AgTech: An emerging industry
Full of opportunities and legal challenges
As home to more than forty per cent of Canada's cultivated farmland1 and a rapidly growing tech sector2, Saskatchewan has quickly developed into a thriving incubator for agricultural technology (typically referred to as “AgTech”). With the importance of the agricultural industry to rural economies in Saskatchewan, AgTech has become an integral part of Saskatchewan’s rural economies.
Several important legal issues have emerged as legislators and industry participants grapple with the rapidly growing AgTech industry. Some of these developments include right to repair laws, data privacy and security laws, and the essential need to address intellectual property (“IP”) in AgTech-related agreements.
Right to Repair: As the agricultural industry continues to innovate and incorporate new and advanced technologies, AgTech companies have sought ways to protect their underlying IP in the products they manufacture and sell. One common method of doing this is the incorporation of technological protection measures (“TPM”) into products. TPM refers to any technology, device, or component that controls and/or restricts the use of, and access to, digital content.
Generally, the circumvention of TPMs is prohibited3. A significant implication of this is that farmers are often required to have software, and other components, repaired by the original manufacturer.
Cambridge MP Bryan May has voiced concern that manufacturers have been taking advantage of the TPM circumvention restrictions by using software to prevent consumers from being able to fix the products they purchase.4
In an effort to allow consumers the right to repair the products they purchase without being required to go to the original manufacturer, B.C. Liberal MP Wilson Miao introduced Bill C-244. If enacted, Bill C-2445 would amend the Copyright Act to allow the circumvention of a TPM for the sole purpose of maintaining, repairing, or diagnosing a product, subject to specific requirements.
However, Bill C-244 has not found universal support. For example, John Schmeiser, president of the North American Equipment Dealers Association – Canada, has been a vocal critic of Bill C-244. Mr. Schmeiser has told members of Parliament that the Bill could open the door to widespread altering of emissions systems, create safety hazards, and create cybersecurity risks.
Data Privacy and Security: Modern farm equipment has the capability to collect a significant amount of data from farmers and their farming operations. AgTech companies have legislative obligations that they must abide by in the collection, storage, and use, of that data.
The general data privacy rules in most provinces in Canada with respect to private-sector organizations that collect, use, and disclose personal information in the course of for-profit, commercial activities are set out under the Personal Information Protection and Electronic Documents Act (Canada) (“PIPEDA”).
Businesses subject to PIPEDA must abide by the ten fair information principles:
Accountability
Identifying Purposes
Consent
Limiting Collection
Limiting Use, Disclosure, and Retention
Accuracy
Safeguards
Openness
Individual Access
Challenging Compliance
The Canadian Government has introduced Bill C-27, which, if enacted, would replace PIPEDA and modernize privacy law in Canada6. After being read in Parliament for a second time, Bill C-27 was referred to the Standing Committee on Industry and Technology for consideration in April of 2023.
Addressing IP in AgTech Agreements: AgTech success depends on IP being properly protected. A vital part of this is to ensure that contracts properly and adequately address IP.
Important IP-related considerations for AgTech agreements include whether:
IP will be generated under the agreement and, if so, who will own the generated IP;
employees or employers will own IP generated by employees;
contractors or companies hiring contractors will own IP generated by contractors; any information should be kept confidential;
any background IP (being IP that a party owns prior to collaborating with another party) will be used under the contract and whether that IP will remain the sole property of its original owner;
the parties have the right to exploit IP generated under the agreement (so-called “foreground IP”);
there should be any restrictions on the use of IP;
IP will be jointly or solely held, and
any rights or limitations should apply to the licensing of IP.
Conclusions: Undoubtedly, the growth in the AgTech industry will come with significant legal and policy changes. As Saskatchewan’s premier law firm for agriculture, innovation, and technology matters, McKercher LLP has a robust team of lawyers exclusively dedicated to these areas. We understand the law, we understand the industry, and we exist to empower those who dare to change the world.
McKercher LLP
1Saskatchewan.ca, Agriculture and Agri-Value, online: <https://www.saskatchewan.ca/business/investment-and-economic-development/key-economic-sectors/agriculture-and-agri-value>. 2Innovation Saskatchewan, Annual Report for 2019-20, online: <https://innovationsask.ca/pub/documents/publications/IS_Annual-Report%202019-20-%20WEB.pdf>. 3 Copyright Act (Canada), s. 41.1. 4CBC News, Farm machinery included in right-to-repair plan announced in federal budget (Apr 07, 2023), online: <https://www.cbc.ca/news/canada/kitchener-waterloo/canada-right-to-repair-includes-farm-equipment-1.6803707>. 5The text of Bill C-244 can be found at the following webpage: https://www.parl.ca/legisinfo/en/bill/44-1/c-244. 6The text of Bill C-27 can be found at the following webpage: https://www.parl.ca/legisinfo/en/bill/44-1/c-27.