Data provision contract review items and dispute cases

Law firm Veat received a request from digital healthcare platform Company A (hereinafter referred to as the "client") to review the legal aspects of the data provision contract.

The client requested a comprehensive review of the data contract to minimize legal risks that may arise in the process of receiving processed data from the data provider and to establish clear rights relationships.
With innovation based on data becoming a key element, various data have emerged as important resources. Law firm Veat, when the client enters into a contract to receive data, guided them to consider essential matters that require legal review, such as the assignment of data rights, scope of use, rights relationships after contract termination, types of data provided, inclusion of personal information, derivative data, third-party provision of data, and subcontracting. 

1. Assignment of Data Rights
It is necessary to clearly determine who the ownership and usage rights are assigned to after the data is provided. In particular, for processed data, clear provisions are needed regarding the assignment of intellectual property rights and scope of use.

• Dispute Cases Related to Assignment of Data Rights

When an algorithm or service function is developed based on the data, the data provider may claim co-ownership of the resulting product and lead to legal disputes.

2. Scope of Use and Rights Relationships After Contract Termination
The period and purpose for which the data can be used should be defined in advance, and it is also important to review whether the data should be returned or deleted after the data contract is terminated. 

• Dispute Cases Arising from Use of Data Beyond the Defined Scope

If data was specified in the data contract to be used only for "internal research and analysis purposes," but a new commercial service was developed based on it and released to the public or profits were generated, the data provider may claim a breach of the data contract.

3. Types of Data Provided and Inclusion of Personal Information
The types of data being provided should be specifically defined, and if personal information is included, protective measures to comply with relevant legal regulations should be prepared.

• Dispute Cases Arising from Misunderstanding of Personal Information Inclusion

If the data provider claims that the data is provided in an “anonymized state,” but the client recombines the data to make it re-identifiable or combines it with external data to identify individuals, legal issues may arise.

4. Derivative Data and Third-Party Provision
The issue of ownership of new data created by the client by processing the data should be agreed in advance. It is also important to clearly define the possibility and conditions of third-party provision of data.

• Dispute Cases Related to Assignment of Derivative Data Rights

When new statistical data, models, or prediction algorithms are created by analyzing processed data, disputes frequently arise as to who owns the resulting data.

5. Matters Related to Subcontracting
Whether the data can be subcontracted to another company and the conditions thereof should be included in the contract to ensure safe handling of the data.

• Dispute Cases Related to Third-Party Provision and Subcontracting

If data is provided to third parties such as external vendors, collaborators, or cloud providers without being specified in the contract, damages or legal action may arise from breach of contract. Subcontracting is also a sensitive matter.
Data provision contracts are therefore very important legal documents. A data provision contract contains various legal issues such as assignment of data rights, scope of use, processing of personal information, derivative data, and third-party provision, so it is essential to review the contract carefully before signing it. 

Law firm Veat provides optimized legal advice to IT and startup companies. The legal challenges faced by IT companies go beyond simple contract review and include complex issues arising at the intersection of technology and law. Accordingly, Law firm Veat provides in-depth legal advice in various IT areas such as software development, data provision and data protection, and AI-related regulations. Law firm Veat provides customized data provision contract review services to meet the needs of its clients and help them minimize legal risks and provide stable services while operating a digital healthcare platform or IT company. If you need legal advice regarding data provision contracts or related matters, please contact Law firm Veat at any time.

Thank you.
Law firm Veat