Out-Law News 9 min. read
10 Nov 2004, 12:00 am
The battle between William Hill and the British Horseracing Board was one of four cases upon which the European Court of Justice ruled on Tuesday. The other three cases concerned Fixtures Marketing Ltd, a company that grants licences for football fixtures.
The ruling, 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.
The British Horseracing Board (BHB), the governing authority for the British horse racing industry, is responsible for the compilation of data related to horseracing.
Its database contains racing information and the official document of registration of thoroughbred horses – known as the Stud Book – in the UK. It contains details of registered horses, jockeys, and fixture lists comprising race conditions, entries, runners and more.
The annual cost of continuing to maintain the database and keep it up to date is approximately £4 million and involves around 80 employees in addition to "extensive" software and hardware.
The racing information is 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 are made available to the public on the afternoon before the race through newspapers and Ceefax/Teletext. On the day before a race, bookmakers receive, 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 its web sites comes from newspapers and from an information service for subscribers that in turn obtains its information from the BHB's database. Neither the newspapers nor the information service have any right to grant a sublicense to William Hill to use any information derived from the BHB's database on its web site.
The information on the William Hill web site only covers a small part of the whole of the BHB database and is arranged in a different way. If the customer requires any other information to arrive at an informed view of the horse's chances of success, such information can be found elsewhere, such as newspapers.
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 is about £11.5 million and annual licensing revenues in respect of the data about fixture lists in the English database are only about £7 million.
Oy Veikkaus AB, a Finnish pools operator, uses 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 obtains the data from the internet, newspapers or directly from the football clubs and continuously checks their correctness. Veikkaus' annual turnover from betting on football matches in England amounts to several tens of millions of Euros.
In Sweden, AB Svenska Spel operates pools games in which bets can be placed on the results of football matches in the English and Scottish football leagues. Svenska Spel uses matches from the leagues on pools coupons and in a special programme.
According to Svenska Spel, the data on the pools coupons come 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 has 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 uses between 21% and 90% of the total number of matches in the fixture lists of the English football leagues, amounts 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.
BHB and Fixtures Marketing consider that the companies which are using their data for the purposes of taking bets on horseracing or football matches have infringed their so-called "database right" under the Database Directive. In terms of the 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-utilization 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.
The Finnish Vantaan Käräjäoikeus, the Court of Appeal of England and Wales, the Swedish Högsta Domstolen and the Greek Monomeles Protodikeio Athinon before which these proceedings are 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 Court clarified that the term "database" refers to 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 materials.
Furthermore, it added, under the Database Directive the protection for databases is reserved for those databases that show that there has been, qualitatively or quantitatively a substantial investment in the obtaining, verification or presentation of their contents.
The Directive also prohibits extraction and/or re-utilisation of the whole or of a substantial part of a database and, under certain conditions, of insubstantial parts of a database too, ruled the Court. The Court then turned to the specifics of each case.
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 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, said the Court.
But, the Court found, although a football fixture list may be considered to be a database within the meaning of the 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 follows, 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 Directive.
Fixtures Marketing could therefore not use the Database Directive to prevent the use of its data by Oy Veikkaus, Svenska Spel and OPAP.
The question here was not whether the BHB database was protected by the Directive – it was – but whether William Hill was carrying out acts prohibited by the database right.
Under the Directive, said the Court, acts of extraction (transferring the contents of a database to another medium) and acts of re-utilisation (making 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, said the Court. 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, observed the Court, the resources used by the 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 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 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 Directive from using the database.