Brussels IP & Tech Update - December 2022
In this 2022 winter edition, we bring you news on the EU Regulatory Data Protection developments. We highlight a new publication concerning the UPC’s long arm jurisdiction, a publication exploring non-digital AI and the regulatory challenge concerning AI and a piece on the EU’s rules on liability for AI and the digital age.
We also share with you some insights on the GDPR International Data Transfer Regime, more specifically a legal reasoning advocating for the risk-based approach and two reports, namely the Belgian DPA’s Annual Report and the Tech Index report.
Finally, we discuss the new ‘Agoria Digital’ index for price revisions in the digital sector and the Impact of the new Belgian Civil Code on technology agreements.
We take this opportunity to wish you a Merry Christmas and a Happy New Year. We look forward to continuing to keep you up to date on developments and insights regarding intellectual property, technology and data protection matters in the course of 2023.
EU Regulatory Data Protection
On 19 October 2022, the Digital Services Act (DSA) was published in the Official Journal of the European Union. Together with the Digital Markets Act (DMA) and the Data Governance Act (DGA), it is part of the three instruments of the EU Data Strategy that have been adopted so far. For some aspects such as sanctions and competent supervisory authorities in the DGA, it is now up to each Member State to adopt implementing legislation which will likely result in different approaches across the EU. Awaiting entry into application (DGA: 24 September 2022, DMA: 2 May 2023 and DSA: 17 February 2024), we will keep you informed on any developments around these EU Data Regulations. You can read an overview of the various new actors created by these instruments here.
The UPC's long arm jurisdiction
The Administrative Committee has adopted further amendments to the Rules of Procedure of the UPC. These most recent amendments to the RoP include a particularly interesting change: the deletion of “Contracting Member States” and its replacement with “states”. In view of this last-minute change, this article aims to shed some light on the potential legal basis for this amendment. It also highlight the remaining uncertainty and inconsistencies with respect to existing European case law of the European Court of Justice.
DLA Piper Events organises on 12 January 2023 a virtual roundtable to discuss important aspects of procedure in first instance proceedings at the UPC from filing the complaint through to the grant of a possible injunction. We will specifically look at the role of the court in the proceedings and the potential scope of an injunction. The Panel includes Dr. Peter Meier-Beck, Simon Harries, Deborah Bould and senior lawyers from DLA Piper’s UPC team. Our panel will share their thoughts and insights on successfully running a case in the UPC and how to overcome the potential challenges of the new system. Our panelists will offer a variety of perspectives providing practical insight that is of relevance to in-house counsel irrespective of organizational size or sector. For more information, please contact Paula Ferdinales and Sarah Turner or click here.
Immeasurably better? Non-digital Artificial Intelligence and the regulatory challenge
Emerging AI regulatory standards have emphasised explainability and transparency as key requirements for AI systems. The European draft law on AI is one of the most advanced pieces of legislation in this area. While the number of amendments to the text indicates that many areas of the legislation are still evolving, the requirements for technical documentation, data retention and transparency are among the most established areas. Where AI is considered 'high risk', the law sets out a clear set of requirements to properly document the technical aspects of the AI system, including retention obligations. How might these various requirements impact any potential shift in AI research and development away from digital systems to the analogue domain? This publication explores this issue. Novel methods of interrogating and interpreting the operation of such systems will be required if they are to meet the high bar set by the regulators.
This is not just a European issue. Outside the EU, as well as the recent US "AI Bill of Rights", all raise similar concerns about the transparency and explainability of AI systems. Therefore, anyone seeking to explore the benefits of analogue AI in other countries is likely to face a similar challenge when legislation begins to apply, regardless of location.
The EU readies its rules on liability for AI and the digital age
On 28 September, the European Commission (Commission) announced that it had adopted two proposals aimed at bringing European liability rules into the digital age and addressing many of the new issues arising from novel technologies. The first, tasked with updating the existing regime under the Product Liability Directive (Liability Directive) and modernising existing rules on strict liability of manufacturers for defective products. The second, implementing the proposed AI Liability Directive (AI Directive), setting out a framework that allows victims of AI-related damage to seek compensation.
The adoption follows the public consultation closed on 10 January 2022 and forms part of a coordinated European approach to readying itself for the increasing prevalence of AI, having identified a number of specific challenges posed by the technology to the current regulatory framework. Alongside the adoption of the Commission’s proposed AI Regulation in April 2021 (AI Act), which focuses more on the monitoring and prevention of harm, the AI Directive aims to facilitate and harmonise a regime to address harms caused where AI obfuscates the situation. You can find the publication here.
