THE LEGAL PROTECTION OF DATABASES IN EUROPE

What’s the Problem?

Even before we all set foot on the „information superhighway‟ in the early 1990s, the European Commission had
recognised the importance of protecting investment made by database producers. This led to the 1996 Directive
on the Legal Protection of Databases (“the Directive”) http://europa.eu.int/ISPO/infosoc/legreg/docs/969ec.html.
The Directive was implemented into UK law in 1998 http://www.opsi.gov.uk/si/si1997/1973032.html.
The idea underlying the Directive seemed clear enough, at least conceptually. It introduced a „two tier‟ level of
protection for databases. Copyright protects the intellectual creativity in database structure. The Directive then
introduced an entirely new right – the database right (also known as the „sui generis‟ right) - to protect the
investment made in database production. To be precise, it applies to investment in obtaining, verifying or
presenting the contents of a database.
Now fast forward nearly twenty years to the judgments of the European Court of Justice (“ECJ”) in the William
Hill and Fixtures Marketing cases in November 2004 http://curia.eu.int/jurisp/cgi-
bin/gettext.pl?lang=en&num=79958890C19020203&doc=T&ouvert=T&seance=ARRET&where=(). As we will
see, the ECJ judgments have created a significant gap in database protection and left information lawyers
scratching their heads about what exactly is protected by the database right. The ECJ‟s judgments were followed
by the UK Court of Appeal in July this year when it finally decided the case brought by William Hill against the
British Horseracing Board (“BHB”) for infringement of their database right in their database
http://www.bailii.org/ew/cases/EWCA/Civ/2005/863.html.
Here’s the problem
The ECJ decided that database materials which the database maker creates, rather than obtains from a third
party source, are not protected. So all of the investment made by the BHB (circa £4m p.a.) and by the Football
Association in creating their official fixture lists is not protected.
At the time when the Directive was going through its various stages, everyone thought that as long as
substantial investment was made in putting the database and its contents together, the maker would be
protected against its unauthorised use. However, we now find that obtaining data is protected but creating
database content is not. Of course, few databases consist wholly of data obtained from third parties. Publishers
and information providers need to add value to their database products by creating original data. Is this now
unprotected? If it is, then the licensing income generated by database producers may have lost its legal
underpinning.
So here we are, nearly ten years after the introduction of database right, with a very large question mark about
protection for added value data. In the remainder of this article, we will look at what the ECJ decided, the impact
of these legal decisions and what publishers should do to protect their investment in this changed legal
landscape. But first, we will start with a very quick refresher about the Directive.
A brief refresher
Before the Directive was introduced, there was a mixed bag of legal protection for databases. In the UK and
Netherlands, databases were protected by literary copyright as tables or compilations. But in other European
Union countries, such as Germany, they were often unprotected because they did not meet the higher threshold
of author‟s intellectual creativity that those countries required for copyright protection.
What is a database?
The Directive gave a very wide definition of „databases‟. A „database‟ is “a collection of independent works, data
or other materials arranged in a systematic or methodical way and individually accessible by electronic or other
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means.” So web sites, online databases, collections on CD-ROMs and print directories are all capable of being
databases. However, just because they are capable of falling within the definition does not mean that they
qualify for protection.
Copyright and database right
Under the Directive, copyright protection applies to databases “which, by reason of the selection or arrangement
of their contents, constitute the author‟s own intellectual creation.” However, merely extracting data from a
database is unlikely to infringe copyright. So in the recent ECJ cases, the issue of database copyright was not
even considered.
In contrast, database right is a producer‟s right. It applies where there is a substantial investment – in time,
money and human resources – in obtaining, verifying or presenting the contents of a database. It is interesting
to note that there is no reference to „making‟ or „creating‟ database contents. This reflects a „pre-Internet‟ vision
of a database as a passive electronic storehouse of pre-existing data and of the database producer as essentially
a mere gatherer of that data.
If the maker of the database has made the required substantial investment, then any unauthorised copying or
distribution – „extraction‟ or „re-utilisation‟ in the Directive‟s language - of the whole or a substantial part of that
database will infringe the right. The right can be infringed if „small but regular helpings‟ are taken. So the
Directive provides that repeated and systematic extraction or re-use of small ("insubstantial") parts of a
database's contents can, cumulatively, amount to infringement of the sui generis right where this conflicts with
the maker's legitimate interests.
The database right lasts for fifteen years but is renewable if there are substantial changes to the database in
question during the fifteen year period. The first owner of the right is the person who is the „maker‟ of the
database. However, only „makers‟ who are nationals or habitual residents in a Member State may qualify for
protection. So a US producer of a database cannot qualify for database right protection.
Separate protection for copyright works in a database
It is worth remembering that copyright and database right protection under the Directive are quite separate from
any copyright protection in any materials contained in the database. For example, the musical works in an online
music service and research articles within an online journal will have separate copyright protection, as well as
potentially benefiting from any copyright and database right in the database in which they are stored.
What the ECJ decided
The ECJ decisions are not good news for database producers.
The ECJ ruled on four cases referred to it by EU national courts. Three cases involved Fixtures Marketing which,
on behalf of the UK football leagues, licenses the fixture lists outside the UK. These cases concerned the use of
football fixtures' data for pools betting in Finland, Sweden and Greece. The fourth was a referral by the UK
Courts of the BHB v. William Hill case. This involved the use of information from the BHB database on the William
Hill internet site for online betting. In all cases, the database owner alleged infringement of its sui generis right in
its database by the unauthorised use of its data.
