Do you own the data collected from precision technology used in your farming operation?
About the Author: Joe Aker is a 5th generation farmer in Abilene, KS and a Partner with Cottonwood Law Group, LC in Abilene where he practices agricultural law and taxation, estate and business planning, and family law.
The use of Precision farming technologies is ever expanding in farming operations across rural America. We know who owns the bushels produced and their value, but who owns the data your combine, tractor, planter, sprayer, and irrigation systems are producing and, even more importantly, who owns the value that data has?
Combining all the yield and soil maps, irrigation, weather, input application, and planting data, which is increasingly accurate and detailed, a farmer can predict, enhance, prescribe, and refine their cropping inputs for current and future growing years. This added value is specific to the land the crops are growing on and can aid an operation continually by saving money from over application and increasing profits where increased application is necessary. Some fields save pennies, others dollars per acre; both add up significantly over thousands of acres.
In a lease agreement, a landlord may have a claim for the data collected on their land. The tenant operator has just as much of a claim if they are the ones who purchased and implemented the tools that collect the data. The best way to sort out this dilemma is to have a written lease that specifies who owns the data collected during the cropping year(s) of the lease. However, most farm leases are oral and if data ownership is contested, there is no statutory guidance to determine the data’s ownership. Details such as whether the lease agreement is a cash-rent agreement, or a crop-share agreement are extremely vital when determining who may have a claim for the data’s ownership. In the world of technology, courts are usually not in the forefront of dilemmas created by its implementation; the same applies here. Courts have not decided this issue yet.
Written lease agreements detailing ownership are an easy solution. Similarly, a written operating agreement specifying data ownership in a partnership, LLC, or Corporation can aid in the event of a dispute. For example, two brothers own equipment and operate as an LLC end up in a dispute and go their separate ways, which brother has a claim for the ownership of the precision farming data collected by the LLC’s farming operation? Put it in writing and help prevent any problems.
What if in the same scenario of the LLC going through dissolution, the brothers were also tenants of leased land data was collected on and the landlord, now terminating the lease and bringing in a new tenant, wanted to retain the data collected by the brothers and give it to the new tenant? From the landlord’s perspective, the data is of important value because the new tenant would have a head-start to knowing what inputs and outputs the land needs and is capable of. From the out-going tenant’s perspective, the data collected was valuable to them during their lease for which they incurred expenses collecting the data and it would be unjust enrichment for the incoming tenant.
One argument giving ownership of precision farming data to the producer is attempting to classify it as a trade secret. According to the Uniform Trade Secrets Act, a “trade secret” is: “information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (i) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.” Although this seems straightforward, one commenter argued that “all of the definitions at least imply a requirement of something more than raw information; for example, courts demonstrate a strong predisposition to protection of ‘business information’ such as business methods like market surveys, business plans, and service models.” “That line of reasoning seems more analogous to a farmer's marketing plans or business analyses than farm data itself.” “If one argues farm data collectively represents the embodiment of a process of growing a crop rather than simply comprising descriptive information about the crop, one might attempt to leverage the cases demonstrating what appears to be a predisposal of courts to grant trade protection to process information.” Although no court has ruled that precision agriculture data constitutes a trade secret, the definition of a trade secret provides a path to argue during litigation over the ownership rights of the data in favor of the farmer.
Another data ownership claim could be held by the technology company who created the data collection tool itself. For this claim, it is important to read the software terms of conditions and use agreements.
The technology company could have, and in many cases, does have access to detailed, minute-by-minute data collected by a Farmer about: the rainfall, weather, temperature, seeding population and variety, fertilizer rates and frequency, chemical applications, soil type and holding capacity, irrigation data, photoperiod, crop disease intensity, drought pressure, yield, and the list goes on. This detailed, real-world, minute-by-minute research and development of new crop inputs like seed, chemicals, fertilizers, and precision agriculture technology is very valuable to companies behind these innovations. This in-field research can provide much needed information to companies trying to perfect and develop new technologies in production agriculture. Precision agriculture technology companies surely cannot ignore this potentially very lucrative use for the data stored on their clouds and servers by producers. However, when “[m]any companies offer consulting or data analysis services, [they] have company policies addressing various concerns such as confidentiality of the information, specifying to whom the data may be disclosed, and uses that may be made of the data.”
So, to answer the question who owns precision farm data, read your agreements, and if you don’t have it in writing be sure to find professional assistance familiar with the newest advancements in agricultural technology.
Disclaimer: The information in this article is intended for general informational purposes only. This information is not intended to be, nor should be interpreted as, legal advice or a legal opinion. The reader should not consider this information to be an invitation to an attorney-client relationship, should not rely on the information presented here for any purpose, and should always seek the legal advice of counsel in the appropriate jurisdiction.