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.
Background
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."
The Court of Appeal's ruling
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.”
