Key Points
- The Directive is due to be implemented in all member States of the EU by 1998.
- Data in databases will be protected by a new right, the right to prevent extraction and re-utilisation.
- Information databases of non-EEA companies will not be protected by the new right.
THE DATABASE DIRECTIVE
After a gestation and negotiation period of almost four years, the EU Database Directive was adopted on 27 February 1996. The Directive is due to be implemented into national law by 1 January 1998, and harmonises database protection through the EEA (i.e. the EU plus Iceland, Norway and Liechtenstein).
The Directive achieves its objectives by establishing two systems of protection. The structure and arrangement of databases will be protected by copyright. The data contained with the database will (unless it is already protected in its own right), be protected by a special new right called, snappily, the right to prevent unauthorised extraction and re-utilisation.
The effect of the Directive will be to increase the protection presently given to collections of data in most of the EEA. In the UK and Eire, where compilations of data are presently protected by copyright, the Directive allows copyright protection to run its term for databases that are already in existence on the 1 January 1998.
Definition of Database
The Directive defines "database" 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", but excluding computer programs used to operate the database. Note that a database does not have to be electronic: a set of index cards will qualify.
Copyright protection
The structure and arrangement of a database are protected by copyright in much the same way as any other copyright work. This protection is separate to (and without prejudice to) the protection of the contents of the database.
Extraction Right
The Directive requires member states to introduce the unauthorised extraction right for the owner 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 of that database". This suggests not only that some databases will not qualify, but that the onus is on the database owner to establish that its database does qualify.
This new right protects against the following acts:
- extraction: the permanent or temporary transfer of all, or substantial part of, the data to another medium by any means or in any form.
- re-utilisation: any form of making available to the public of all, or a substantial part of, a database by the distribution of copies, by renting, by on-line or other forms of transmission.
Like copyright, a "substantial" part is to be evaluated qualitatively and quantitatively. The Directive also provides that systematic insubstantial taking will, where it damages the database's owner's commercial interests, also be an infringement. Although the extraction right is likely to provide a form of protection which is similar to copyright, there are a number of differences.
- term: unlike copyright (which generally lasts for 70 years after the death of the author) the extraction right only lasts for 15 years from completion of the database. Where the database is made available to the public before the expiry of 15 years, the protection runs again from the making available to the public. Since both terms run from the 1st January following the completion and/or making available of the database, this would give cumulative protection of nearly 31 years.
More importantly, the term of protection is also renewable for an unlimited number of 15 year periods where there is substantial change to the content of the database. A substantial change includes the accumulation of successive additions, deletions, or alterations, which together result in the database being considered to be a "substantial new investment". This means that the accumulation of apparently insubstantial changes made to the database could collectively amount to a substantial change, and thereby qualify the database for a further 15 year period of copyright protection. Databases that are continually updated could benefit from an unending period of protection: where only part of a database is being updated, database operators should organise their databases so as to ensure that the whole of the database qualifies for renewed terms of protection. Even where this option is unavailable, database owners will be able to start the protection period running again by carrying out substantial verification of the database.
- fair dealing: although the Directive is ambiguous on this issue, it seems to suggest that the fair dealing provisions (which are standard in copyright) will, if introduced by the member states, only apply to contents stored in non-electronic databases.
- contractual restrictions: the owner of a database will not be able to restrict, by contract or otherwise, the use that a lawful user makes of insubstantial parts of the database. Most database owners will generally use contract terms to restrict the use that their customers can make of their data: the Directive prevents them from doing this in relation to insubstantial parts. However, since the Directive refers to making available to the "public", it may be possible to circumvent this by setting up closed user groups.
- non-European databases: The unauthorised extraction right only applies in favour of databases whose owner are companies which are formed within the EEA, and have their registered office, central administration or principal place of business within the EEA. Where the company only has its registered office or central administration within EEA, it must have a genuine ongoing link with a member state. Databases owned by companies which do not qualify (notably US owned databases) will remain unprotected unless their home territories enter into reciprocal agreements with the EU.
Dropped provisions
A number of provisions were dropped from the Directive during the long negotiation process:
- compulsory licensing: earlier drafts contained a provision whereby data which could not be independently created, collected or obtained would be subject to compulsory licensing.
- public body information: earlier drafts also contained a provision whereby information published by public bodies (e.g. the Patent Office, Companies House) would in certain circumstances also be subject to compulsory licensing. This provision, which looked like it might create a lucrative secondary market in public body information.
Conclusions
Information holders and resellers should consider the extent to which the implementation of the Database Directive will affect the protection their information currently receives. A shorter term of protection in the UK will be compensated by protection throughout the rest of the EEA and it may be that, by structuring the database correctly, a continuous period of protection can be achieved.
For further advice please contact us.
This newsletter is correct to the best of our knowledge and belief at the time of going to press. It is, however, written as a general guide, so it is recommended that specific professional advice is sought before any action is taken.
Garretts is authorised by the Law Society of England and Wales to carry on investment business.
