If You Can't Beat Them, Join Them! How to Make Disruptive Technology Work For You

Roger Bickerstaff, Partner, Bird & Bird LLP

Michelle Chan, Partner, Bird & Bird LLP

Martin Felli, Chief Legal Officer, Corporate Secretary, JDA Software

David Kennedy, Executive Vice President, General Counsel and Chief Compliance Officer, Infosys

Digital transformation impacts many industries. Increasingly, companies must embrace digital transformation both in order to combat the impact of new market-entrants and to place themselves in an advantageous position in relation to their competitors. This presentation and accompanying materials will identify four key areas of legal and commercial challenge along the following lines:

  • Structuring Issues - once a company has decided that it wants to engage in a disruptive project it needs to think about how it will acquire the technology. Main routes:
  • In-house development – less likely: difficult for a company to disrupt itself without external input;
  • Supplier-customer purchase arrangements – possible but lacks extensive buy-in on an on-going basis from both sides;
  • Joint venture between customer and tech provider – becoming increasingly common;
  • Corporate acquisition – can appear attractive but requires the acquirer to potentially "bet the business" on one technology.
  • Additional considerations:
  • Geographical variations – what are the common approaches in the US, Asia and Europe?
  • Pros and cons of each approach –
  • Complexities of JVs: difficult to set up, not easy to operate; can be competition law issues; IP ownership is a particularly tricky issue;
  • Corporate acquisition: when does it make sense, how to retain talent, should acquired entity be integrated into purchaser?
  • Supplier- customer: useful for "building-blocks" of disruptive services (e.g. use of cloud solutions – quick + cheap to set up)
  • Regulatory Issues – Is the Project Legal? The company needs to ensure that the proposed activities are legal or take the business decision that it will proceed and figure out compliance as it goes.
  • Sector specific regulation: each area of business has its sector specific regulation: key role for in-house lawyer in leading the assessment of the new activities with the regulatory environment. Regulation often does not cover the new activities and requires engagement with the regulatory authorities.
  • Examples:
  • Early crowd-funding companies engaging with the UK Financial Services regulator;
  • Autonomous cars – good example of a technology where the tech is pretty much ready, but the regulatory environment needs a lot of work;
  • Risks with figuring it out as you go – compare Uber and Aereo. The Aereo case is included in materials.
  • Human gene editing - CRISPR/Cas9 & other biotech innovations.
  • General regulatory environment:
  • Consumer legislation
  • Competition law – particularly for JVs
  • Data protection – there are different US, Euro, and Asian perspectives on this –for EU issues - see Bird & Bird "Guide to the GDPR" (included in materials)
  • Trade mark issues: impact of digital transformation on established trade mark protection arrangements – see e.g.Merck case (case analysis available at
  • Data Ownership and Security -companies impacted by disruptive technologies will produce a lot more data about their customers, supply chains, business operations, etc. What they can and should do with the data is likely to have a significant impact on the overall success of the disrupted company. It may be that the commercial exploitation of the data becomes the main focus of the disrupted company.
  • Data ownership – who controls the use of the data? Other than privacy, are there other restrictions that need to be taken into account? Different perspectives in the US, Europe and Asia.
  • For a general overview of the issues - see"Unlocking the Value of Personal Data: From Collection to Usage", World Economic Forum (included in materials)
  • Presentation on data ownership in Europe (included in materials)– for an English perspective on data ownership – see"Information Ownership in the Cloud", Chris Reed, Queen Mary University of Londonavailable at
  • Other issues: copyright protection for databases - EU Database Right gives a sui generis right which exists alongside but is different to copyright protection explored in the Feist case.
  • For the EU approach to Database protection seeFootball Dataco case (case analysis available at
  • For comparison, seeFeist Publications, Inc. v. Rural Telephone Service Company, Inc.(included in materials)
  • Security – what are the relevant security constraints? E.g. in the EU the NIS (Network and Information Systems) Directive imposes obligations on providers of "essential services".
  • What are the different constraints in other locations?For a resume of the NIS Directive obligations see
  • Artificial Intelligence - the use of AI in the business environment is increasing rapidly.
  • Popular examples include:Infosys’ Mana, IBM's Watson + the Ross legal spin-off. DeepMind is being used by Google to optimise power usage in data centres and Accenture is building a new business around IPsoft’s Amelia AI.
  • See various press reports on the use of IBM Ross by Baker Hostetler available at
  • The legal implications of AI and – in particular – machine learning are significant: how are liability issues to be addressed when a machine (as opposed to a programmer or the user) takes a decision (or makes a mistake) or produces IP? Are there possible legal liabilities where no one may be at fault?
  • What policy issues will arise around AI and should efforts be proprietary or open? See the OpenAI efforts sponsored by Sam Altman and Elon Musk at
  • What are the different approaches to liability issues around the world? In most places the regulatory environment has not yet caught up. Countries that already have strict liability of the owner may be better placed.
  • Registration and compulsory insurance schemes?
  • Concept of limited legal personality for some instances of AI
  • For a detailed analysis of the legal implications of AI in specific sectors – see
  • See also Draft Report to the Commission on Civil Law Rules on Robotics, EU Committee on Legal Affairs available at

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