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
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
