The British Horseracing Board (BHB) is the governing authority for horseracing. It is responsible for compiling a database that contains racing information and the official document of registration of thoroughbred horses – known as the Stud Book – in the UK.
The annual cost of maintaining the database and keeping it up to date is approximately £4 million and involves around 80 employees in addition to "extensive" software and hardware.
The BHB had been hoping to use the database as a source of revenue for funding the industry; but these plans have now been dashed by the ruling from the Court of Appeal. It applied the European Court of Justice's ruling: that the resources used to draw up a list of horses in a race and to carry out checks do not represent investment in the obtaining and verification of the contents of the database in which that list appears.
BHB Chairman Martin Broughton said on Wednesday: "Today is a black day for British racing because the Court’s decision prevents lift-off for a number of the sport’s plans to further increase its income."
"We will be seeking clarity as to why our database, which involves substantial investment in the obtaining and verification of information, is not protected. It would appear that most existing databases, and the protection they receive under law, have been neutered by today’s judgment," he added.
The case dates back to 2000, when the BHB sued William Hill over the bookmaker’s online publication of information, garnered from newspapers and a subscription service, which ultimately came from the BHB database. The BHB said that this was a breach of the Copyright and Rights in Databases Regulations of 1997.
These Regulations were brought in to implement the EU Database Directive.
The Directive states:
"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."
In short, the holder of a database right can prevent others from reusing substantial parts of that database without permission.
In February 2001, the High Court found in favour of the BHB, ruling that the bookmaker was not entitled to use data extracted from the BHB's database for the purposes of its online betting sites.
William Hill appealed to the Court of Appeals. In August 2001, that Court referred several questions to the European Court of Justice (ECJ) over the interpretation of the Database Directive.
The ECJ issued its ruling last year. It normally issues general judgments on points of law, leaving the application of those judgments to the national courts. But in this case it was specific about the facts of the case before it.
It found that the bookmaker was not prohibited by the Directive from using the BHB database because it fell outside the definition of the database right.
According to the ECJ: "The resources used to draw up a list of horses in a race and to carry out checks in that connection do not constitute investment in the obtaining and verification or presentation of the contents of the database in which that list appears."
According to Lord Justice Jacob, the ECJ's comments indicate that the "BHB's database, so far as it consists of official lists of riders and runners in races, is outside the scope of the right." He dismissed arguments from the BHB that the ECJ was acting under a "misunderstanding" of the facts.
The crucial point, he said, is to consider only the final published database in connection with the infringement allegation.
The BHB tried to argue that, in terms of the Directive, databases are created by a process of gathering in and checking. But Lord Justice Jacob reckoned the ECJ had implicitly rejected that approach. "It focussed on the final database – that which is eventually published," he wrote. "What marks that out from anything that has gone before is the BHB's stamp of authority on it. Only the BHB can provide such an official list. Only from that list can you know the accepted declared entries. Only the BHB can provide such a list. No one else could go through a similar process to produce the official list.
He continued:
"So 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. The nature of the information changes with the stamp of official approval. It becomes something different from a mere database of existing material."
The database from which William Hill took its information was therefore outside the scope of the right.
Lord Justice Clark and Lord Justice Pill agreed, although the latter expressed some reservations about the consistency of the ECJ's reasoning.
The BHB could appeal to the House of Lords, although it did not indicate whether it would do so.
Chairman Martin Broughton concluded:
“We will be seeking clarity as to why our database, which involves substantial investment in the obtaining and verification of information, is not protected. It would appear that most existing databases, and the protection they receive under law, have been neutered by today’s judgment.”
