Key IP and technology issues for Building and Construction (B&C) industry

12 September 2018

The continuing introduction of new technologies into the B&C industry has brought with it a number of vital IP and regulatory considerations. It is important to understand these developments as they arise in the industry, in order to maintain a competitive advantage and avoid potential legal disputes.

Are you compliant with the new technology regulations?

Infrastructure Australia’s Smart Cities, Smart Suburbs program has $50 million in grants available for smart infrastructure projects. The second round of funding, worth approx. $14 million in total, is due to open this year. Asset owners are also looking to build analytics capabilities into their physical infrastructure assets to improve the quality, responsiveness and cost efficiency of maintenance services.

Construction-technology firms have garnered $10 billion in investment funding from 2011 through early 2017. As a
recent example, Australian-based construction software vendor Aconex was purchased by Oracle for $1.6 billion in
December 2017. Software tools are being developed across all key construction project phases (design, preconstruction, construction, and operations and management).

New technologies are increasingly important for B&C companies to gain a competitive advantage; however this can
result in compliance risks.

Are you breaching new data laws?

The European Union General Data Protection Regulation (GDPR) has been in effect from 25 May 2018, and introduces new data protection rights including breach notification, a right to access personal information, and a right to request data erasure. While the GDPR is law in the EU, it is likely to have an impact on Australian businesses that operate internationally, as it applies to organisations that act within the EU or interact with its citizens.

Further, as of 22 February 2018 the Notifiable Data Breaches (NDB) scheme has taken effect, requiring that organisations earning over $3 million per annum notify all individuals to whom a data breach relates, where serious harm is a likely result of the eligible data breach. Failing to notify may result in penalties up to $420,000 for individuals, and $2.1 million for organisations

Have you cleared the brand for your new project?

Registering trade marks and monitoring the activities of competitors are vital in establishing a business in any
commercial industry. Clearance checks also help to avoid potential infringements of others’ registered IP. As an example, in the 2010 Federal Court decision of Mantra Group Pty v Tailly Pty Ltd, it was held that even registering a domain name containing registered IP may constitute an infringement. Similarly, in the 2017 Federal Court decision of Accor v Liv, it was held that use of a trade mark in the metadata ‘behind’ a website can also be considered an infringement.

Do you know what you own?

Research indicates that 70% to 80% of a company’s market capitalisation comes in the form of intangible assets such as IP. Neglecting to conduct appropriate IP due diligence checks prior to a commercial transaction can be a costly oversight. To highlight this risk, in 2009 Apple Inc. purchased a Chinese ‘iPad’ trade mark from a UK firm, only to discover in 2012 that the firm had no capacity to enter into the agreement. Apple Inc. was then unable to use its brand in the Chinese market.

It is important to ascertain who retains ownership over new and potentially valuable IP arising from B&C projects.
Contractors need to clearly state which parties will own any new IP which is developed, and whether there are any
ongoing licensing arrangements in place. By way of example, if a contractor develops a new construction method as part of a project, it will likely want to exploit that new method in other projects.

Recommendations
Review the use of technology in B&C projects and regulatory requirements

It is increasingly common for construction projects to involve at least some technology components such as software,
third party patented technology and autonomous construction equipment. Businesses should consider taking action
including reviewing client licence terms, drafting appropriate access terms for subcontractors, and reinforcing forwardfacing systems, in order to comply with data and IT requirements.

B&C clients have started deploying robotics and ‘internet of things’ devices in the field, such as the use of drones
to survey construction locations remotely. It may be necessary to seek legal advice regarding regulatory and liability
considerations arising from the use of this new technology.

Protect new applications and services

As B&C processes continue to become digitalised and collaborative it is increasingly important to secure the appropriate IP and contractual rights required to ensure access to, and the use of these data sets. In addition, as the demand for ‘smart infrastructure’ and smart information and communications technology increases, so too does the volume, complexity and value of digital information stored as data sets.

When developing or employing digital initiatives, such as applications and data-driven value-added services, it is
necessary to consider the associated legal issues. This may include drafting terms of service, understanding copyright,
design and patent requirements, or seeking preliminary trade mark and branding advice.

Understand data protection and privacy obligations

With the GDPR and mandatory data breach notification requirements now in effect, it is a good time to review the
systems in place regarding data protection and management of personal information to ensure that they are compliant
with statutory provisions both in Australia and overseas.

Businesses should also ensure that, where they interact with countries in the EU in the course of commercial dealings,
their data systems and policies adhere to GDPR regulations, so as to avoid potential penalties.

Undertake IP due diligence

B&C clients should take steps to ensure that all necessary due diligence checks are performed prior to engaging in a
commercial contract. This can often include engaging with professionals to ensure that, where possible, IP is registered. Where unregistered IP is used by the business, it may be necessary to run searches to reduce the chances of infringing another business’ IP. This includes checking to make sure a new brand is available for use.

In large B&C projects, businesses should ensure that employee and contractor agreements are drafted carefully, so as to avoid inadvertently assigning ownership of IP developed during the course of the project to a third party. It is important to properly document how any pre-existing or new IP will be dealt with as part of a B&C project.

How can we help you?

HWL Ebsworth’s B&C and IP teams advise on the laws of each Australian jurisdiction and have considerable experience helping clients manage their compliance obligations arising from laws outside of Australia. If any of the above issues are relevant to your business, please feel free to contact a member of our IP, Technology & Media or Building & Construction teams to discuss possible solutions and next steps.

This article was written by Luke Dale, Partner and Tim Lee, Senior Associate.

Luke Dale

P: +61 8 8205 0580

E: lcdale@hwle.com.au 

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