14th November 2017
Do you own your digital footprint? Asks commercial IP partner Matthew Pryke
The importance and value of a strong and developed digital footprint is widely recognised as a key business asset. However often businesses fail to ensure the legal rights associated with this important element of business’ brand identity is secured and owned.
When people refer to a digital footprint this is often made up of numerous different IP assets including website content, website source code, social media tags, data, database rights, domain names and other legal rights which work together to create an important mosaic of different legal rights, all of which play their part in a company’s digital strategy.
It would be fair to say as lawyers the due diligence we undertake is increasingly focussed on these digital intellectual property assets. Therefore any type of business must ensure, as a starting point, these assets are effectively owned and controlled by the business.
Securing ownership of rights
The challenge for a business is securing ownership of these rights requires different steps based on the asset class. In particular, and by way of example, ownership of a company’s website is often believed to be secured through the payment to a third party web developer of the agreed fee. In reality a website, whose rights will include copyright in items such as source code and other content, such as graphics and styling will only effectively transfer and be owned by the business if there is an appropriate assignment agreement in place which is signed to confirm transfer of ownership to the business. Unfortunately paying for a web developer to undertake work to create a website will provide the company with only a licence. Until an agreement is in writing and signed the asset will not be owned by the company.
Protection of data and domain names
Alternatively a right such as a domain name will need to be formalised with the internet registrar and correctly recorded as part of the “who is” information which is available via a public search.
In addition, rights such as data and database rights retained as part of a marketing and/or customer list will need to evidence appropriate consents and procedures have been secured from the data subject. This is necessary to ensure the data is both appropriately held and also useable by the company both now and into 2018 when the General Data Protection Regulation comes into force, placing a significant additional compliance burden on every company in the UK.
So why does all of this matter?
Crucially, a company’s ownership of its digital assets will be reviewed and reported on by any legal representative acting on behalf of a potential investor buyer. If concerns over ownership are identified this inevitably leads to delays, potential valuation reductions and, more often than not results in the deal failing to proceed.
Therefore our advice is always to proactively identify and secure ownership of your digital content well in advance of any intended exit or investment round. Taking steps now can ensure any plans to sell the business in the future are both protected and proactively optimised.
This article was originally posted on the Blue box website Do you own your digital footprint?