Database right

Introduction

The Council of the European Community adopted the directive on the legal protection of databases (Directive 96/9) in 1996. It seeks to harmonise the laws of the member states relating to copyright in databases, and in particular the degree of originality required of them: it also introduces a new sui generis right for database operators. The directive was implemented in the UK from 1 January 1998 by the Copyright and Rights in Databases Regulations 1997.1

The Regulations insert a new definition of database in the 1988 Act. The term means:

... A collection of independent works, data or other materials which –

(a) are arranged in a systematic or methodical way, and

(b) are individually accessible by electronic or other means.

Databases are no longer treated for copyright purposes as a type of compilation, but remain a type of literary work. (This raises the intriguing possibility that there are databases that are not compilations, and compilations that are not databases.)

Copyright

Databases only receive copyright protection if they are their author’s own intellectual creation. This is a much higher standards (taken from Dutch and German law) than previously applied in the UK: non-database compilations are still subject to the lesser test, so should more easily obtain protection. A collection of data not arranged in a systematic or methodical way might fit through this loophole.

New section 50D of the Act permits certain acts that would otherwise be restricted by copyright in the database: ‘anything which is necessary for the purposes of access to and use of the contents of the database ...’. Section 296B makes void any contractual term that purports to prohibit or restrict a permitted act.

Database right – sui generis protection

The effect of the increased standard of originality is that databases will be hard to protect by copyright. The new database right (as the EC’s sui generis right has become in the UK legislation) will however give database operators valuable new rights. The definition of a database for these purposes is the same as in the copyright provisions, but there is no originality requirement: the mere fact that there has been a substantial investment in the database is sufficient.

The new right enables the database operator to control two activities:

  • Unauthorised extraction of material from the database, and

  • Unauthorised reutilisation of material from the database.

An early indication of what protection database operators are given was provided by the dispute between Countrywide, the estate agents, and the property portal Homemovers. Countrywide took action against Homemovers for copyright and database right infringement, alleging that Homemovers had used information collated by Countrywide on their Web site, www.rightmove.co.uk. Homemovers gave extensive undertakings not in the future to use any property particulars created by Countrywide on their (Homemovers’) Web site and agreed not to create any hypertext links between the Homemovers site and Countrywide’s. The highly favourable terms of the settlement indicate that the database regulations give “extensive rights to businesses which invest heavily in gathering and collating information, even where that information has no independent artistic or literary value or merit. Internet portals which offer a one-stop shop to their customers by aggregating third party information without authorisation may find themselves being sued by the person who invested the time, money and resources in creating information.”2

In British Horseracing Board v William Hill Organisation ([2001] EWHC 517 (Patents)) Laddie J had the first opportunity to consider the EC directive on legal protection of databases (Directive 96/9/EC). He found that it seemed to work much as the legal profession had expected. The Court of Appeal ([2001] EWCA Civ 1268) seemed to agree with him, but thought it necessary to obtain confirmation from the Court of Justice of the European Communities in Luxembourg. On 9 November, the Community Court handed down its judgment (along with judgments in two further cases, involving football fixtures), holding (in effect) that Laddie J was miles out.

What is a database?

The Community Court held that "database" means any collection of works, data or other materials, separable from one another without the value of their contents being affected, which includes a method or system of some sort for the retrieval of each of its constituent parts. This does more than put a gloss on the wording of the directive: rather, it adds a couple of new elements altogether. In Case C-444/02, Fixtures Marketing Ltd v Organismos prognostikon agonon podosfairou AE (OPAP), the Court held:

The term ‘database’ as defined in Article 1(2) of Directive 96/9/EC of the European Parliament and of the Council of 11 March 1996 on the legal protection of databases refers to any collection of works, data or other materials, separable from one another without the value of their contents being affected, including a method or system of some sort for the retrieval of each of its constituent materials.
A fixture list for a football league such as that at issue in the case in the main proceedings constitutes a database within the meaning of Article 1(2) of Directive 96/9.

Substantial investment

The directive does not protect all databases, of course: there is a threshold to be crossed, as in copyright law a work must be original. In the database directive there has to be a substantial investment in the obtaining, verification or presentation of the contents of the database, a test that seemed pretty undemanding. That, it now seems, is where we went wrong.

The Community Court tells us that "investment" in this context refers to the resources used to seek out materials and collect them in the database. It does not mean creating the materials that make up the database. That proposition is still fairly uncontroversial, but in the football fixtures and horseracing cases (Cases C-46/02, C-203/02, C-338/02 and C-444/02, Fixtures Marketing v Oy Veikkaus Ab, British Horseracing Board v William Hill Organisation Ltd, Fixtures Marketing Ltd v Svenska Spel AB and Fixtures Marketing v Organismos prognostikon agonon podosfairou respectively) the database operator also created the stuff with which the database was populated. Identifying the product of the investment was therefore less easy than it might have been, and harder still would be demonstrating to the court that there was a substantial investment in obtaining, verifying and presenting the materials independent of the resources employed in creating the materials.