The GDPR International Data Transfer Regime: the case for Proportionality and a Risk-Based Approach
Following recent regulatory and judicial attention in relation to the legal standard to be applied to personal data transfers abroad from the EEA – with EU supervisory authorities adopting an absolutist interpretation of the GDPR in the context of data transfer, - this joint paper with Clifford Chance argues the case for proportionality and a risk-based approach to international transfers.
The paper clearly points out that the European Charter of Fundamental Rights, the Treaty on the European Union, the GDPR and relevant CJEU case law require a proportionate, risk-based approach to personal data transfers to third countries outside the EEA, which can be implemented in practice and which will help to address the legal uncertainty created by an unlawful strict interpretation of Schrems II and Chapter V of the GDPR.
Belgian DPA publishes its 2021 Annual Report
According to the Belgian DPA 2021 was the year the number of files burst at the seams. It was a record year in terms of workload for the DPA. The number of incoming files increased immensely, with 279 requests for advice (a rise of 87,25% compared to 2020) and 1928 complaints (a rise of 181,46%), which entails the highest number since the creation of the DPA. The reason behind the large number of complaints was a Facebook data breach with a total of 1120 complaints stemming from the breach. The COVID-19 pandemic, as was the case in 2020, also marked the year with enforcement-related decisions and data processing guidance issued. You can find the press release and full report here.
Tech Index 2022 report
This flagship report is a study exploring the perceptions of technology growth, including insights from 350 senior business executives across Europe, in the fields of technology, financial services and the public sector. The data was analysed by 40 colleagues “Tech Indexers” around the world (including (US, EMEA and Asia Pacific) – this has generated some fascinating insights on topics including: ESG, Fintech, Teck M&A, AI/Robotics, Cyber Security, Data, Digital Transformation, Internet of Things etc.
A new ‘Agoria Digital’ index for price revisions in the digital sector
Inflation is affecting all sectors, and many technology companies are also feeling the impact of rising labour costs. Many technology contracts already contain price review clauses that allow agreed fees to be indexed annually. A lot of agreements refer to the (old) index published by Belgian technology federation Agoria. Recently, Agoria published a new Agoria Digital index that better tracks labour cost evolution and inflation in the digital sector. More information on this topic can be found in our blogpost here.
Impact of the new Belgian Civil Code on technology agreements
Less than two years ago, the Belgian legislator introduced a new legal regime of unlawful clauses in agreements between companies. It required several technology providers to review and update their standards terms and conditions and other contact templates. This year, the awaited new Book V “Obligations” of the Belgian Civil Code has been published replacing as from 1 January 2023 a large part of the old Civil Code. Its objective is to make Belgian contract law more accessible, more modern, and more balanced. Find out more about this new legal regime in our blogpost here.
Looking into the EU’s new Textile Strategy: Challenges and Opportunities
Earlier this year, the European Commission adopted the EU Textile Strategy, which outlines the EU’s vision for the future of the fashion industry. The EU is planning to lay down new rules that range from product design and manufacturing to textiles’ end-of-life. What are the EU’s textile priorities? What are the political, practical and legal considerations to keep an eye out for? How can companies accelerate transformations towards a more sustainable fashion sector?
On 6 December, Alexis Fierens, together with his colleagues of the Global Government Affairs team Richard Sterneberg and Anna Kovaleva, discussed these questions in a webinar debate with MEP Pernille Weiss and the Public Policy Manager in charge of sustainability at C&A, Isabelle Maurizi.
Please contact us if you would like a copy of the webinar recording.
DLA Piper Advertising Laws of the World Guide.
We are pleased to announce the launch of our Advertising Laws of the World guide – a practical introduction to the laws governing advertising in 13 key global jurisdictions. You can find the guide here.
DLA Piper Gambling Laws of the World Guide
Our Gambling Laws of the World guide provides insights to businesses and in-house lawyers on the options and potential restrictions when entering a new market. The guide offers a high-level overview of the applicable regime as a starting point for deeper analysis. You can find the guide here.
DLA Piper Global Sourcing Laws Guide and portal
We are pleased to announce the launch of our new Global Sourcing Laws guide. This guide will help you navigate through the relevant legislation and help you understand the differing approaches to common outsourcing requirements in line with local market conventions. You can find the guide here and the accompanying portal here.
We’d like to hear from you
Do you have an intellectual property, technology or data protection related question or a topic you would like us to address in this IP and Tech Update series? Don’t hesitate to email us and we’d be more than happy to look into it.