Australia: A special case: The European database directive

Big data: Legal challenges
Last Updated: 7 February 2014
Article by Mark Vincent and Katrina Crooks

Big Data: Legal Challenges (Full Report)

The database right is a peculiarly European right, brought into effect by the Database Directive35. The Database Directive grew out of the EU Information Market Policies Actions Program established to promote the information services market. Intellectual property protection for databases became a primary issue. The result was the Database Directive which notes in its Preamble the following matters:

  • the making of databases requires the investment of considerable human, technical and financial resources while such databases can be copied or accessed at a fraction of the cost needed to design them independently;
  • the unauthorised extraction and/or re-utilisation of the contents of a database can have serious economic and technical consequences;
  • databases are a vital tool in the development of an information market within the Community;
  • the exponential growth, in the Community and worldwide, in the amount of information generated and processed annually in all sectors of commerce and industry calls for investment in all the Member States in advanced information processing systems.

In addition to setting out the conditions on which databases would be entitled to copyright, the Database Directive created a sui generis right which provided a right to the maker of a database to prevent the extraction or re-utilisation of all or a substantial part of the contents of a database 36 or the repeated and systematic extraction or re-utilisation of insubstantial parts of the contents of a database which conflicts with a normal exploitation of that database or which unreasonably prejudice the legitimate interests of the maker of the database 37.

"Extraction" is defined as "the permanent or temporary transfer of all or a substantial part of the contents of a database to another medium by any means or in any form" and "re-utilisation" as "any form of making available to the public all or a substantial part of the contents of a database by the distribution of copies, by renting, by on-line or other forms of transmission"38.

Such right subsists for 15 years from the end of the year in which the database is completed39.

The concept of a database is defined in the Directive as "a collection of independent works, data or other materials arranged in a systematic or methodical way and individually accessible by electronic or other means"40. Protection is provided to databases in which there has been "a substantial investment in either the obtaining, verification or presentation of the contents"41. There is therefore no requirement with respect to originality of the database. Its qualification for protection lies in the investment in the collation of its contents.

The nature of the required investment came to be considered in the BHB case referred to above42. BHB maintained a computerised database which was used to compile the "Fixture List". Compilation of the Fixture List was undertaken over a four to five month process each year culminating in weekly advertisement of races.

The BHB database included a collection of data accumulated over many years including the names and other details of over one million horses, details of registered owners, racing colours, registered trainers and registered jockeys. It also contained pre-race information, such as the place and date on which a race-meeting is to be held, the distance over which the race is to be run, the criteria for eligibility to enter the race, the date by which entries must be made, the entry fee payable, the amount of money the racecourse is to contribute to the prize money for the race, and the initial name of the race.

William Hill, a bookmaker, used information from the database as part of its online betting service. The English High Court found that William Hill infringed the database right in the BHB database. William Hill appealed and a reference was made to the European Court of Justice on various questions relating to the interpretation of the database right, including the meaning of the terms "obtaining" and "verifying", in relation to subsistence of the right.

The ECJ noted the purpose of the Database Directive to promote and protect investment in data storage and processing systems which contribute to the development of an information market against a background of exponential growth in the amount of information generated and processed annually in all sectors of activity.

Against that background, the ECJ held that the expression "investment in the obtaining of the contents of a database" must be understood to refer to the resources used to seek out existing independent materials and collect them in the database, and not to the resources used for the creation as such of independent materials. The purpose of the protection by the sui generis database right is to promote the establishment of storage and processing systems for existing information and not the creation of materials capable of being collected subsequently in a database. The expression "investment in the verification of the contents of a database" must therefore be understood to refer to the resources used, with a view to ensuring the reliability of the information contained in that 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 data or other materials which are subsequently collected in a database, on the other hand, are resources used in creating a database and cannot therefore be taken into account in order to assess whether there was substantial investment in the terms of the Database Directive.

The Court went on to note that the fact that the creation of a database is linked to the exercise of the creation of the materials contained in the database does not preclude protection, provided there is substantial investment as specified in the Directive.

In the case at hand, the investment in the selection of the horses admitted to run in a particular race related to the creation of the data and did not constitute investment in obtaining the contents of the database. The numerous checks carried out as to matters such as to the identity of the person making the entry, the characteristics of the horse and the classification of the horse, its owner and the jockey were made at the stage of creating the list for the race in question and thus constituted investment in the creation of data, not in the verification of the contents of the database.

As is apparent from the above, the point at which creation of data becomes obtaining of data for a database is not clear cut. Several further UK cases have since considered this dividing line.

British Sky Broadcasting Group Plc v Digital Satellite Warranty Cover Ltd (In Liquidation)43 concerned a database containing Sky's subscribers' details, such as name, address, telephone number, details of their Sky equipment and installation date. The defendants contended that the investment relied upon by Sky fell on the wrong side of the creation/collection line because Sky created the customer data rather than obtaining or verifying it. Arnold J rejected the argument and distinguished the BHB case on the basis that the key information taken, being the lists of horses in races, had been created by or on behalf of the claimants. In this case Sky did not create new information by entering a customer's details into its database, it simply recorded pre-existing information in a systematic way.

In Football Dataco Ltd v Sportradar GmbH44, the issue again came to be considered, this time in relation to a database created by live feed of information from football matches as they were played about matters such as goals scored, penalties, shots and kicks taken etc. Sportradar 'scraped'45 this information once it was published online to create its own service.

Floyd J concluded that there was a fundamental difference between runners and riders in a horse race and fixture lists, on the one hand, and goals and other sporting results recorded at a live match on the other, the former being created by the organisers of the events, whereas the latter are created by the players. He therefore found that factual data which is collected and recorded at a live event such as a football match about events outside the control of the person doing the collection and recording is not created by that person, but is obtained.

In doing so he focused the inquiry on whether the investment involves creation of new information, which he found here it did not. The database therefore qualified for database right protection.

Given that qualification for the database right relies on investment rather than creativity, there appears greater chance that a Big Data database may qualify for database right protection in Europe. The owner will still need to show significant investment in the obtaining of the information, and this may be easier to establish in some cases than others. Nevertheless the database right appears better adapted to Big Data than copyright, in line with the objectives of the Database Directive as outlined above.

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35Council Directive 96/9/EC of 11 March 1996, OJ L 77/1996 20
36Database Directive, Article 7(1)
37Database Directive, Article 7(5)
38Database Directive, Article 7(2)
39Database Directive, Article 10(1). Further generations of databases may qualify for a separate term if the changes would result in the database being considered to be a substantial new investment: Article 10(3)
40Database Directive, Article 1(2)
41Database Directive, Article 7(1)
42Supra note 36
43[2011] EWHC 2662 (Ch)
44[2012] EWHC 1185 (Ch)
45See para 105 below for further consideration of 'scraping'

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.

Shelston IP has been awarded the MIP Global Award for Australian IP Firm of the Year 2013.

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Katrina Crooks
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