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Legal protection for databases - case report

This guide is based on UK law. It was last updated in September 2008. The database right, which was introduced by the EC Council Directive on the legal protection of databases (the "Database...

This guide is based on UK law. It was last updated in September 2008.

The database right, which was introduced by the EC Council Directive on the legal protection of databases (the "Database Directive"), was severely restricted in scope in November 2004 when the European Court of Justice (ECJ) ruled on the dispute between William Hill and the British Horseracing Board, and on the disputes between Fixtures Marketing Limited and companies in Greece, Finland and Sweden, concerning the use of horseracing data and football fixture lists respectively.

The rulings, to which there is no appeal, could leave both the football and horseracing industries out of pocket, according to commentators, as it may permit pools companies and gaming sites to re publish fixture lists and racing details without having to pay licence fees for the privilege.

Recap on database right

The Database Directive was implemented into UK law by the Copyright and Rights in Databases Regulations 1997 ("DRegs").

  • The DRegs created an entirely new right (called 'database right') in respect of a database where there has been 'substantial investment in obtaining, verifying or presenting the contents of the database'.
  • The definition of 'database' is the same for copyright and database right – a collection of independent works or data, which are arranged in a systematic or methodical way and which are individually accessible.
  • The maker of the database (i.e. the person who invests) is the owner of the database right. Where the database is made by an employee in the course of employment the employer is regarded as the maker subject to any agreement to the contrary.
  • A person infringes database right in a database if they, without the consent of the owner, extract or re-utilise all or a substantial part of the database.
  • The repeated and systematic extraction or re-utilisation of insubstantial amounts may also infringe if taken together they are substantial.
  • The term of database protection is 15 years from the end of the year in which the database was made (or first made available to the public).

Facts of the cases

The British Horseracing Board's lawsuit

The British Horseracing Board (BHB), the governing authority for the British horse racing industry, is responsible for the compilation of data related to horseracing.

The case involved BHB's database which contained racing information and the official document of registration of thoroughbred horses (known as the Stud Book) in the UK. It contained details of registered horses, jockeys, and fixture lists comprising race conditions, entries, runners and more.

The annual cost of maintaining the database and keeping it up to date was approximately £4 million, and involved around 80 employees in addition to "extensive" software and hardware.

The racing information was made available to radio and television broadcasters, magazines and newspapers and to members of the public who follow horse racing on the morning of the day before the race.

The names of all the participants in all the races in the UK were made available to the public on the afternoon before the race through newspapers and Ceefax/Teletext. On the day before a race, bookmakers received, through various subscriber services, a specific compilation of information without which bets could not be placed.

William Hill Organisation Ltd is one of the leading providers of odds in horseracing. In addition to traditional sales methods (such as licensed betting offices and telephone betting) it offers internet betting for all the major horse races in the UK.

The information displayed on William Hill's website came from newspapers and from an information service for subscribers that in turn obtained its information from BHB's database. Neither the newspapers nor the information service have any right to grant a sub licence to William Hill to use any information derived from BHB's database.

The information on the William Hill website only covered a small part of the whole of the BHB database and was arranged in a different way. If the customer required any other information to arrive at an informed view of the horse's chances of success, such information could be found elsewhere, such as newspapers.

The Fixtures Marketing lawsuits

Fixtures Marketing Ltd grants licences for the exploitation outside the UK of the fixture lists for the English premier league and its Scottish equivalent. Its distribution of licences is carried out on behalf of the organisers of the league games.

Around 2,000 matches are played each season and the fixture lists drawn up at the start of each season by the organisers of the leagues are stored electronically and set out in printed booklets (and other places).

According to Fixtures Marketing, the annual costs of developing and administering the fixture lists in England was about £11.5 million and annual licensing revenues in respect of the data about fixture lists in the English database were only about £7 million.

Oy Veikkaus AB, a Finnish pools operator, used data relating to games in the Premier League and the Scottish Football League for its betting activities. In 1998/1999 it used all the data relating to Premier league matches during the football season.

