The Directive was passed in 1996 with the intention of protecting the investment involved in making a database. While copyright law protects databases if they are sufficiently creative and original, there are many other databases – especially compilations of information or commonplace data, such as telephone directories, music charts or football match listings – that are not covered by copyright law.
The Directive created a new form of protection known as the sui generis database right, a specific property right for databases that is unrelated to other forms of protection such as copyright.
But Monday's report on the legislation, now implemented across Europe, highlights the flaws.
The Directive was intended to stimulate the growth of databases in Europe. Perhaps, with good legal protection, businesses would invest more in building databases for licensing to others. But there is no evidence of growth. The Commission points out that the number of databases appearing in the Gale Directory of Databases for 2004 was 3,095 – just three databases more than the total listed shortly before the Directive came into force.
These figures do not necessarily reflect on the merits or demerits of the Directive; nevertheless, Europe's publishing and database industries seem to claim that sui generis protection is crucial to the continued success of their activities.
In a survey of stakeholders, 75% of respondents told the Commission that they were aware of the existence of the sui generis right. Of these, 80% feel "protected" or "well protected" by the right. Sixty-five percent said the legal protection of databases is higher than it was before harmonisation.
The survey was addressed to 500 European companies and organisations involved in the database industry (publishers, suppliers of data and information, database manufacturers, distributors, etc.) and 101 replies were received.The Commission is fully aware of problems with the sui generis right: apart from the failure to produce any measurable impact on database production, the scope of the right is unclear. Also, granting protection to "non-original" databases is perceived as locking up information, especially information in the public domain.
The sui generis right is expressed in the Directive as follows:
"Member States shall provide for a right for the maker of a database which shows that there has been qualitatively and/or quantitatively a substantial investment in either the obtaining, verification or presentation of the contents to prevent extraction and/or re-utilisation of the whole or of a substantial part, evaluated qualitatively and/or quantitatively, of the contents of that database."
The Commission's report points out that none of these terms has a precise legal meaning. Compounding the confusion over the definition was a set of decisions by the European Court of Justice in November 2004, among them a ruling on bookmaker William Hill's reuse of a database belonging to the British Horseracing Board.
These landmark rulings introduced a distinction between creation of data and obtaining it. The European Court refused to count any investment before or at the time of creating data as constituting a substantial investment in the database itself.
The British Horseracing Board decision surprised many. The Board drew up extensive lists of runners and riders; but the European Court said that the resources used to draw up such a list did not constitute investment in the obtaining and verification of the contents of the database in which that list appears. The sui generis right protects only the obtaining of the data for the database – not the creation of the data.
So publishers of directories, listings or maps are still protected today – but only if they obtain the data from others, rather than create the data themselves.
The ruling ruined the British Horseracing Board's plans to license its database – a revenue stream that it valued at £100 million a year. Football's governing bodies are also expected to lose substantial revenue by not being able to charge for information contained in football fixtures lists.
Notwithstanding, 43% of those responding to the Commission's survey said they believe that the legal protection of their databases will be the same as before the European Court rulings – or even reinforced. Only 36% perceived the scope of protection being weakened or removed – although 54% believe that fewer databases will be protected by the sui generis right.
Monday's report from the Commission suggests that, following last November rulings, database makers will devise legal strategies to get around the distinction drawn and that this might result in online databases increasingly being secured by systems of access control.
But the Commission report is inconclusive. The institution does not form a view on what exactly is wrong with the Directive or what should be done about it. Instead it presents four options and invites comments.
The first option is to repeal the whole Directive and allow Member States to revert to their former legal positions. The Commission warns that Member States could then protect "original" databases under diverging levels of "originality". So the UK would revert to its "sweat of the brow" copyright test (whereby copyright was a reward for the hard work that went into compiling facts); while Scandinavian countries would revert to a "catalogue rule" (protecting a catalogue or table in which a large number of information items have been compiled).
Option two is to withdraw the sui generis right in isolation but keep the harmonised level of copyright protection for "original" database. The UK and Ireland would revert to the sweat of the brow test to protect "non-original" compilations; others would keep their threshold of "originality," to protect "original" databases under copyright law and to use, for example, the law of misappropriation to protect "non-original" compilations. In practice, the approach of the UK and Ireland protected more databases than the approach of neighbouring countries before the Directive came into effect.
Option three is to amend the sui generis right, to clarify the scope of protection; option four is to maintain the status quo.
The Commission will form a policy on the future of database protection in the EU; but first it is seeking comments from interested parties, by 12th March 2006.
"Databases are an important part of Europe's economy in the information age,” said Internal Market and Services Commissioner Charlie McCreevy on Monday. “I want to make sure that EU rules encourage the development of this sector. This evaluation helps ensure that we are on the right track. I now call on the industry and other stakeholders to comment and tell us more about how EU database rules affect them."
