GDPR: what a mess!

IP Draughts has been involved in several GDPR-related projects this week. By “involved” he means working with our GDPR expert, Francis Davey, to provide training, give advice, and negotiate GDPR issues. Francis is one of two experts in this subject at Anderson Law, the other being Stephen Brett.

By way of background, there are several stages in a GDPR (General Data Protection Regulation) analysis, including (a) working out whether one has personal data (old assumptions about anonymisation being sometimes irrelevant under the new law), (b) where it is moving from and to, (c) what is the legal justification for such movements (e.g. consent or another permitted basis), (d) have the rules surrounding that legal basis been complied with, and (e) which of these parties is controlling the data (rather than merely processing it on behalf of a controller), including sole, joint and co-controlling. This is before we get to questions of what agreements are legally required or desirable between the various parties.

It is easy to lose one’s listeners along the way, particularly if what one is proposing does not conform to their established way of doing things, or they have seen different practices being followed that supposedly comply with GDPR.

The following is a random set of themes that emerged from these projects. They are given from the perspective of someone who doesn’t claim to be a GDPR expert, but who has sat in on enough detailed discussions of GDPR to form an overview of the subject.

1. In the medical field, many, or most clinicians, have not really engaged with the new thinking required for compliance with GDPR. They are still assuming that consent is the best route, and that consent is broadly the same as consent for the purposes of conducting clinical trials.
2. The European Data Protection Board (formerly the Article 29 working party) has published some guidance on the use of consent as a route to GDPR compliance in relation to clinical trials. They have thrown a large jug of cold water on the idea that vulnerable patients in hospital can give consent freely. One could view their opinion as an act of staking out their own territory, and refusing to be influenced by the developed group-think on consent for the purposes of the Clinical Trials Regulation. In IP Draughts’ mind, their opinion raises the question of whether established clinician practices for the purposes of the CTR may have to change, as well.
3. It is all very well getting expert advice on the appropriate way to comply with the GDPR. But if that advice is out-of-line with established thinking (there is a lot of bad GDPR advice out there), how much appetite do organisations have for facing criticism by those whom they oversee or collaborate with, that they are creating unnecessary bureacratic obstacles?
4. Equally, one may have conducted a sound analysis of GDPR issues, and put in place an action plan that one thinks is compliant, but where another party is involved and that party has also received expert GDPR advice, how does one resolve honest disagreements between the experts over the correct course of action? One of the themes that has emerged in recent days is whether a technical collaboration on a project that involves use of personal data may amount to both collaborating parties determining the “means” for the use of personal data. If so, it seems to be considered that this may impose GDPR obligations on a party, even if they don’t receive any of that data. That seems counter-intuitive to IP Draughts, but he will leave it to the experts to decide how the law works in this situation.

IP Draughts can see the merits in establishing a new regime that requires parties to engage in a new way of thinking about protecting people’s personal data. But he is concerned that the legislation is so radical and has created so many areas of legal uncertainty, that it will be several years before the courts develop clear guidance on how to comply. In the meantime, users of personal data will be somewhere on a spectrum between the head-in-the-sand brigade and the fastidious user who is protected by a team of lawyers and data protection officers, like a Roman magistrate with his lictors. IP Draughts wonders whether there might be a badge of office to represent the fully-compliant data team, like the lictors’ use of a bundle of twigs and an axe.

 

Telling the court how to interpret a contract

For the last two days, IP Draughts has been attending a very interesting conference, organised by the UCL Faculty of Laws and titled The Contents of Commercial Contracts: Terms Affecting Freedoms.

The conference mostly consisted of academic lawyers at UCL and elsewhere giving 15-minute summaries of papers that they had written, on topics relevant to the overall theme of the conference. After each summary, another person, often a practitioner, gave a 5-minute response, and then the subject was opened to questions and comments from the audience. In this way, 18 diverse topics were discussed, ranging from implied terms of good faith under English law, to negative covenants in loan agreements.

