On 9 November the European Court of Justice (‘ECJ’) delivered its long awaited judgments in The British Horseracing Board and Others v William Hill Organization Ltd (Case C-203/02), Fixtures Marketing Ltd v Oy Veikkaus AB (Case C-46/02), Fixtures Marketing Ltd v Organismos Prognostikon Agonon Podosfairou AE (Case C-444/02) and Fixtures Marketing Ltd v Svenska Spel AB (Case C-338/02).
All four cases concerned the European Directive on the Legal Protection of Databases 96/9/EC (the ‘Directive’), and specifically, the extent to which sporting databases are protected under it.
Facts
The British Horseracing Board (‘BHB’) v William Hill Organization Ltd (‘William Hill’)
BHB, the governing authority for the British horse racing industry, maintains a database recording information on fixtures, horses, trainers, owners and jockeys, which bookmakers and newspapers pay a fee to access. The cost of maintaining and updating the database is in the region of £4 million per annum. The fees charged by BHB for the use of the information cover about a quarter of that cost.
On the day before a race, subscriber bookmakers receive a compilation of information from BHB without which bets could not be placed. William Hill is one of the leading providers of odds in horseracing, and in addition to traditional sales methods, it offers internet betting for all the major horse races in the UK. The information displayed on its websites comes, initially, from newspapers published the day before the race and, secondly, from an information service for subscribers which in turn obtains its information from BHB's database.
The information on the William Hill websites only covers a small part of the whole of the BHB database and is not arranged on the websites in the same way as it appears in the BHB database.
Fixtures Marketing Ltd v Various
Fixtures Marketing grants licences for the exploitation outside the UK of the fixture lists for the English Premier League and the Scottish Football League. Its distribution of licences is carried out on behalf of the organisers of the league games.
Fixture lists have to be drawn up for the matches to be played in the various divisions during the season (about 2,000 matches per season in England and 700 matches per season in Scotland). The data are stored electronically and published in printed booklets (and other places), both chronologically and by reference to each team participating.
According to Fixtures Marketing, the annual cost of developing and administering the fixture lists in England is about £11.5 million and annual licensing revenues in respect of the data in the English database amount to about £7 million (about 60 per cent of the cost).
- Oy Veikkaus AB (‘Veikkaus’)
Around 200 matches are used each week for the purposes of betting. In order to organise its betting activities, Veikkaus collects data regarding matches from the internet, newspapers or directly from the football clubs, and checks its correctness. Its annual turnover from betting on league football matches in England amounts to ‘several tens of millions of euros.’
- Svenska Spel AB (‘Svenska Spel’)
According to Svenska Spel, it had no knowledge of the databases maintained by Fixtures Marketing, and the data on the pools coupons came from British and Swedish daily newspapers, teletext, the football teams in question, an information service and from a publication called Football Annual.
According to Fixtures Marketing, the profit made by Svenska Spel in the games offered by it (Oddset, Måltipset and Stryktipset), for which it uses between 21 and 90 per cent of the total number of matches in the fixture lists of the English football leagues, amounts to approximately €66 to €77 million per year in the three games.
- Organismos Prognostikon Agonon Pododfairou AE (‘OPAP’)
OPAP has a monopoly on the organisation of gambling in Greece. Fixtures Marketing claimed that OPAP repeatedly extracted from the lists of football fixtures in England and Scotland a substantial amount of data regarding fixtures, and transferred them to various internet sites which OPAP distributed and made available to the public in Greece.
Not one of the three organisations has ever been granted a licence by Fixtures Marketing.
The References
BHB and Fixtures Marketing brought proceedings alleging that the companies using their data had infringed their so-called sui generis right under the Directive. Sui generis literally means ‘of its own kind’ i.e. separate from other intellectual property rights, namely copyright.
The Finnish Vantaan Käräjäoikeus, the Swedish Högsta Domstolen, the Court of Appeal of England and Wales, and the Greek Monomeles Protodikeio Athinon, before which all four cases are pending, referred several questions to the ECJ on the scope and effect of this sui generis right provided for under the Directive. It has proven difficult to interpret the precise extent of the protection of the European database right because of the lack of definitions provided by the Directive. Consequently the outcome of the four references had been eagerly awaited.