Veikkaus did not hold a licence to do so from Fixtures Marketing. It obtained the data from the internet, newspapers or directly from the football clubs and continuously checked their correctness. Veikkaus' annual turnover from betting on football matches in England amounted to several tens of millions of Euros.

In Sweden, AB Svenska Spel operated pools games in which bets could be placed on the results of football matches in the English and Scottish football leagues. Svenska Spel used matches from the leagues on pools coupons and in a special programme.

According to Svenska Spel, the data on the pools coupons came from British and Swedish daily newspapers, from Teletext, from the football teams in question, from an information service and from the publication 'Football Annual'.

Svenska Spel had no licence to exploit those data from Fixtures Marketing. According to Fixtures Marketing, the profit made by Svenska Spel in the games, for which it used between 21% and 90% of the total number of matches in the fixture lists of the English football leagues, amounted to SEK 600 to 700 million (or €65,955,809 to €76,948,444) per year in each case.

In Greece, Fixtures Marketing filed a number of lawsuits against the limited company Organismos Prognostikon Agonon Pododfairou AE (OPAP).

Fixtures Marketing brought claims against Oy Veikkaus AB, AB Svenska Spel and OPAP for unlawfully, and without permission, repeatedly extracting from the lists of football fixtures in England and Scotland a substantial amount of data regarding fixtures.

Argument of British Horseracing Board and Fixtures Marketing

BHB and Fixtures Marketing considered that the companies which were using their data for the purposes of taking bets on horseracing or football matches infringed their so-called "database right" under the Database Directive. In terms of the Database Directive, the maker of a database who can show that there has been qualitatively and/or quantitatively a substantial investment in either the obtaining, verifying or presenting of the contents of the database can prevent the extraction and/or re-utilisation of the whole or of a substantial part, evaluated qualitatively and/or quantitatively, of the contents of that database by any party not authorised by them to do so.

How the cases reached Europe

The Court of Appeal of England and Wales, the Finnish Vantaan Käräjäoikeus, the Swedish Högsta Domstolen and the Greek Monomeles Protodikeio Athinon, before which these proceedings were pending, each referred several questions to the Court of Justice on the subject of the effect of this "database right" under the Database Directive. The UK referral was made in August 2001.

The rulings

The Court clarified that the term "database" refers to any collection of works, data or other materials (those works being 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 materials.

Furthermore it added that, under the Database Directive, the protection for databases is reserved for those databases where it can be shown that there has been, qualitatively or quantitatively, a substantial investment in the obtaining, verification or presentation of their contents.

The Database Directive also prohibits extraction and/or re-utilisation of the whole or of a substantial part of a database and also, under certain conditions, of insubstantial parts of a database. The Court then turned to the specifics of each case.

Judgments on the Fixtures Marketing lawsuits

The question for the Court in these cases was whether there had been sufficient investment in the Fixtures Marketing database to bring the protection granted by the Database Directive into play. The Court ruled that the expression 'investment' in the obtaining of the contents of a database refers to the resources used to seek out existing materials and collect them in the database. It does not cover the resources used for the creation of materials that make up the contents of a database.

The fact that the maker of a database is also the creator of the materials contained in it does not exclude that database from the protection of the database right, provided that he establishes that the obtaining of those materials, their verification or their presentation required substantial investment in quantitative or qualitative terms, which was independent of the resources used to create those materials.

The Court found, however, that although a football fixture list may be considered to be a database within the meaning of the Database Directive, finding and collecting the data that make up such a list does not require any particular effort on the part of the professional leagues. Those activities are indivisibly linked to the creation of those data, in which the leagues participate directly as those responsible for the organisation of football league fixtures. Obtaining the contents of a football fixture list thus does not require any investment independent of that required for the creation of the data contained in that list.

Nor do the professional football leagues need to put any particular effort into monitoring the accuracy of the data on league matches when the list is made up, because those leagues are directly involved in the creation of those data. Even the verification of the accuracy of the contents of fixture lists during the season (for example, following the postponement of a match) does not entail substantial investment.

The presentation of a football fixture list, too, is closely linked to the creation of the data that make up the list and does not require investment independent of the investment in the creation of its constituent data.

