Lexpert magazine features articles and columns on developments in legal practice management, deals and lawsuits of interest in Canada, the law and business issues of interest to legal professionals and businesses that purchase legal services.
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54 LEXPERT MAGAZINE | MARCH/APRIL 2018 includes human beings deciding where to plant explosives to generate seismic waves that they were going to record. e Alberta Court of Queen's Bench was quite gener- ous and flexible in defining the amount of human intervention." is "more thoughtful consideration of the existence of copyright in a database or the data itself," explains Kratz, "is impor- tant for acquirers to consider during M&A transactions." Now we have to go from the acquirer's perspective back to Due Dili- gence and say, did the seller actually own the copyright? Or where did the data come from? If there is copyright, the question is, do you own or it or is there an intermediary between you, the seller and where the data is being acquired. So we have to do back and look at who [or what] is recording the data, who is processing the data." DATA DUE DILIGENCE Of course, to properly answer the above questions, M&A teams need to do thor- ough Due Diligence, drilling down deep into the data's roots and the potential tan- gle of multitudinous licensing agreements and copyright issues. One thing a sophisticated buyer will oen do, says Martin Kratz, is conduct penetration tests. Using so-called "white hackers" a buyer – with a target's permis- sion – will see how easy it is to get past a target's firewalls and into its data. (at's much harder to do, of course, in a hostile takeover, increasing the risk of a buyer ac- quiring tainted data.) If getting into the data was too easy, that should raise red flags about potential liabilities that may be lurk- ing in the data. Such Due Diligence is not all about sophisticated data audits on the part of a buyer's legal and consulting teams during M&A, says George Takach. It is im- portant to interview people as well. Before a purchaser's team enters a data room, especially if the data assets contain personal information, the parties enter into a contractual agreement about the Due Diligence process itself, in accordance with federal and provincial statutes. ose statutes, such as Canada's Anti- Spam Legislation (CASL) and PIPEDA, for instance, may require a vendor to give noti- fications to affected individuals, says Brad- ley Freedman, a Vancouver-based partner and National Leader of Cybersecurity Law Group at Borden Ladner Gervais LLP. "e ability to use data for commercial messages will depend on the provenance of the data set," says Freedman. How was it collected? Does it reflect express, or im- plied, consent? Can that be proven? If there were third-party sources, can the buyer be confident that those sources are legiti- mate?" Fortunately, there are automation technologies to help with the appropriate Due Diligence. And it seems, purchasers are still taking on risk. Big Data takes us to the realm of unintended consequences. "I have been involved in transactions," recounts Freedman, "where vendors have told me, 'Look, we can't tell you with any sort of confidence where we got this data.'" And that's a risk a buyer has to decide to ac- cept or not. Anthony Davis is a freelance business and investigative writer based in Calgary. Lexpert DealsWire is a great way to keep abreast of the significant M&A deals that are making news right now. It will examine and analyze key developments and trends as they happen and will report on the key players as deals are announced and closed both in Canada and around the world. Sign up today for bi-weekly email alerts at www.lexpert.ca/dealswire GET THE LATEST NEWS AND VIEWS ON M& A | BIG DATA ASSETS |