The expression ‘investment in … the obtaining … of the contents’ of a database in Article 7(1) of Directive 96/9 must be understood to refer to the resources used to seek out existing independent materials and collect them in the database. It does not cover the resources used for the creation of materials which make up the contents of a database. In the context of drawing up a fixture list for the purpose of organising football league fixtures, therefore, it does not cover the resources used to establish the dates, times and the team pairings for the various matches in the league. (Case C-444/02)

The catch is that finding and collecting the data required no particular effort on the part of the football leagues or the BHB. Those activities were, in the football cases, part and parcel of the process of creating the data in the first place. Who organises the fixtures? The same people as are now claiming to have invested in putting the information into a database. But the same exercise cannot, in the court's view, be protected as a database: the database is merely the receptacle for the information created in the course of the league's more fundamental activity.

Moreover, if the league created the fixture list in the first place, no effort needs to go into verifying it, neither is there any substantial investment in the presentation of the information, which again is little more than a function of the original activity of determining who will play whom, when and where.

In the horseracing case, things were different. There was no doubt that there had been a substantial investment in obtaining and verifying the information, and in presenting it. The information was generated by others - racecourse owners, horse owners, and other participants in the industry - and the BHB clearly does expend effort in assembling all this information in a database, checking it and presenting it to users. The question here is whether William Hill's use of the material in the database was an infringement.

Even though there was enough investment to ensure that the database was protected, that investment had to be directed to the right result. The Court held that when the BHB decided the date, time, place and name of a race and the horses running in it, it was creating content for the database rather than investing in obtaining, verifying or presenting the information. When details of an entry (entrant, horse, owner, jockey) are verified at the time the entry is made, that too goes to creating the data rather than verifying anything in the database. As the sum of these materials was what William Hill were using, they were not infringing rights in the database.

The Community Court's view of the way in which the BHB database was put together sounds rather different from the view of the English court. Matters of fact are for the trial court, not the Community Court, a matter that caused some controversy in Arsenal v Reid ([2001] EWHC 440 (Ch)) when Laddie J took the view that he could disregard fact-specific parts of the court’s opinion, which then accorded with his own decision. The Court of Appeal ([2003] EWCA Civ 696) did not see it the same way then, and it will be interesting to see how it reacts now that the Community Court has done something similar on a reference made by it rather than by the High Court – and, perhaps, with Jacob LJ, elevated since the Arsenal case, giving judgment.

oOo

Infringement

In British Horseracing Board and others v William Hill Organisation Ltd3 Laddie J held that the defendant had infringed the claimants' rights in data made available to them for the benefit of their customers.

BHB conducts a major data processing operation. In 2000, there were 1029 race programmes and fixtures in the UK, at 59 racecourses, on 327 days of the year. At any one time there are some 15,000 racehorses in training in the UK, 9000 active owners and 1000 trainers. Some 7,800 races are run each year, and in 2000 there were 175,000 entries for them, although in the nature of things horses would be withdrawn or their entries rejected from oversubscribed races so that the number of runners declared was in fact 80,000. Not surprisingly, the number of riders declared was the same.

All this information is maintained in the BHB's database, which is constantly being updated with the latest information. The data need to be checked and verified, and in addition to the current information it contains a huge amount of historical information. An estimated 800,000 new records or changes to records are made each year.

The information collected and processed by the BHB is published in a variety of ways. It is also made available to interested parties, including bookmakers. It reaches them via an organisation called Racing Pages Ltd, in particular in the form of a data feed referred to as the declarations feed (normally on the day before a race). Another company, Satellite Information Services Ltd., is permitted to feed certain data for certain purposes to its own subscribers. Among these is William Hill, which operates many licensed betting offices and telephone betting services. SIS provides live coverage of horse (and greyhound) racing and additional data are also provided on screens at the betting offices: the same information is made available there in the betting office display edition of the Racing Post, along with a newsstand edition of the same publication which is made available in each betting office.

More recently, a third way of betting was introduced by William Hill, on the Internet. Since February 2000 this has involved the use of the SIS raw data feed to provide data for the web site: BHB claimed that William Hill's use of the data in this way was not licensed, and constituted a breach of their database right.

Database right protects collections of independent works, data or other materials which are arranged in a systematic or methodical way and individually accessible by electronic or other means. The right subsists if there has been a substantial investment in either obtaining, verifying or presenting the contents, and gives the owner of the database the ability to prevent the extraction and/or reutilisation of the whole or a substantial part of the contents of the database. BHB claimed that both these things were happening.

William Hill acknowledged that BHB owned database right in the database, but argued firstly that BHB had failed to prove that what it was using was derived from the BHB database and not information provided by the Racecourse Association direct to SIS. The judge did not allow this point to detain him for long, deciding that it was virtually certain that the information was in fact derived from the BHB database.

