Databases are big business. In sports the income generated from selling fixtures lists and other data to the media, bookmakers, Internet gaming operators, and others helps to underwrite the investment made by those running racing and football in the
On 13 July 2005, the Court of Appeal gave its decision in the long running case of the British Horseracing Board Ltd (BHB) and others v William Hill Organisation Ltd ([2005] EWCA Civ 863). The Court of Appeal had to apply a recent and controversial decision of the European Court of Justice in November 2004. In a series of related judgments on 9 November 2004 (Fixtures Marketing v OPAP ([2005] 1 CMLR 16), Fixtures Marketing v Svenska Spel ([2005] ECDR 4), Fixtures Marketing v Oy Veikkus ([2005] ECDR 2) and BHB v William Hill ([2005] CMLR 15)) the ECJ significantly narrowed the scope of database right protection in Europe and the Court of Appeal saw no reason to depart from the clear ruling of the ECJ in relation to William Hill. The lists of runners and riders produced by the BHB and their related database were held not to be protected by database right.
Background
For those unfamiliar with the facts of the case, the British Horseracing Board is the governing body for the British horseracing industry. BHB maintains and develops an electronic database of racing information including lists of runners and riders in races. The database is constantly updated with the latest information, and the scale and complexity of the data kept by BHB has grown with time. The cost of running the database is equal to about 25% of BHB’s annual expenditure of £15 million.
William Hill used information from one of BHB’s data feeds (race venue, date, name and time of race, list of horses running) on its betting Web site. BHB claimed that this use breached its database right – the sui generis right created by Directive 96/9/EC on the legal protection of databases, which was implemented into English law by the Copyright and Rights in Databases Regulations 1997 (SI 1997/3032).
Laddie J had ruled that William Hill had infringed BHB’s database right. On appeal, the Court of Appeal referred several questions to the ECJ on the interpretation of the Directive and, in particular, on the definition of database right and when it is infringed.
Defining Database Right – the ECJ’s Judgments
Article 7(1) of the Directive states the following:
“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-utilization of the whole or of a substantial part, evaluated qualitatively and/or quantitatively, of the contents of that database.”
The ECJ defined a database very broadly so that any collection of independent works is covered, provided that each work can be retrieved separately. Therefore, databases may include telephone directories, contact lists, collections of works, Web sites, magazines and newspapers. The definition is not limited to electronic databases.
Substantial investment
For database right to exist there has to be substantial investment in the obtaining, verification or presentation of the contents of the database.
“Investment in.the obtaining.of the contents” must be understood to refer to the resources used to seek out existing independent materials and collect them in the database. It does not cover the resources used for the creation of the material which makes up the contents of a database.
“Investment in.the.verification.of the contents” refers to the resources used, with a view to ensuring the reliability of the information contained in the database, to monitor the accuracy of the materials collected when the database was created and during its operation. The resources used for verification during the stage of creation of materials which are subsequently collected in a database do not fall within that definition.
So for example, a database of historic sporting events (e.g. who won what and when) or stock price movements and dividends would potentially qualify, while creating new data and compiling it, e.g. a television programme schedule list or a list of runners in a race, is unlikely to be protected any longer.
Infringement
Infringement of database right occurs where there has been, “extraction and/or re-utilization of the whole or of a substantial part, evaluated qualitatively and/or quantitatively, of the contents of that database.”
“Extraction” and “re-utilization” are defined widely and refer to an unauthorised act of appropriation or distribution.
There will be an infringement if the volume of information taken is substantial when it is compared against the total volume of the contents of the database (ie is it “quantitatively substantial”) or if a small amount is taken but there was significant investment in obtaining, verifying or presenting the data in question.
Infringement can also occur in respect of repeated and systematic extraction and utilisation of insubstantial parts of the database if the cumulative effect of the extraction or re-utilisation leads to the whole database, or a substantial part of it, being reconstituted and as a result seriously prejudices the investment made by the database maker. This is clearly a high threshold.
Direct access to the database is not required for there to be infringement (it is sufficient just to access a data feed or other presentation of the data, not the database itself).
Application to the facts
The ECJ held that the resources used by BHB to select the horses to run in the races related to the creation of the data which made up the lists for those races and appeared in the database. The use of these resources did not constitute relevant investment in obtaining the contents of the database. Therefore, this investment could not be taken into account in assessing whether the investment in making the database was substantial. This was the case even though the process of entering a horse for a race required a number of prior checks.
Therefore, database right did not subsist in the relevant database.
The ECJ also found that in any event William Hill had not taken a quantitatively or qualitatively substantial part of the database – although the data was vital to the organisation of horse races, no account could be taken of the intrinsic value of the data. As the investment made by BHB was in the creation of the data, and not in obtaining existing information and collecting it in a database, the data could not qualitatively comprise a substantial part of the database.
There was also no possibility that William Hill’s repeated and systematic extraction and re-utilisation of insubstantial parts of the database would re-constitute the whole or a substantial part of BHB’s database.
Therefore, even if database right had subsisted in the database, William Hill would not have infringed it.
Application of the ECJ’s Ruling by the Court of Appeal
The case was returned to the Court of Appeal to consider how the ECJ’s ruling should be applied. The ECJ’s ruling was unusual in that it applied its interpretation of the Directive to the facts of the case. BHB argued that the ECJ had misunderstood the facts when applying its reasoning to them. The Court of Appeal rejected BHB’s arguments and upheld the ECJ’s decision.
Implications of the Ccase
It will now be more difficult for database owners to claim database right and, if they are able to claim it, it will be more difficult for them to claim that their right has been infringed.
The requirement for investment to be in the obtaining, verification and/or presentation of the contents of a database, as opposed to the creation of data, reduces the protection that database right protection can provide. It may be problematic trying to distinguish between investment in the creation of the data on one hand and the making of the database on the other.
Therefore, database owners should ensure that they document their processes carefully and perhaps have separate budgets when compiling a database so that it can be shown that there was investment in both creating the data (if they are creating it) and in obtaining/verifying/presenting the data in the database.
Even if database right does exist, it will now be more difficult to protect, especially where what is taken are small amounts of data on a regular basis. This may lead database owners to re-think how they structure their databases, and to produce smaller databases so that infringement will be easier to prove.
As the scope of protection provided by database right has been narrowed, database owners may wish to consider whether their databases will be protected by copyright. For copyright to apply, the database has to be the author’s own intellectual creation. So, for example, copyright may not apply to a simple alphabetical listing, but it may apply to an alphabetical listing containing numerous categories of information.
If database owners discover that their databases now lack protection they should urgently review their licensing contracts and how they distribute, create, obtain and present their data to see if they can still protect it.
Database users may now have leverage to negotiate a better deal with their database suppliers and may be able to dispense with their database licences completely (there is already litigation in this area: see for example BHB v Victor Chandler [2005] EWHC 1074 (Ch) and Attheraces v BHB [2005] EWHC 1553 (Ch)).
In the world of sport, previously lucrative income from selling fixture lists and other data may now end and alternative revenue streams may need to be found.
Sally Hui (sally.hui@tarlolyons.com) is a solicitor in the technology group and Simon Stokes (simon.stokes@tarlolyons.com) is Partner and Head of Commercial Technology at Tarlo Lyons. The second edition of Simon Stokes’ book “Digital Copyright” has recently been published by Hart Publishing.
