UK: New ECJ Database Decision

Last Updated: 9 March 2009
Article by Susan Barty and Lucy Kilshaw

The ECJ gave judgment on 5 March 2009 in a further case on database rights in Apis-Hristovich EOOD -v- Lakorda AD, Case C-545/07. Unusually, there was no Advocate General's Opinion preceding the judgment.

The case concerns the extraction of parts of an online legal information and resources database, much of which comprised official public domain material, but which also contained editorial content, translations, links between documents and other information not generally accessible to the public.

The ECJ confirms that a wide view of extraction must be taken, in particular stating that the concept of extraction is independent of the defendant's objectives, of any modifications he makes to the material extracted and of any differences in the structural organisation of the parties' respective databases.

The ECJ also confirmed its previous case law, being the British Horseracing Board -v- William Hill case, regarding the need to analyse the degree of investment in obtaining, verifying and presenting the contents of a database when assessing whether a substantial part, measured quantitatively and/or qualitatively, has been extracted. Therefore, the fact that some material used was not generally accessible to the public could, depending on the effort made in collating this material, affect whether the material would be regarded as comprising a substantial part on a qualitative basis. Equally, where materials are accessible to the public, such as official legislation, there still needs to be an assessment as to whether extraction or re-utilisation of a substantial part has occurred, measured quantitatively and/or qualitatively, depending on whether obtaining, verifying or presenting the material represented a substantial human, technical or financial investment.

However, the ECJ made clear that the nature of an underlying computer program used to manage two electronic databases was not a factor in assessing whether extraction of the database had taken place.

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Database rights - the background

Database rights have now been protected under European law for over 10 years but have been the subject of much uncertainty. The previous cases at European level have been British Horseracing Board, Case C-203/02, Fixtures Marketing, Case C-444/02 (and others) and Directmedia Publishing, Case C-304/07, reported last October.

A database is widely defined under Directive 96/9/EC 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". Protection under database right is granted where there has been a substantial investment in obtaining, verifying or presenting the contents of a database so as to prevent an extraction and/or re-utilisation by third parties of a substantial part of the database, measured either quantitatively or qualitatively.

The Court made clear in British Horseracing Board [please click here for our previous Law-Now on this case] that the ambit of protection for database rights was limited to the investment in obtaining, verifying or presenting data, and did not protect the creation of data itself. It also refused to take into account the commercial value of data in assessing whether a substantial part had been extracted or re-utilised, even when measuring substantiality on a qualitative basis. For these reasons the ambit of database right protection was, following this case, narrower than had been widely assumed, including by the English High Court which had originally found in favour of the British Horseracing Board. Following the ECJ's decision in 2004 the Court of Appeal was forced to overturn the original High Court decision.

Database right owners found British Horseracing Board very disappointing. However, since then, on other aspects of interpretation of database right law, the ECJ's approach has been to take a relatively generous view towards rights owners.

In the Directmedia case [please click here for our previous Law-Now on this case] the ECJ made clear that physical copying was not necessary in order to infringe. The question referred was whether an extraction occurred when a transfer of data followed individual assessments resulting from repeated consultation of the database, or whether extraction presupposes the physical copying of data. Directmedia had used as a point of reference a list of 1,100 poems created by a University professor. It examined each poem, rejecting some and adding others in order to make its own list, with the net result that its list of 1,000 poems used 856 of the poems on the University's list. The ECJ decided that physical copying was not necessary. It was also immaterial that the transfer from the original database may lead to an arrangement which is different from the original. Further, the method of transfer was irrelevant: it could not be argued that only acts consisting of a mechanical reproduction by means of a standard copy/paste process could be an extraction. The Court also reaffirmed the approach in British Horseracing Board concerning investment.

The Apis-Hristovich case

The latest case concerned a Bulgarian legal resources database created by Apis, made up of a number of modules. Some data comprised publicly available documents such as legislation; other data comprised court decisions which were not routinely publicly available. There were also legal definitions, references to translations, hyperlinks, editorial content and other original features. Lakorda, the defendant (established by former employees of Apis), was accused of extracting and re-using in its own product a substantial amount of the Apis database. In relation to one particular module of the Apis database, 82.5% of the total number of documents had been used by Lakorda. Further Lakorda's database contained many features and editorial content which was the same as that contained in the Apis database. Lakorda denied infringement and claimed its own substantial investment in its database, including the use of an original computer programme to manage the database and use of a different structure and a unique method of classification. Because of the use of publicly available sources, it argued that there was bound to be great similarity in the content of the respective databases.