Then the defendant argued that they had not used a part of the database (within the meaning of the legislation), only data from it: in their hands, they contended, it had lost its “databaseness” and was pure information that would not merit protection. The judge rejected this argument: the requirement for a database to have a certain form to be protected was independent of the provisions about the infringement of rights in it.

The defendant also argued that if they had used part of the database it was not a substantial part, something that had to be assessed qualitatively and quantitatively. Looked at quantitatively, it certainly was not a large part of the huge collection of data: but qualitatively, it was the most recent information, the data of most use to the defendant, and on this basis the judge concluded that a substantial part was being used.

Finally, the argument that the data were neither extracted nor reutilised had to be addressed. The defendant argued that “extraction” must mean first extraction, that is, taking away so that the original does not remain in the database from which it has been extracted: and that the information had already been extracted from the BHB database by a third party and supplied to SIS, and subsequent acts by the defendant could not amount to an extraction from the database of material that had already been taken out of it. Nor could what the defendants were doing amount to reutilisation of material from the BHB database, as it had already been reutilised by SIS in transmitting it to the defendant and it was therefore no longer the BHB database that was being reused, but merely data from it.

However, the information was still in the BHB database, so on this definition it had not been extracted at all, whereas plainly something had happened. The EC directive (to which the judge referred throughout the judgment in preference to the implementing regulations) did not distinguish direct and indirect extraction, nor did it contain a requirement for the data to have been removed from the first database in the course of being extracted. In fact it speaks merely of transfer to another medium.

The argument that re-utilisation meant first re-utilisation also cut little ice. That interpretation would produce bizarre results, the judge said: there was nothing in the directive to suggest that such a limited interpretation is appropriate, and indeed to take the approach suggested by the defendants would deprive the whole database right of virtually all effect.

In addition to the taking of substantial part of the database, Mr Justice Laddie considered that there was a repeated and systematic use of insubstantial parts of the database, so an infringement was committed under Art 7(5) of the directive as under 7(1).

It has not taken the courts long (by the standards of litigation) to find an opportunity to pronounce on the database directive, and (as usual) what Mr Justice Laddie had to say was extremely helpful. The language of the directive may not have been as transparently clear as English practitioners, accustomed to different standards of interpretation and drafting from those current on the continent, might wish, but this judgment (while no doubt leaving questions still to be addressed) provides a commonsense view of what the directive has given to database operators: and what they have looks like a useful and appropriate form of protection.

oOo

British Horseracing Board Ltd & Ors v William Hill Organization Ltd [2001] EWCA Civ 1268 (31 July 2001) (View without highlighting) ((2001) 24(9) IPD 24059, [2001] EWCA Civ 1268, [2002] ECC 24, [2002] ECDR 4, [2002] Masons CLR 1;

British Horseracing Board Ltd & Ors v William Hill Organization Ltd [2005] EWCA Civ 863 (13 July 2005) (View without highlighting)

Then:

Attheraces Ltd & Anor v The British Horseracing Board Ltd & Anor Rev 2 [2007] EWCA Civ 38 (02 February 2007) (View without highlighting)

Attheraces Ltd & Anor v The British Horseracing Board Ltd & Anor [2005] EWHC 1553 (Ch) (15 July 2005) (View without highlighting):

The European Court of Justice gave a preliminary ruling on 9 November 2004 on a reference made by the Court of Appeal on 31 July 2001 in the case of British Horseracing Board & Ors (Approximation of laws) [2004] EUECJ C-203/02 (09 November 2004) on the interpretation of Articles 7 and 10(3) of the Database Directive. The effect of the ruling was that the use of pre-race data by the William Hill Organisation Ltd did not infringe BHB's database rights. It was held that BHB's investment in pre-race data was in materials which made up the content of its database and the verification of such creation. Its investment was not in seeking out and collecting independent materials in a database. The pre-race data was not covered by the Database Directive. This meant that BHB was not in a position to proceed with its plans to fund racing, in place of the Levy, by the sale of BHB's Database relating to pre-race data. (Following the report of an independent review group, the Government agreed that the Levy should remain in place until at least March 2009 in order to give more time to explore alternative ways of funding British racing).

BHB's attempts to find other sources and methods of funding by means of the contractual exploitation of the pre-race data led to the allegations of abuse of dominant position against BHB discussed later in this judgment.

Other database cases in CJEC:

(View without highlighting) [100%]
([2004] ECR I-10415, [2004] EUECJ C-203/02, [2005] 1 CMLR 15; From Court of Justice of the European Communities (including Court of First Instance Decisions); 64 KB)

1SI no 3032.

2David Rose of SJ Berwin & Co, solicitors for Countrywide, quoted on his firm’s web site. The case, proceedings in which were issued in June 2000, was due to go to trial on 10 October 2000

3[2001] EWHC 517 (Patents).

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