Who owns your digital twin?

Unnecessary surprises can be avoided by examining the legal ownership of a digital twin from the outset.

Digital twins – realistic digital representations of physical assets – can deliver improved insights for enhanced decision making, including through predicting outcomes and assessing ‘what-if’ scenarios. This, says Takis Katsoulakos, director of Inlecom, leading the European Commission coalition Digital Twin for Green Shipping (DT4GS), leads to real-time optimisation of processes and operations and, ultimately, to unlocking value which is otherwise difficult to grasp through conventional means. 

Ship owners and managers are looking to pick up on these opportunities – but what are the legal implications when it comes to ownership of these digital platforms or systems? As Tamara Quinn, partner at Osborne Clarke, says: “With any digital twin project, a key priority is to start considering the legal issues at an early stage, so that there are no unpleasant surprises during negotiations.”

The small print

Teams need to make sure that contracts deal appropriately with the intellectual property, data and other legal issues that are specific to digital twin projects, she warns. The challenges are clear; the platform or software will be pulling in various bits of data – for example, from sensors on the engine telling the user how it is operating (in order to analyse or optimise performance); or to assist with predictive maintenance (perhaps detecting whether cracks are developing or picking up other issues that need addressing). But who owns the IPR (Intellectual Property Rights)? 

Is the system something the company has developed in-house from scratch, or is it being used on licence from a third-party provider? If consultants have been brought in to create the system, do they own the IPR to the software being used?  

Often valuable data is being generated, gathered and presented to the operator/user in a way they can understand, interact with and question. But who actually owns the data generated by the system? There is a genuine risk that the party which thinks it is the “owner” may discover that it is not – or at least that it does not have exclusive ownership. 

There could be a situation where the operator or provider of a piece of equipment or system within the vessel has access to the data – for example, engine manufacturers which provide, maintain and run the kit as a profit stream. If that is the case, can that party use the data for more than just their own purposes, perhaps passing it on to another? And what if the ship owner wants to provide some of that data to others, such as maintenance service providers – does the contract allow for them to have access, and what are those parties allowed to do with the data? 

Perhaps of greatest concern is the legal position of ship owner versus operator/manager. If a vessel is chartered out and the data is gathered by the charterer, what access to this data will the owner have when the ship is returned in a few years’ time? Could the owner be left without any information about how its own ship works?

Pragmatism pays

Shipping is a really interesting context for these issues, says Tamara Quinn, and there are quite a few potential issues.  

“It's important to think carefully about the contracts that govern access to and use of the data that underpins the digital twin,” she says. “For example, is the provider of the platform software getting access to your data? Can a service provider use your data only to provide a service back to you, or can they also use it for their own purposes, or to provide services or information to others? If you as shipowner want to provide data gathered by one service provider to other or replacement providers, does the contract cover this?” 

She concludes: “It’s crucial to think broadly about the legal aspects of a digital twin project, trying to balance futureproofing with pragmatism; don’t just accept the position put forward by system suppliers and consultants.” 

Finally, the term ‘digital twin’ can cover a multitude of different concepts: from very high-tech data-driven, detailed, digital representation of pieces of kit, to something closer to just “holding some data about something”, i.e., not a fully functioning digital twin. However, even if people are not necessarily thinking theirs is a digital twin system, many of the same issues should be considered.

Felicity Landon is a freelance maritime journalist, writer and editor