Two discussions particularly engaged with IP Draughts and prompted him to ask questions. The first was a paper from Richard Calnan of Norton Rose Fulbright, on the subject Controlling Contract Interpretation. He circulated a one-page set of interpretation clauses of a kind that is rarely seen, some of which instructed the court to ignore some of the general principles of interpretation that they usually apply. For example, one of his clauses stated that where party was given a discretion, he could exercise that discretion in his own unfettered interests.

IP Draughts’ question to Richard was why he had selected some of the principles of interpretation but not others. Could there not be a 20-page set of terms that more thoroughly overrode or confirmed the general principles of interpretation that the English courts apply? Richard’s slightly unsatisfactory response was that this set of terms was a ‘teaser’.

The second talk that caused IP Draughts to raise his hand was given by Professor Sarah Green of the University of Bristol, on the subject Distance and Discretion: The Implications of Smart Contracting for Freedom of Contract. IP Draughts was keen to know the panellists views on whether the (future) rise in smart contracts was likely to affect how contracts generally were interpreted. Might the courts follow the lead of smart contracts, where terms were rigidly applied, rather than find ways around the strict adherence to contract terms, using long-established principles of interpretation?

IP Draughts gave the example of a contract that provided that, on termination of the contract, one party (the principal) could require the other (the distributor) to sell him certain equipment that had been used by the distributor in the course of performing the contract, but only if notice to buy was delivered to the seller within 28 days of termination. IP Draughts had been involved in a case with similar facts to these, where it was suggested that, in practice, the court would ignore the 28 day condition. Surely this was a situation where the time limit would be strictly enforced if it formed part of a smart contract?

The speakers for this session agreed with IP Draughts’ premise that there would be a general move towards a stricter enforcement of contract terms by the courts, even where the contract was not ‘smart’.

IP Draughts is grateful to the speakers for delivering such thought-provoking material, and to Professor Paul Davies and Dr Magda Raczynska at the UCL Centre for Commercial Law for organising the conference. It seems that the organisers hope to run similar conferences in future and that they would like suggestions on topics.

IP Draughts would like to put in a plea for a conference that focuses mainly on high-tech contracts and those where IP is important. Much as he enjoyed this conference, at times he found its focus on traditional ‘City’ subjects such as insurance, shipping and banking rather remote and, dare he say it, slightly old-fashioned.

 

The unwritten rules of legal practice: dare you ignore them?

You are at the start of a career in one of the branches of the law. In the UK, the main branches are barrister (or, in Scotland, advocate), solicitor or academic. Whichever branch you choose, it is important to learn the rules of the game.

There are the formal rules, which are mostly written down, such as rules of conduct and rules of procedure in court. And there are the unwritten rules. While there is no legal requirement to follow the unwritten rules, it takes a brave person to ignore them, particularly at the start of their legal career. Some of those ‘rules’ are useful guidance on best practice; others are pointless and tribal.

There is the dress code, which for barristers is rather formal, and sometimes makes very junior barristers look like they have been dressed by their mothers. In court, IP Draughts was taught to wear a dark, three-piece suit, or a double-breasted one with the buttons done up. In 1983, his rather avant-garde pupil master praised him for his balance of conformity and modernity when IP Draughts wore a plain, mid-grey flannel suit, double-breasted, but with conventional lapels rather than the pointy ones.

In later years when working in a firm of solicitors, IP Draughts was criticised by a partner (when both were in a lift soon after arriving at work) for wearing a padded, fawn coat, nearly new, that looked a bit like an anorak. It was a cold winter’s day. But the coat wasn’t acceptable to this partner. Such are the pressures of life and the attention to detail in a stuffy legal environment.

Dress code may be thought superficial, but the pressure to conform runs much deeper.

If you are at a certain point in your career and want to advance to the next stage, it would do you no harm to write a book. (Just the one, mind. Writing six books, like IP Draughts has done, doesn’t send the right signal at all.) IP Draughts can think of two judges and the head of an international IP body that followed this rite of passage shortly before their promotion.

