Data Rights: The Underlying Logic and Legal Realization of Constructing a System for the Separation of Three Rights in Data
Data Rightsizing：
Constructing the Data Triple Entitlement System's
Underlying Logic and Legal Realization
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Part Ⅰ
Overview of the introduction and development of data rights
With the rapid development of the digital economy, data has become an important resource for promoting economic growth and social progress. However, the issue of data authentication has been a difficult problem in theory and practice, and its necessity before conducting transactions is self-evident. Data authentication is not only related to the protection of personal privacy, but also affects the circulation, utilization and value creation of data. In the era of digital economy, clarifying the ownership, utilization and other related rights of data is of great significance in promoting data sharing, preventing data abuse and safeguarding data security. The purpose of this paper is to explain the importance of data rights and to discuss the underlying logic, jurisprudential reflection and legal realization of the three-rights system for data.
Simply put, data entitlement is the process of determining where ownership, use and control of data belongs. In this process, there is a need to balance the needs of individual privacy protection, business interests of enterprises and public interests of society, involving numerous complex legal, technical and ethical issues.
Part Ⅱ
Overview of the introduction and development of data rights
In October 2019, the Fourth Plenary Session of the 19th CPC Central Committee listed data as a factor of production for the first time, and in March 2020, the CPC Central Committee and the State Council issued the “Opinions on Constructing a More Improved Institutional Mechanism for Factor Market Allocation”, which explicitly listed data as one of the five major factors of production, along with land, labor, capital, and technology, and put forward the policy objective of “perfecting property rights according to the nature of data”. In December 2022, the CPC Central Committee and the State Council issued the “Twenty Articles on Data”, which further proposed to accelerate the construction of a data foundation system and explore the establishment of a structured system of data property rights. These two important documents have laid down the policy direction for the construction of data rights and its property rights system.
Article 20 of the data points out that the separation of data property rights includes the establishment of a property rights operation mechanism that separates the right to hold data resources, the right to use data processing, and the right to operate data products.This partition is highly compatible with the law of value creation of data from resources to elements to products.
Although there is a mapping relationship between data property rights and data property rights, the artificial exclusivity constructed by property rights will increase the cost of data circulation and utilization and have an impact on the realization of data value. Therefore, it is necessary to maintain the necessary structural tension between the two through rational institutional design.
Variability in the form of data objects
As a new type of property right object, data presents obvious derivative and mutation characteristics in its whole life cycle. The value creation process of data includes data collection, storage, analysis, use and other links, which together constitute the data value chain. Data resources can only release their economic value through massive aggregation, while data elements need to meet the conditions of reality, controllability and economy. Ultimately, data products achieve a qualitative leap in data value through massive inputs of labor, technology and capital.
Property rights in data versus property rights in data
From the perspective of traditional property rights theory, the core objective of clear property rights is to reduce transaction costs and optimize resource allocation. However, data is not a scarce resource, and the property right to data is only an artificially created right of exclusion. This leads to the fact that the circulation and utilization of data not only require the payment of corresponding consideration, but also have to satisfy other legal or intentional conditions, thus hindering the effective allocation of data. In order to achieve harmonization between data property rights and data property rights, it is necessary to balance the relationship between the two through reasonable institutional design.
Part Ⅲ
Legal realization of the data triple-rights system
01 Legal reflections: the double dilemma of the dualistic division of rights
In established research, data rights segmentation is mainly based on subject binary division, forming a model of rights segmentation between data sources and processors, and between data processors and other users.However, this division faces the problems of uneven allocation of rights and fragmentation of the exercise of rights.For example, in the division of rights between data sources and processors, it is often difficult for data sources to effectively exercise their property interests, while overall rights enforcement inhibits the release of data value. In addition, the division of rights between data processors and users also suffers from the limitation of fragmented exercise of rights.
Uneven allocation of interests：
There is a basic consensus that the construction of a data property rights system requires a division of rights between the data source and the processor. Its representative theoretical propositions include: the theory of the separation of human and financial resources and the theory of the separation of “ownership + usufructuary rights”.
The theory of “separation of personal and property” is developed from the theory of “two-pronged reinforcement and three-party balance”. This theory is based on the demarcation between personal data and non-personal data, and then clarifies the nature of the data and the value demands of the subjects involved, and then allocates the rights and interests of personal data.
The dichotomy of “ownership + usufruct” holds that, in the view of the whole life cycle of data, the data originates from the network access behavior of users, and empowering users should be the starting point of the data rights allocation; meanwhile, the data processing enterprises have paid a lot of labor and capital investment, and granting them relatively stable property rights is conducive to the optimal allocation of data resources and the formation of incentive mechanisms.
