Italy: The European IP Bulletin July 2004

Last Updated: 4 August 2004

By Margherita Barié, Laurence Cohen, Duncan Curley, Dr. Thomas Hauss, Justin Hill, Fred Pearson and Boris Uphoff


1. International Standards For The Protection Of Broadcasters’ Rights To Be Updated

World Intellectual Property Organisation (WIPO) reported on 10 June 2004 that WIPO Member States have made significant progress towards the adoption of a new international treaty on the protection of broadcasting organisations.

The intellectual property rights of broadcasters, which are currently protected by the 1961 Rome Convention on the Protection of Performers, Producers of Phonograms and Broadcasting Organisations, are increasingly facing problems of piracy. As a consequence, the Standing Committee on Copyright and Related Rights (SCCR) started work on a new instrument for their protection in 1997. At the eleventh session of the SCCR which took place in Geneva from 7 to 9 June 2004, WIPO proposed a consolidated text for a new WIPO Treaty on the Protection of Broadcasting Organisations, which is made up of 31 articles. WIPO Member States further recommended that the WIPO General Assembly consider convening a diplomatic conference on the protection of broadcasting organisations, which would be the final step in the process of developing the new international treaty that would update the rights of broadcasting organisations.

Despite the recent progress of the SCCR, many issues still remain to be addressed. Amongst those are the differences of opinions between Member States as to the scope of the rights to be granted to broadcasters, some delegations considering that protection should be limited to rights necessary to fight piracy. Other issues include the term of protection and the beneficiaries of the new rights. Indeed, while some Member States think that only traditional broadcasters should be protected, others consider that protection should also be extended to cablecasters and webcasters.

Even though most WIPO Member States seemed to favour a new international treaty for the protection of broadcasters’ rights, the project encountered criticism from consumer rights organisations, saying that the future treaty would endanger the public interest by allowing broadcasters to control the public’s use of broadcast audio and video performances. It was argued, amongst other things, that the draft text’s intention to afford copyright protection over broadcasts signals for 50 years was far exceeding the economic lifespan of a broadcast and the time necessary for a broadcasting corporation to recoup its investment in the programming.

Indeed, according to Robin Gross, the executive director of IP Justice, a civil liberties organisation that seeks to promote balanced intellectual property rights, the treaty is "a "back-door" attempt to extend copyright protections indefinitely, by permitting companies to broadcast public domain material and then control the public’s use of the underlying public domain programming".

2. British Horseracing Board v William Hill

The Advocate-General (the "A-G") was of the view that the term database should be interpreted widely and would, in certain circumstances, allow the owner to prevent use of the data contained in it. The case at issue involves the British Horseracing Board (BHB), who have database recording information on fixtures, horses, trainers, owners and jockeys, which bookmakers and newspapers pay for access. When William Hill offered an internet betting service using the information contained in the database, the BHB claimed it fell foul of Directive 96/9/EC of the European Parliament on the legal protection of databases (the "Database Directive"). William Hill obtained its information from information services for subscribers and various newspapers which obtain their information from the BHB’s database. It is important to note that the BHB does not give permission to sub-licence any of the information given to William Hill by these sources which has been obtained from its database.

The High Court held that William Hill was infringing the BHB’s database right by extracting or reutilising a substantial part of the database. William Hill appealed, arguing that the High Court had construed the database right too widely. It said that the right protected the form rather than the content of the database. The Court of Appeal referred the case to the ECJ for its interpretation of the legislation.

The A-G’s opinion broadly followed the approach taken at first instance and gave a wider interpretation to the right. It clarified what constitutes a qualifying database and what act amounts to infringement. Data copied to another medium and made available to the public is contrary to the Database Directive, depending on whether the data is a substantial part of the database or, if an insubstantial part, is utilised repeatedly.

The A-G did specify that the database right is there to protect the database itself and its contents rather than the information itself, and provides protection in the investment found in creating the database. The investment required a ‘substantial investment’ in qualitative and quantitative terms in the creation of the database. It would be for the national court to determine whether the creation of the database involved a substantial investment. In this case the court would need to take into consideration the matters involved in obtaining the fixtures list.

The A-G went further in the examination of ‘investment’ and stated that it would only be investment in obtaining, verifying (including ensuring the database is up to date) and presenting the contents of the database which would be afforded protection.