A number of questions were referred by the Bulgarian national court which the ECJ considered in two sections: firstly questions relating to the concept of "extraction" and secondly, questions relating to the meaning of a "substantial part".

Extraction

Here the Court found as follows:

The distinction between "permanent transfer" and "temporary transfer" in Article 7 of Directive 96/9 is based on the length of time during which materials extracted from a protected database are stored in a medium other than that database. (In fact, as infringement covers both permanent and temporary transfer this finding does not have much practical effect.)

The point in time at which there is an extraction from an electronically accessible database is when the materials which are transferred are stored in a medium other than that database.

The concept of extraction is independent of (i) the objective pursued by the transferor; (ii) any modifications he may make to the contents of the materials transferred; and (iii) any differences in the structural organisation of the databases concerned.
This is one of the more important findings and consolidates comments made in previous case law. The fact that additional work is carried out to the materials extracted and the way they are presented in a subsequent database, as will often be the case, is not relevant to whether there has been an extraction in the first place. However, the Court acknowledges that the purpose of the transferor, for example, in creating a competing database, could be relevant to the measure of damages.

The fact that the physical and technical characteristics present in the contents of a protected database made by one person also appear in the contents of a database made by another person may be interpreted as evidence of extraction, unless the coincidence can be explained by other factors, for example, the possible use of identical source materials.

The fact that materials obtained by the maker of a database from sources not accessible to the public also appear in a database made by another person is not sufficient, in itself, to prove the existence of such extraction, but can constitute circumstantial evidence of extraction.

The nature of the computer program used to manage two electronic databases is not a factor in assessing whether extraction has taken place.

This finding is not surprising, but confirms that the underlying technology used to support a database is a separate issue which will not govern whether extraction from the database has occurred.

What is a substantial part?

The Court found:

Where a database is composed of separate modules, the volume of the materials allegedly extracted and/or re-utilised from one of those modules must be compared with the total contents of that module, if that individual module can of itself constitute a database. If not, the comparison must be made between the volume of the materials allegedly extracted and/or re-utilised from the various modules of that database and its total contents.

This will be a question of fact, but the definition of a database is so wide that a module is likely to capable of protection separately in many cases, provided that sufficient investment can be demonstrated. The ECJ notes that the mere fact that modules may be marketed separately as independent products is not decisive, as the definition of a database is not based on commercial considerations but on legal conditions.

The fact that the materials allegedly extracted and/or re-utilised from a database were obtained by the maker of that database from sources not accessible to the public may, according to the amount of human, technical and/or financial resources used to collect the materials, affect the classification of those materials as a substantial part, evaluated qualitatively, of the contents of the database concerned.

The Court here is making the point that the more effort and investment involved in collating the part of the database taken, the more likely it is to be found that a substantial part has been extracted. The intrinsic value of the material is not a relevant factor.

The fact that part of the materials contained in a database are official and accessible to the public does not relieve the national court of an obligation (in assessing whether there has been extraction and/or re-utilisation of a substantial part) to verify whether the materials allegedly extracted and/or re-utilised constitute a substantial part, evaluated quantitatively or qualitatively, inasmuch as their obtaining, verification and presentation involved a substantial human, technical or financial investment.

Here the Court appears to be saying that the level of investment may or may not be sufficient, depending on what has been done with the publicly accessible materials, but that the same analysis must be carried out in determining if there has been an infringement. It is not relevant that the materials (here, copies of Bulgarian legislation) may not be protected by copyright, as argued here by Lakorda.

This decision should be welcomed by database right owners. While the concept of "substantial part" is still restrained by the investment criteria set out in the British Horseracing Board case, the ECJ has at least made clear, as it did in the Directmedia case, that a wide interpretation should be applied to the concept of extraction.

For a copy of this judgement, please click here.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 06/03/2009.

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