Fragmentation of the exercise of rights：
Another manifestation of the binary division of rights is the division of rights between data processors and users. Usually, data processors are also called “data producers”, so the dual rights structure constructed on the basis of the data producer theory is excessively biased in favor of data processing enterprises, which not only ignores the contribution of data sources, but also disregards the basic fact that “the object is the key element in the allocation of rights”. The basic fact that “the object is the key element in the allocation of rights” is also disregarded.
Although balancing the relationship between data sources and data processors is an important element of the idea of the division of rights, it is also the first issue to be addressed in the construction of a data property rights regime. However, from the perspective of data sources, the form of data involved refers specifically to data resources, not data elements or data products. The stage of data resources is not the initial stage of the allocation of property rights, and the decentralization of data resources not only lacks theoretical explanatory power, but also is not conducive to the open sharing and flow of data, and deviates from the practical laws of the development of the digital economy.
02 Legal realization: object-oriented system of separation of powers
In order to solve the above problems, the “Twenty Articles on Data” puts forward a systematic framework for the “separation of the three rights” of the right to hold data resources, the right to use data processing and the right to operate data products. Specifically:
Right to hold data resources：
Creation of rights to hold data resources：At the stage of data resources, an open, inclusive and developmental institutional mechanism should be constructed rather than a relatively closed system of property rights. The right to hold data resources should be understood as a declaratory and weak right, which contains the legal recognition of the factual state that data resources can bring property benefits to the source. The allocation of property interests in data resources is a practical challenge that constrains the institutional construction of the right to hold data resources.
Classification of data resources：There are currently two models, the “dichotomy” and the “trichotomy”. The “dichotomy” categorizes data into personal information data and non-personal information data according to whether or not the data carries personal information, with the latter including public data and corporate data. The “trichotomy” approach categorizes data into personal data, enterprise data, and public data. The adoption of the “dichotomy” at the data resource stage facilitates the application of the theory of public goods as an important basis for appropriately assigning “rights in rem” to the attributes of public resources.
Specific realization mechanisms：For personal information data, the allocation of negative power to protect its property interests is a remedial program. For non-personal information data, public data and enterprise data should be further demarcated, and different supply systems should be set up according to the nature of the data. The national data resource management department should establish a unified data resource database, implement classification and hierarchical management, and then establish and allocate the right to hold data resources by constructing a data resource registration system.
Data processing access：
Building a sharing mechanism based on property rights. The right to use data processing is the key to data factorization, in which data circulation is a necessary precondition for data processing. Consensual data circulation is realized based on data transactions, while non-consensual data circulation is usually realized by technical means such as data crawling. In recent years, some judicial cases have adopted a limited regulatory attitude towards data crawling, signaling a return from the protection of property rights, which gives strong exclusionary effect to data, to the value of taking into account the circulation and utilization of data.
Right to operate data products：
Establishment of a limited exclusionary rights model. The right to operate data products should be granted to developers, but it is not appropriate to create high-intensity absolute exclusive rights for them, so as to balance the protection of data rights and interests and the utilization of data circulation.
The right to operate data products involves the formation of derivative products resulting from the reprocessing of data as a factor of production. In the development of data products, developers refine and analyze the data through algorithms and computing power to form commodities with market value. In judicial practice, as shown in the case of VW Dianping v. Baidu, the developer enjoys the right to control and profit from its data products. According to the theory of labor property rights, the development of data products requires a lot of labor and technology, and should be protected accordingly to stimulate innovation. Unlike raw data, the production of data products depends on technology and has a stable scope of protection. The academic consensus is that the right to operate data products should be vested in the developer, following the principle of “whoever produces, whoever benefits”.
Part Ⅳ
Conclusion
Data rights are the foundation for the development of the digital economy, and the system of three rights to data provides new ideas for solving the difficulties of data rights. The International Institute for Advanced Data Management (IIADM) will continue to monitor the latest progress in this area and provide intellectual support and technical advice to promote data management and application. We look forward to more partners joining this exciting journey to create a more prosperous and harmonious future.
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The International Institute for Advanced Data Management Study Limited —— abbreviated as IIADMS, is a non-profit, supplier-independent institution initiated by Mr. Hu Benli, the current chairman of DAMA China, and others. IIADMS is committed to advancing research in data and data management-related fields and continuously exploring new knowledge and best practices related to data. It strives to become a world-class platform for the exchange of knowledge on data management theory and practice. IIADMS is willing to cooperate with famous forums at home and abroad in various forms to discuss traditional and frontier topics related to data management, sharing the research results of IIADMS with these forums.
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