It followed, said the Court, that neither the obtaining, verification, nor presentation of the contents of a football fixture list attests to substantial investment which could justify protection by the database right provided for by the Database Directive.

Fixtures Marketing could therefore not use the Database Directive to prevent the use of its data by Oy Veikkaus, Svenska Spel and OPAP.

Judgment on The British Horseracing Board's suit

The Court considered in detail what is meant by the investment in obtaining, verifying and/or presenting the contents of a database and, for the same reasons as were given in the Fixtures Marketing cases, concluded that the BHB database did not attract database right protection.

The Court then considered the question of whether the activities carried out by William Hill were acts which are prohibited by the database right.

The Court said that acts of extraction (that is, transferring the contents of a database to another medium) and acts of re-utilisation (which means making the contents of a database available to the public) of the whole or a substantial part of the contents of a database require the authorisation of the maker of the database, even where he has made his database accessible as a whole or in part to the public or has authorised a specific third party or specific third parties to distribute it to the public.

Had, therefore, William Hill extracted or utilised a "substantial part" of the database? The Court said no.

The expression "substantial part", in quantitative terms, of the contents of a database refers to the volume of data extracted from the database and/or re-utilised and must be assessed in relation to the total volume of the contents of the database. In qualitative terms, it refers to the scale of the investment in the obtaining, verification or presentation of the contents extracted or re-utilised.

The volume of data extracted by William Hill represented, according to the Court, "only a very small proportion of the whole of that database", and was therefore not, quantitatively, a substantial part of the database.

In addition, the Court observed that the resources used by BHB in the course of organising horse races, to decide the date, the time, the place and or name of the race and the horses running in it, represented investment in the creation of the materials contained in its database, which, as in the Fixtures Marketing cases, is not relevant in terms of the Database Directive's protection.

Moreover, the verification prior to the entry of a horse on a list (verification of the identity of the person entering the horse, the characteristics of the horse, the identity of the owner and the jockey) takes place at the stage of the creation of the data and cannot, therefore, be considered to constitute investment in the verification of the contents of a database.

Accordingly, since the materials extracted and re-utilised by William Hill did not require investment by BHB that was independent of the resources required for their creation, those materials did not qualitatively constitute a substantial part of the contents of the BHB database.

The Court then considered a prohibition in the Database Directive against the unauthorised extraction and/or re-utilisation of insubstantial parts of the contents of a database by unauthorised acts, the cumulative effect of which is to reconstitute and/or make available to the public the whole or a substantial part of the contents of that database and thereby seriously prejudice the investment made by the maker of the database.

Did this apply to William Hill? Again the Court said no.

In its opinion the acts of extraction and/or re-utilisation carried out in a repeated and systematic manner by William Hill on the occasion of each race held did concern insubstantial parts of the BHB database. However, said the Court, there was no possibility that, through the cumulative effect of its acts, William Hill might reconstitute and make available to the public the whole or a substantial part of the contents of the BHB database.

William Hill, therefore, did not seriously prejudice the investment made by the BHB in the creation of that database, and was not prohibited by the Database Directive from using the database.

In 2005 it fell to the Court of Appeal to apply the ECJ's ruling in the BHB and William Hill case.  BHB tried to argue that the data underwent a two-stage process (first, the drawing up of a provisional list of runners and riders, and second, the checking and publication of a final list) and that the second stage used resources which were independent of the creation of the data and that therefore the BHB database should be afforded protection.  However, given that the ECJ's ruling was so explicitly linked to the facts of the case (which had not been misunderstood), the Court of Appeal rejected this argument.  This being so, there was no need for the Court of Appeal to go on to consider whether William Hill's activities were infringing.