The common factor in all four cases was the ECJ's ruling that the “investment in the obtaining, verification or
presentation of the contents” of the database refers to “the resources used to seek out existing independent
materials and collect them into the database and not to the resources used for the creation of such independent
materials”.
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Put simply, the ECJ decided that if a database is a by-product of the database maker's principal activity and that
the investment goes into that activity and not into the gathering together of pre-existing materials, then no sui
generis protection is available! So in BHB's case, the ECJ decided that its investment went into the creation of the
lists for racing, checking the identity of the person making the entry for the race and other information about the
race and its entrants. All of this was part of its principal activity of organising horseracing and took place before
the database was created. A similar line of reasoning appears in the three cases involving Fixtures Marketing.
There is further bad news for database owners in the BHB v. William Hill judgment. BHB argued that although
only tiny amounts of the data in the BHB database were used each day by William Hill, it cumulatively amounted
to infringement (see comments above regarding „small but regular helpings‟). But the ECJ decided on the facts
that there was no possibility that, cumulatively, William Hill could reconstitute and make available to the public
the whole or a substantial part of the contents of the BHB database. William Hill did not therefore prejudice
BHB's investment in the creation of the database.
The impact of these decisions
For certain types of databases, there can be little doubt that the ECJ decisions significantly undermine the scope
of protection. Those are databases where the data is unique to the database producer and where the database
producer is the sole source – like fixture lists.
When the Court of Appeal considered the ECJ‟s decision in the BHB v. William Hill case, it said that in contrast to
a “mere database of existing materials…if one asks whether the BHB published database is one consisting of
existing independent materials, the answer is no. The database contains unique information – the official list of
riders and runners.”
So at one end of the spectrum, databases consisting of this type of unique information are unlikely to qualify for
database protection if Member States‟ courts follow the ECJ decisions in a similar way to the UK Court of Appeal.
At the other end of the „protection spectrum‟, databases which consist entirely or substantially of data obtained
from third parties will be protected by database right.
Third party and created data
The really difficult area is databases consisting of a mix of third party data and data which is created by the
database producer – the „added value‟ data. For these „hybrid‟ databases, the position may not be quite as bad as
it seems. In the BHB v. William Hill case, the database on which the ECJ focused was the „official list‟ of runners
and riders. It was therefore a database which consisted wholly of material which was created and compiled by
BHB.
However, if a database consists of a mixture of third party data and created data – it should be much easier for
the database producer to show that the database qualifies for database right protection. This is because the
database will have consisted of investment in obtaining third party data as well as investment in creating data. As
long as there has been „substantial‟ investment in that obtained data, including any investment in verifying the
accuracy of the data and/or in its presentation within the database, the qualification criteria will be met.
So it follows that if a mixture of „obtained‟ and „created‟ data is taken without authority, the database owner can
argue that the database right has been infringed because, at the very least, some of its investment in the
database – the „obtained‟ data – is protected under the database right.
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Of course, the real value in the database may lie in the created data. So what is the legal position if only the
created data is taken? This is the most difficult scenario on which to express an opinion following the ECJ cases.
This is apparent from the following statement in the ECJ judgment in BHB v. William Hill. “Consequently…if the
materials extracted and re-utilised by William Hill did not require BHB and Others to put in investment
independent of the resources required for their creation, it must be held that those materials do not represent a
substantial part, in qualitative terms, of the BHB database”.
As a result, it seems that there is a real risk to database producers that they have no protection where
substantial parts of the content of a database are taken which consist only of created data.
Even here, there is a little chink of light for database producers, at least in the UK. Before the Directive changed
UK copyright law, copyright protected the contents of tables and compilations as copyright literary works. UK law
still protects copyright in tables and compilations, other than databases. So a producer of a database may be
able to argue under UK law that if its database is not protected as a „database‟ because of the ECJ judgments,
old style UK copyright law still protects its product as a table or compilation. But this argument really is one for
the lawyers!
What publishers should do
If a publisher produces databases which include created data, then it is clearly in the danger zone. Here are a
few concluding thoughts about what database producers should do. Please bear in mind that none of these
represent formal legal advice!
1. „One man‟s created data is another man‟s obtained data‟. It may be possible by appropriate
arrangements within a corporate group to separate out the creation of the data from the obtaining
of that data. Any such internal re-structuring needs to be undertaken with care as it could have tax,
employment law and other implications!
2. Make sure that your database products contain a copyright and database right notice.
3. Ensure that you have the necessary contracts in place to enable you to demonstrate your chain of
title to your database, especially where any part of your database production is outsourced.
4. „Business as usual‟ should be the principle applied to all database contracts with your distributors
and users. Ensure that the scope of data use is clearly defined and written in plain English so that
no-one can hide behind legal jargon. Think about the use of „no challenge‟ clauses in which rights of
termination may arise in the event that the database producer‟s rights are challenged.
5. The Database Directive is due to be reviewed by the European Commission. Publishers should
actively support the lobbying activities of their trade associations.
6. Watch this space! The law will continue to develop in this area.
Laurence Kaye
Laurence Kaye Solicitors
© Laurence Kaye 2005
T: 01923 352 117
E: laurie@laurencekaye.com
www.laurencekaye.com
http://laurencekaye.typepad.com/
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This article is not intended to be exhaustive and it does not constitute or substitute legal advice,
which should be sought on a case by case basis.
Please feel free to copy or make available this article without modification in print or electronic form for non-
commercial purposes. If you do so, please include this disclaimer and copyright wording with attribution. If you
want to re-publish or make the whole or part of this article available in a commercial service or publication,
please contact the author at laurie@laurencekaye.com.