The Advocate General’s Opinion
The Advocate-General’s Opinion in all four cases was warmly welcomed by database owners because it supported a broad interpretation of the protection given to databases under the Directive.
The Advocate General seemed to endorse perpetual protection to databases, and maintained relatively low entry requirements. The Opinion clarified what constituted a qualifying database and gave a wide interpretation to the infringement provisions.
The Judgment of the ECJ
However, on 9 November, BHB and Fixtures Marketing, somewhat surprisingly, lost their bid to stop betting firms from using their sports schedules.
In its judgments, the ECJ acknowledged that Article 7(1) of the Directive reserves the protection of the sui generis right to databases which meet a specific criterion, namely to those which show that there has been qualitatively and/or quantitatively a substantial investment in the obtaining, verification or presentation of their contents.
Football Fixtures
However, the Court raised doubts over whether a football fixture list could be defined as a database because professional leagues do not have to make a major investment to compile the information.
The Court held that ‘investment in … the obtaining … of the contents’ of a database must refer to the resources used to seek out existing independent materials and collect them in the database, as opposed to the resources used for the creation as such of independent material which makes up the contents of a database.
As Fixtures Marketing had itself pointed out, the process of finding and collecting the data which make up football fixture listings, is indivisibly linked to the creation of the data, in which the leagues participate directly as those responsible for the organisation of football league fixtures. Obtaining the contents of a football fixture list (the ‘database’) thus does not require any investment independent of that required for the creation of the data contained in that list. The verification of the accuracy of the contents of fixture lists during the season simply involves adapting data in those lists to take account of any postponement of a match or fixture date decided on, by, or in collaboration with the leagues. Such verification cannot be regarded as requiring substantial investment.
Consequently, neither the obtaining, verification nor presentation of the contents of a football fixture demonstrates substantial investment which could justify protection under the sui generis right provided for by the Directive.
Horseracing
On the other hand, there was no dispute that the BHB database did amount to a protected database under the rules, said the judges. But authorisation to use the data would only be required if William Hill was using ‘the whole or a substantial part’ of the contents of the database.
The Court held that ‘acts of extraction’ (transferring the contents of a database to another medium) and ‘acts of re-utilisation’ (making available to the public), of the whole or a substantial part of the contents of a database require permission from the creator of the database. The expression ‘substantial part’, in quantitative terms, of the contents of a database, refers to the volume of data extracted from the database and/or re-utilised, and must be assessed in relation to the total volume of the contents of the database. In qualitative terms it refers to the scale of the investment in the obtaining, verification and presentation of the contents extracted or re-utilised.
The Court observed that the resources used by BHB, in the course of organising races, to decide the date, the time, the place and or name of the race and the horses running in it, represented investment in the creation of the materials contained in its database. It added that the verification prior to the entry of a horse on a list takes place at the stage of the creation of the data and could not, therefore, be considered to constitute investment in the verification of the contents of the database. Since the materials extracted and re-utilised by William Hill did not require investment by BHB which was independent of the resources required for their creation, those materials did not constitute a substantial part of the contents of the BHB database.
Consequently, the Court held that William Hill had only used insubstantial parts of BHB’s data and the collection of fixtures did not therefore seriously prejudice the investment made by BHB in the creation of its database. It also decided that William Hill had arranged the data in a different way.
Conclusion
The ECJ has construed the Directive narrowly, and by doing so, has restricted quite substantially those works that are protected as databases under the Directive.
It is now clear that in order to be eligible for protection under the Directive a database owner must prove that ‘substantial investment’ was made in the relevant information and in order to fall foul of the Directive the information taken by an alleged infringer must form a ‘substantial part’ of the database, both quantitatively and qualitatively.
The ruling throws doubt on future data licensing income from the licensing of rights in sports fixtures and it is likely that millions of pounds of annual revenues could be lost to the Premier League, the Football League and the BHB. It may however still be possible to seek protection through copyright legislation.
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.