Interpretation of the Directive – definitions

In assessing whether there is an infringement:

  • the only activities capable of infringing are 'extraction' and 're-utilisation';
  • the purpose for which the maker created the database, and the intrinsic value of the data itself, is irrelevant;
    similarly, the intention of the infringer is not relevant; commercial use is not a decisive factor;
  • 'a substantial part of the contents of the database' includes works, data or other material derived from the database but which do not necessarily have the same systematic or methodical arrangement and individual accessibility as the original database;
  • the fact that the contents of the database are otherwise publicly available does not affect the protection of the database;
  • 'extraction' and 're-utilisation' includes indirect use of the database. Therefore a person may extract or re utilise the contents of a database without having direct access to the database from which the contents are derived (or realising they have done so);
  • 'Obtaining' does not include the creation of data by the maker, but requires the collection of existing works or data;
  • 'Verifying' applies to data that already form the contents of the database; it is primarily a matter of monitoring the contents for completeness and accuracy;
  • 'Presenting' includes the presentation to users;
  • 'Substantial' is defined in the DRegs in terms of quality or quantity or a combination of both. The investment made by the maker will always have to be taken into consideration in the assessment of whether a substantial part has been taken. The demarcation of what is 'substantial' is for the Court to decide in each individual case;
  • 'Extraction' is defined as the temporary or permanent transfer of the contents to another medium by any means and in any form, e.g. printing out data would amount to extraction;
  • 'Re-utilisation' is defined as making the contents of the database available to the public by any means. Some examples are provided in the Database Directive including distributing copies, renting or making available online; and
  • 'Repeated and systematic' are cumulative requirements. An activity is repeated and systematic when it is carried out at regular intervals, for example weekly or monthly.

Exceptions to database right for teaching and research

The DRegs provide that database right in a database which has been made available to the public in any manner is not infringed by fair dealing with a substantial part of its contents if:

  • that part is extracted by a person who is a lawful user of the database (that is, someone with a right to use the database);
  • it is extracted for the purpose of illustration for teaching or research and not for any commercial purpose; and
  • the source of the database is indicated.

Future

This decision has provided critical guidance about the database right, and this has placed a restrictive interpretation on its scope.  In 2005 the European Commission published its first evaluation of whether the Database Directive has been successful in achieving its goals.  It concluded, amongst other things, that the ECJ's narrow construction in the BHB and Fixtures Marketing cases went against the Commission's original intention of protecting databases which were not sufficiently original to attract copyright protection, and that the Database Directive had failed in its objective of encouraging the creation of more databases in the EU. (However, the Commission noted that the figures on which its research were based were subject to some "considerable uncertainty" and did suggest a more complex picture where databases in some sectors, such as the publishing industry, have experienced growth.)  Following the report, the Commission consulted interested parties on options for reform, including the possibility of repealing the whole Database Directive, withdrawing the database right or leaving things as they are.  Responses to the consultation have yielded even support for the last two options.  It is understood that the Commission's preferred option, at present, is to leave the Database Directive untouched.

At the time of writing, the German courts have referred questions to the ECJ in order to clarify the concept of "extraction".  The case concerns Directmedia's use of the University of Frieburg's poetry anthology when producing its CD ROM, which covers broadly the same subject matter as the anthology.  The Advocate General (AG) has delivered an opinion in which she concluded that "extraction" should be given a wide interpretation.  She said that it should not necessarily be limited to the physical copying of data, and should, for example, include consulting a database and then reproducing its contents.  While the ECJ frequently follows the AG's opinion, this is not always the case, and so the ECJ's ruling is awaited with interest.

Practical tips

Those involved in creating, organising or administering databases, and those making use of data sources belonging to others, should consider their activities in light of these decisions.  In particular:

  • if your business collects and distributes information taken from outside sources particularly websites and media sources (e.g. newspapers) you should now reassess those activities to determine whether they could be infringing database rights;
  • we can help by advising you on whether your activities or the way you collect information needs to be revised to minimise the risk of infringement, or attract database rights; and
  • if you receive a demand to pay licence fees or if you receive a claim that you are infringing copyright or database right, we can act quickly to assess the situation and advise you on the appropriate action.

For further tips in this area, please refer to our guide Database Rights: the basics.

Contacts

Expertise in Copyright

Copyright is an extremely valuable, often unrecognised or misunderstood right which protects a whole range of original materials including written materials, software, artistic materials, music and dramatic works. It arises automatically without the need for registration in most countries and protects these materials from unauthorised copying. It is essential in business to identify such rights, ensure they are owned by the correct entity, properly protected, enforced and exploited.

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