The implications of the A-G’s opinion is that once the owner of a database can establish that it is protected by the Database Directive, they will have the right to prevent the rearrangement of the content of the database, as well as the extraction/reutilisation of insubstantial parts of the contents of the database if carried out at regular intervals and subsequently prevent the owner from economically exploiting its contents or suffer damage in its economic interest. The A-G went on to add that the extraction of the data does not have to be taken directly from the database and can still be an infringement even if taken from another source. More importantly, an extraction from the database will be prohibited as regarding the contents of which there has been a substantial change and therefore is the result of a substantial new investment and hence, a new database right.

3. Database Right – Protecting Information or Effort?

The Opinions on the Database Directive 96/9/EC, dated 8 June, are given in British Horseracing Board v William Hill C-203/02, Fixtures Marketing v Svenska C-444/02, Fixtures Marketing v Oy Veikkaus C-46/02.

The Directive aims to protect the "misappropriation" of investment made in creating the database (recital 39) but nonetheless states that the right "should not give rise to the creation of a new right in the works, data or materials themselves" (recital 46).

The Opinions make clear that a right can be owned in a database even if it is merely the by-product of the owner’s other activities, whether measured qualitatively or quantitatively. That is, there is no need for a connection between the nature of the activity that led to the creation of the database and the infringer’s use of that database in his own economic interests. It is sufficient that the infringer is taking the collection of data for his own use.

It is sufficient for infringement by ‘extraction’ (Article 7(2)(a)) that only a small quantity of data is taken if the data taken represents a substantial technical or commercial investment. For infringement by ‘re-utilisation’ (Article 7(2)(b)) the data does not even have to be presented to the public in the form of the database, the justification presumably being that such data could only have been so easily searched or collected for use because it was in the form of the database.

Given that the owner’s investment was not aimed at the infringer’s type of use, it seems that it is not the investment that is protected but the data itself, a broader type of protection. For example, say there is a list of addresses of professional firms on an association’s website, designed to give the public contacts for professional advice. The names of individuals will not be necessary for the initial contact by the public and will not be included in that list. However, a person wishing to advertise to an individual at each firm might establish a basic list from the association’s list and then investigate the individuals’ names elsewhere for that personal contact. The data is being put to use in a different way from that envisaged by the association and the consequent construction of the database, nonetheless the right in the database is infringed.

This broader protection is limited where insubstantial parts of the database are extracted or re-utilised repeatedly when these acts conflict with the ‘normal exploitation’ of the right or ‘unreasonably prejudice’ the economic interests of the owner (Article 7(5)). The Opinions make clear that the former relates only to exploitation of the database itself, not the individual data. The latter relates to economic interests of the owner and is subject to a threshold requirement.

This narrower protection appears closer to a concept of misappropriation of the owner’s investment than the broader protection given to substantial use of the database.

The broad protection for databases was introduced partly in order to prevent market distortions as a result of differing levels of protection found across the EU (recital 11). However, in introducing the new independent protection for databases, the Directive has significantly increased the possible protection for data itself, even if the same data can be obtained from elsewhere. For a right owner this is good news especially in areas such as sports (use in betting) and address lists (use in marketing). However, the right itself is unlikely to increase the number of databases created and will make it more difficult, and expensive, for many other types of day-to-day business activities to continue without constant reference to where the data itself originated.

4. Electrolux Settles Vacuum Cleaner Lawsuit

Electrolux reported on 19 May that it had reached a settlement agreement in the vacuum cleaner trade secrets case with John North, a British inventor. Under the agreement, Electrolux will pay Mr North £17 million ($30 million) and Mr North has agreed to drop all claims, including future claims, in the matter.

Mr North, an engineer from Norwich in England, had claimed that he had invented an upright, bagless vacuum cleaner and had signed a confidentiality agreement under which he disclosed his design, which had taken him 10 years to complete, to Electrolux.

He claimed the company showed no interest at the time. However, a few months later he saw a similar machine in an electrical store. He said he took the machine apart and looked at the workings. He then accused Electrolux of copying his invention without permission.

The trial ran for over three weeks in El Paso, Texas, before the two parties reached a settlement agreement. The jury heard that the new vacuum cleaner sold nearly three million units, amassing profits of more than £58 million.

Mr North’s claimed design allowed the vacuum cleaner to exert greater downward force on a surface than previous devices had been able to achieve. Electrolux maintain that there is no merit to the charges despite reaching the settlement.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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