IP Draughts has learnt that some of the lawyers attending his courses are reassured by references to case law, and think there is more substance in the course if it includes such references. Rather than fight this, over the years IP Draughts has upped the case citations in his talks, though his instinct is to focus on the principles that these cases follow rather than the individual manifestations of them in particular decisions.

In the world of academic law articles, it seems not to be enough to explain difficult points of law and make them easy to understand to the non-specialist reader. Instead, articles should follow the approach indicated in the Society of Legal Scholars’ guidance to would-be authors of articles in their journal, Legal Studies, and:

• Analyse the history, development and contemporary status of law with particular reference to doctrinal, conceptual, theoretical, comparative or socio-legal analyses such that they are of interest to a general legal readership international.
• Place current legal developments in historical and theoretical perspectives.
• Analyse contributions to the study of law in the fields of jurisprudence, legal history, and international and comparative law.

This guidance makes IP Draughts think he would never cut it as an academic lawyer. Having said that, he sees some articles, including some in Legal Studies, where material of the kind quoted above has been added in a rather clunky fashion, almost as an afterthought. Perhaps part of the trick of being a top academic, particularly in the more applied areas of legal research, is to make the sociological and normative content look a natural part of the article, rather than a bolted-on addition. In other words, learn how to play the game.

This all may sound cynical. In fact, it is just pointing out what many lawyers and other professionals soak up and follow unquestioningly. Some of these practices didn’t come naturally to IP Draughts, and he is glad that he is reaching a stage in his career where he doesn’t need to worry so much about unintentionally putting his foot in it.

IP Draughts’ advice for non-conformists at the start of their career is: think carefully about each convention, and if it serves no useful purpose and you dislike it, ditch it unless you are in a very conformist environment. And perhaps move out of that conformist environment as soon as you have learnt what you can from it.

 

 

 

 

 

Contract drafting wars: the rise of the rhetoricians

A recent discussion on LinkedIn with representatives of IACCM – The International Association for Contract & Commercial Management – has prompted several thoughts.

First, if we are trying to improve contract drafting, who is our target audience? When preparing a talk, book or article, IP Draughts’ tries to fix in his mind a typical audience member, and to tailor his material as a kind of conversation with that person.

For example, in our annual course on IP Transactions at UCL, the target audience is English solicitors who are starting a career in IP law. People in other categories are very welcome to attend, and many do – we have patent attorneys, non-IP lawyers, overseas lawyers and licensing managers in each year’s cohort. But we try to focus our material on the needs of our target group, and mainly in the context of English law. We try to avoid having generic, international content for people of different levels of experience, that satisfies no-one.

On the subject of improving the drafting of commercial contracts, a similar question arises. If you are writing about or teaching how to make contract drafting better, or are responsible for drafting contracts, whose needs are you focused on: commercial lawyers, business managers, consumers or someone else?

Perhaps there is no single audience, and contracts need to work for multiple audiences. It can be argued that a practising lawyer has to balance several interests, including:

• winning in court, if the contract wording comes before a judge for interpretation;
• making the contract clear for the business managers who have to use it;
• in negotiations, working within the prevailing idiom and respecting one’s counter-parties. This may involve not making radical changes to someone else’s draft unless there is a pressing commercial case for doing so, and sometimes living with imperfection.

Another factor that will sometimes be relevant is the legal framework for the type of contract in question. In the UK, one of the biggest issues is whether one is dealing with a business-to-business contract or a contract with consumers. In the latter case, EU laws may severely constrain both the type of contract terms that are enforceable and the way those terms are drafted. The requirement for plain, intelligible language in consumer contracts may push the drafter away from legalese and sophisticated legal concepts like indemnities and entire-agreement clauses.

Increasingly, IP Draughts thinks there is a case for treating contracts with unsophisticated small businesses in a similar way to consumer contracts. The people who run such businesses will often not have the experience to understand and cope with detailed written contracts. Some countries, eg Australia, have laws that govern franchise agreements. Franchises are an example of contracts that are sometimes entered into with small-scale, unsophisticated business people. Let’s call these people quasi-consumers, as they share many of the characteristics of consumers and there may be policy grounds for protecting them in their business dealings.

