Data monetisation: checklist of the key contractual considerations

Ask the following questions to determine what contractual protections and rights might be required:

• What is the deal structure?
• What are the objectives of the deal?
• What rights and obligations will the counterparty have over your data?
• What rights and obligations will you have over the counterparty’s data?
• What restrictions will there be on the use/disclosure of the data by each party?
• Who are the key stakeholders?
• What data sets are involved?
  • Who owns the data?
  • Is it confidential?
  • Is it valuable?
  • What background data is there? (pre-existing data)
  • What foreground data is there? (data that is developed over the lifetime of the project)
  • What are the data flows?
  • How is the data currently used?
  • Does the data have value beyond the organisation?
  • Where and how is data stored?
    
    
• What publication rights might parties want?
• What security requirements are there for the data?
• What is the accuracy and consistency of the data? What is the integrity of the data?

Ways in which you can achieve contracting consistency:

• Build a menu of possible contractual protections
• Create flowcharts and decision trees
• Use scorecards to assess contractual risk prior to signing a contract
• Establish guidelines setting out preferred and prohibited contracted positions
• Have drafting options for data-related clauses – clause books
• Produce a central repository of deal precedents considered to represent best practice

Menu of contractual protections - leading to a more consistent contracting approach

Ownership/use of data 

• Clear statements
• Clear licences/permission to use
• Assignments
• Exclusivity

Restrictive covenants

• What data can and cannot be used for?
• Who can access and re-use the data?
• How can users access the data?

Technical issues

• Security obligations
• Segregation obligations
• Format requirements
• Data storage
• Data portability
• Audit

Confidentiality

• Security obligations
• Segregation obligations
• Format requirements
• Data storage
• Data portability
• Disclosure restrictions

Interplay with financial provisions

• Should any future use of firm’s data trigger financial upside?
• Financial business model

Governance

• What is the nature of the data (personal/confidential)?
• How will the data be used?
• Are there restrictions on commercialising the data?

Liability and indemnity

• Limits and caps on liabilities
• Indemnity resulting from partner’s breach

Termination

• Rights
• Data return/retention
• Impact on data originally provided
• Termination cases