Data as a class of property

On different occasions we have discussed the implication of “Data” as a property class. The early discussions on “Data” as a property in legal circles was around the property of “Domain Name”. It was one of the first “Pure Virtual Property” which had no physical equivalent. It had a visual presence in the form of a “Website” but was created as an identity for reaching a particular digital destination. In technical terms, a domain name was a “Pointer”, a set of instructions associated with a standard protocol which a computer application like a “Browser” was programmed to recognize as an “Instruction to search and connect to a remote server and fetch the default page to the user’s browser”.

The property of a domain name being a standard reference to a set of electronic documents stored on a web server with a gateway page and further hyper links created a value perception on the key characters which we called as “Domain Name”. In view of the similarity with the previously known property of “Trade Mark” which was a “Symbol” which was associated with a product of service, domain names were often compared with trademarks.

However there was a significant difference between domain names and trademarks in the sense that the “Trademarks” were created entirely by the owner while “Domain Names” are “Proposed by a owner and registered through a domain name registrar licensed by ICANN which itself is a self regulatory body constituted by a set of stake holders”. The creator of a domain name could create a trade mark or copyright on the unique mark but using it as a domain name required the setting up of domain name servers in a given form which was at the sole control of a registrar. The Registrar could reject the request for creating a domain name or allow creation of multiple domain names in different TLDs or create confusingly similar domain names which diluted the “Value”.

Courts across the globe have often been confronted with the dilemma of considering the nature of domain name as a property.

Obviously, Domain name is not a tangible property. It is “Intangible” but it is a “Special Intangible” property. It is created like an “Actionable Claim” against the domain name registrar. It can be transferred. But going by the dispute resolution mechanism, (UDRP) the “Saleability” of the domain name restricted with the need to “Act in Good faith”. Otherwise the registration can be classified as “Cyber Squatting” and could be cancelled. It is therefore necessary for the owner of a domain name to first of all have some kind of an interest in the domain name and then use it in good faith.

For example, “Naavi” is a set of ascii characters (actually an arrangement of binaries in a particular order as the computer sees it) and Na.Vijayashankar claims a good faith right to use it as his identity on the web space. Partly this is further corroborated because in the native language of Kannada, the abbreviation of the initials Na.Vi. reads as Naavi. Hence there is a “prima facie right for Na.Vijayashankar” to use the domain name “Naavi” as a brand name with any extension “Org” or others. In a way the IPR is a justification for the right to a domain name. However there are many other instances where there  may be no such genuine reason for some body to appropriate a domain name and a person can register any name as long as he can build a brand personality around this. The various domain name dispute cases (Refer for some examples)

The net impact of these established principles is that “Domain Name is a property which can be owned by a person and transferred for consideration with some restrictions”. It can have a “Cost of acquisition” which is different from “Perceived Market Value”.

This concept would be relevant when we discuss “Data Valuation” as well as “Data Inheritance” which are two concepts which we are discussing in depth as part of the introduction of the Personal Data Protection Act (PDPB 2019) in India and preparing for the “Non Personal Data Governance Act” (NPDGA) which is in the pipe line and provides for monetization of Non Personal Data through a “Data Exchange”.

“Data” is defined as a “an arrangement of binary values which when interpreted through appropriate devices and applications create a human experience of a text, sound, image etc. In the coming days we will have devices that can convert the binary values into smell and touch also so that all five sensory perceptions of humans namely sight, hearing, taste, smell and touch can be created in the minds through transmission of appropriate signals to the human brain.

In law, Information Technology Act 2000 defines “Data” and this is further divided into “Personal Data” and “Non Personal Data” by virtue of other laws like the PDPB 2019 or NPDGA (proposed). At each of these stages, Data carries a perception in the minds of the human beholder and hence Naavi’s Theory of Data created a hypothesis that “Data is created by technology but perceived by human beings”.  (Refer to various articles here)

In practice however, legal uncertainties remain and we are confronted with a challenge when we raise the questions

a) Can we bring the value of data in to the financial statements of a corporate entity?

b) Can a legal heir inherit the “Data Property” on the death of the data principal (data subject)

Naavi has initiated a academic debate on both these topics and different expert committees of FDPPI are exploring the issues to arrive at a professional view.

The end result of these academic exploration would be a suggestion to the Government of India to consider a suitable supplementary legislation which should extend the meaning of data both in ITA 2000 and in PDPA of India and lead to the development of an acceptable “global accounting standards for Data value” and an acceptable “Data Inheritance law” in India as part of the Digital Assets Succession Act.

Hopefully by that time we would have forgotten the political distinctions of Hindu Succession Act, Muslim Succession Act, Christian Succession Act, Parsi Succession Act , Jain Succession Act, Buddhist Succession Act etc and converge on a single Digital Asset succession Act.

This “Digital Valuation and Succession Act” will include

1) Defining Data as a new class of asset and not necessarily to be compared with the known asset classes such as movable, immovable, actionable claims etc.

2) Defining a method of valuation of Data

3) Defining the a means of  disclosure of data value in an organization to the public

4) Defining the ownership rights and means of transfer

5) Possibility of “Nomination” of Data

6) Possibility of “Joint ownership of data” (eg: Either or survivor or Former or Survivor of data held with data processors like Twitter or Facebook)

7) An established methodology for recognizing handling of data of deceased data principals, without automatic deletion  or automatic appropriation by the data fiduciary

8) An established methodology for the legal heirs of a deceased to “Claim” data assets in the hands of intermediaries.

9) An established methodology for the Government to appropriate “Unclaimed Data Assets” after classifying them as “Unclaimed” through a process similar to branding a data asset as “Dormant” and “Inoperative”.

10) Establishment of a  “Uniform Data Disputes Resolution Policy” (UDDRP) to be adopted voluntarily by Data Fiduciaries on the lines of UDRP/INDRP to facilitate data disputes resolution through an ADR process.

and Any other aspect relevant to data valuation, data value disclosure.

Such a law should be compatible with  the current data related laws such as Information Technology Act 2000, Personal Data Protection Act (as proposed),  Non Personal Data Governance Act (As envisaged) and any other laws likely to be considered in the meantime.

FDPPI has been described as the “Dada of Data Protection Agencies in India” and therefore has the responsibility to take constructive steps in finding a solution to these problems of the industry.

In this direction FDPPI is constituting a special committee to draft a bill on “Data Valuation and Succession Act”, deliberate on the issue in consultation with other academic institutions such as law colleges and professional bodies who may be interested.

A proposal is also being sent to the Government of India if it would be interested in setting up such a committee in which case FDPPI may withdraw its committee.


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About Vijayashankar Na

Naavi is a veteran Cyber Law specialist in India and is presently working from Bangalore as an Information Assurance Consultant. Pioneered concepts such as ITA 2008 compliance, Naavi is also the founder of Cyber Law College, a virtual Cyber Law Education institution. He now has been focusing on the projects such as Secure Digital India and Cyber Insurance
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