have the greatest chance of winning in the market. For a company selling products to pet owners, big data might identify its customers’ particular dog breed.

Big data can enable firms to illuminate correlations with potentially immense business value. Part mathematician, part anthropologist, part behavioural economist and part oracle, the best data scientists can use the combination of powerful computing systems and seemingly endless sources of potentially relevant information to glean not only insight into the past and the real-time events of the present, but also foresight into events yet to come, choices yet to be made (and their likely ramifications) and trends yet to materialise.

However, as critics have voiced strenuously, big data can quickly become sinister. Today, retailers have a more detailed account of our lives than we ourselves can access. National retailers, with their huge number of customer touch points, are so data rich that their interpretation efforts often outpace human intuition. While these retailers are not breaking any laws, there is much debate about the need for policies to harmonise privacy, prudence, social acceptance and ownership with an undeniable business opportunity.

One aspect of big data that has been little discussed to date is its relationship with the IP system. Is the existing system adequate to protect investments in big data and associated analytics appropriately without overprotecting them? Should sui generis protection be considered, as it has in the past for collections of data? Should big data be exempted from IP protection in favour of a ‘data wants to be free’ approach? By exploring the intersection of big data and intellectual property, we can navigate the rapidly emerging field of data analysis. Both can be exploited to generate great value, maximise social good or strike a careful balance between both goals.

It is not yet clear whether the IP system will have to change in order to facilitate the optimum value from big data. However, we know generally that strong protection is vital; history teaches that countries with weak IP protection attract less investment, generate less focus and achieve less aggregate and balanced results.

We also know that big data now affects every single industry. Data is fast becoming its own asset class – a similar road to that taken by software around 30 years ago. Software, as an asset class, has driven much economic growth for the last quarter-century. As for big data, start-ups that specialise in making sense of data are proliferating and established players are moving in new directions, building new capabilities to make sense of the mountains of data.

Users of all shapes and sizes are increasingly willing to pay for big data because the value is no longer in question. The issue is not whether insight can be gleaned from the data; it is whether decision makers can determine the right direction to take when presented with a particular trend, correlation, insight or prediction generated by their data.

While we do not yet have a roadmap for the intersection between big data and intellectual property, we do have a few viable starting points. Patents can continue to play a role along the lines of their current function: protecting inventive ways to draw value from data, but not the data itself. The current copyright regime seems to be in about the right place relative to big data and there is no evidence that protection needs to be extended to the data itself beyond what is currently provided.

The trademark system may have an important role to play in accelerating the development of data as an asset class. With the importance of cleaning data, the value of sound organisation and useful metadata, and the growth of participants in these valuable data-processing fields, there may be a useful role for certification marks in this space. One can envision standards-setting organisations establishing norms and permitting the use of applicable certification marks according to an agreed level of competence and conformity. Such standards would enable the kinds of study and follow-on use of big data across industries, and beyond the original purposes for which the data was collected, that promise to make big data such an unparalleled creator of value.

David Kappos is a partner at Cravath, Swaine & Moore, New York, and the former director of the US Patent and Trademark Office

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