In IP Draughts’ mind, if one leaves aside contracts with consumers and quasi-consumers, there is still a vast category of general business contracts. When it comes to persuading people to improve the clarity and content of business contracts, IP Draughts sees the target audience as people who draft and negotiate those contracts, whether as lawyers or commercial managers.

What is the best way to persuade decision-makers to improve their business contracts? In IP Draughts’ view, it is to provide examples of well-drafted contracts, and provide training and guidance on how to improve contract wording. This is a focus on the nitty-gritty, the detail, and the hard work required to make things better over time. IP Draughts has also done some preliminary work on the idea of legislation, e.g. through trying to initiate a United Nations project to produce standards for international IP licence agreements.

There is more than one way of skinning a cat, or so we are told. IACCM is very interested in the subject of simplifying contracts, and has its own way of advocating this topic. Last week, IP Draughts tried to engage with them on LinkedIn, but withdrew when he felt he was being bludgeoned with statistics and examples that didn’t ring true to him, and which he felt were a kind of hard sales technique that repelled him. Tim Cummins and Sally Guyer of IACCM used the examples of indigenous peoples, and people who were illiterate, in support of their arguments for simplifying contracts. When IP Draughts mildly suggested that these examples were of marginal relevance to mainstream business contracts, he received this response from Sally:

…there are somewhere between 12,000 and 16,000 indigenous businesses in Australia. The Canadian Council for Aboriginal business cites 43,000 Indigenous entrepreneurs in Canada.  According to UN data from 2018, there are 370 million indigenous people living in more than 90 countries – I don’t believe that’s marginal.  Governments and major corporations around the world have policies (and rightly so) to ensure inclusion of small enterprise and indigenous businesses – do the contracts required to support their inclusion fall into your somewhat ubiquitous definition of “regular business contracts”?

IP Draughts has now had a chance to look into some of these statistics. At first glance they seem impressive, but a closer examination reveals them to be misleading.

First, on the Australian example, it appears from this PWC report of 2018 that there are about 12,000 Aboriginal owner-managers of businesses. The number of incorporated businesses or businesses that employ staff is much smaller, and they contribute a tiny percentage of the GDP of Australia.

Similarly it appears from this Canadian report that “according to the 2011 National Household Survey (NHS), there are more than 43,000 First Nations, Inuit and Métis in Canada who are business owners.” This sounds like a big number. But if you dig into the details of this report, you discover for example that:

In general, Aboriginal businesses tend to be quite small, with three-quarters (73%) that are unincorporated and more than six in ten (64%) that have no employees.

And:

The majority of Aboriginal businesses also continue to be home-based. Two-thirds (66%) of Aboriginal business owners report that their business currently operates from their home or the home of their business partner, which is essentially unchanged from 2010 (66%).

In IP Draughts’ mind, this research confirms his initial impression that these examples are of marginal relevance. This has nothing to do with the ethnicity of the people whose statistics are given. He has exactly the same reaction to any very small business.  Taking business contracts as a whole, to focus on the needs of (for example) a one-man-band plumber in Wallingford, Oxfordshire, will not tell us much about how business contracts should be drafted or structured. Often, these businesses won’t even have a written contract with their customers.

Of course, some of the people covered by the statistics that Sally quotes will be operating on a larger scale and will be regularly involved in mainstream, written business contracts. But the headline statistics presented by IACCM are, in IP Draughts’ view, misleading and shouty.

There may be a place for IACCM’s approach in the bigger picture. Some people may be persuaded by bold, high-level arguments made with passion. But in the world that IP Draughts inhabits, business people and their lawyers prefer a more grounded approach that reflects everyday experience, when deciding what terms to include in their contracts and how to express them.

IP Draughts’ starting point is that people who share a professional interest – here, to make business contracts more user-friendly – should be able to cooperate in pursuit of a common cause. Clearly, we will all need to do some work before there can be a meeting of minds.