Copyright and Rights in databases Regulations 1997.
The claimants, DRSP Holdings Ltd and DRSP Ltd, operate a claims management business in respect of consumer claims relating to mis-sold personal protection insurance policies and self-invested personal pensions.
The first defendant, Mr O'Connor, was Operations Director at DRSP Ltd from October 2013 until February 2018 when he ceased to be an employee of DRSP and became a consultant to the company, acting on behalf of the third defendant, Octax Ltd, which was a joint venture between Mr O'Connor and his wife. A consultancy agreement was entered into between DRSP and Octax pursuant to which Octax, through Mr O'Connor, would provide consultancy services to DRSP.
The claimants issued proceedings against the defendants in relation to the misuse of data contained in a bespoke database called "Slate" compiled and used by the claimants in the running of their business. The claim was subsequently reshaped to become a more technical case based on alleged infringement of the claimants' database rights in Slate, as well as misuse of confidential information and breach of fiduciary duty.
The defendants challenged the existence of the database right claimed, denied that there had been any extraction or re-utilisation of data from Slate, and asserted that any extraction was, in any event, with DRSP's consent.
His Honour Judge Cawson QC, sitting as a Judge of the High Court, observed that to establish the subsistence of database right in Slate, the question was whether there had been substantial investment in "obtaining", "verifying" or "presenting" the contents of the database such as to satisfy Regulation 13 of the Database Regulations.
It was not in dispute that investment in the creation of data is not relevant investment for the subsistence of database right. As Lord Justice Jacobs said in Football Dataco v Sporttrader GmbH  FSR 30: "investment in creating data was not the right kind of investment. So that if only that kind of investment is involved in the creation of a database, there is no sui generis right in it".
Further, Mr Cawson said, Case C-203/02 BHB v William Hill  RPC 13 was authority for the proposition that investment in "obtaining" the contents of the database extends to the resources used to seek out existing independent materials and collect them in a database, as opposed to using resources for the creation of such independent materials.
In this respect, the claimants relied on the investment in procuring customer data from third parties and investment in obtaining data from enquiries to its website. They also relied on investment in identifying whether customers were sold PPI, and so had a potential PPI claim, and in obtaining, via subject access data requests, the details of their bank accounts or policies if they had forgotten them. The claimants maintained that this did not involve investment in creating data; it involved using resources to seek out existing independent materials and collect them in a database.
The defendants argued that the case concerned investment in the creation of data, but they also queried how cases ought to be dealt with where a database has been composed from bought-in data. They submitted that where bought-in data comes in "database form", there will not be the relevant investment if the data is merely inserted into the database unless substantial investment has been put into processing the data so that it meets the organisational requirements of the database, rather than simply spending money on data that is then automatically uploaded or migrated into the database. If it were otherwise, they said, the purchaser of a database would become the owner of a fresh database right in the database merely because it had "invested" by committing the funds necessary to make the purchase.
Mr Cawson noted that, in Football Dataco, Jacobs LJ said that the inability to rely on investment in the creation of data contained in a database for the purposes of establishing subsistence of database right did not extend to investment in ascertaining, measuring or recording pre-existing facts. Therefore, investment in ascertaining, measuring or recording pre-existing facts can constitute investment in obtaining or verifying the contents of a database.
In Mr Cawson's view, the claimants' evidence went beyond simply showing that DRSP had purchased leads which were uploaded to a database by some automatic process. The evidence supported the fact that the claimants had invested significant sums in obtaining data, paying fees for purchased-in data and also incurring expenditure on generating home-grown leads through its website, as well as establishing whether PPI and other claims existed by a closer examination of the background facts.
In Mr Cawson's view, this investment was not concerned with the creation of data, but with the ascertaining of existing facts on the identity of individuals who had PPI or pensions, and who might have claims, and the facts behind those claims so as to obtain the contents of the Slate database, which had been developed to collect and record this material, and which allowed data to be processed in an organised way such that leads could be chased up and claims pursued.
Therefore, there had been substantial investment on the part of DRSP in obtaining the contents of the Slate database, sufficient to find a database right.
Mr Cawson observed that BHB v William Hill showed that investment in verification of the contents of a database essentially involves investment of resources with a view to ensuring the reliability of the materials and monitoring their accuracy.
Although the defendants queried the extent of the verification that might have occurred, the claimants gave substantially unchallenged evidence of substantial investment in the verification of the accuracy of names, addresses and contact details in the database and in checking whether a PPI claim might be available. There was evidence that DRSP also paid a third party to check on the validity of telephone numbers, which Mr Cawson said was expenditure of the sort that would count for this purpose.
Mr Cawson said that Case C-46/02 Fixtures Marketing Ltd v Oy Veikkaus Ab EU:C:2004:694 showed that the investment in "presentation" of the contents of a database concerned the resources used for the purposes of giving the database its function of processing information, namely the resources used for the "systematic or methodical" arrangement of the materials and their accessibility. This would, Mr Cawson said, include investment in the creation of a bespoke database system such as Slate, given that the system and the software that allowed it to operate allowed the data added to the database to be processed and the data within the database to be arranged in a systematic way, if not also a methodical way.
The claimants' unchallenged evidence was that the development costs incurred in respect of Slate included £346,683 in respect of software development. Mr Cawson held that this was investment incurred in the creation of the bespoke Slate database and therefore represented substantial investment in presenting the Slate database sufficient in itself to give rise to database right in Slate.
Mr Cawson was therefore satisfied that the claimants had established that database right subsisted in the Slate database.
The defendants said that when Mr O'Connor became a consultant to DRSP, he and other Octax employees were given access to Slate pursuant to the consultancy agreement so that Octax could continue to work with DRSP. However, the claimants said that access was granted on a limited basis only and that Mr O'Connor had gone beyond such limits, resulting in unlawful extraction from the database.
On the facts, Mr Cawson found that if Mr O'Connor and Octax were not authorised to do what they did, then their actions amounted to extraction. However, Mr Cawson also found that Mr O'Connor and Octax had express authority and consent for their actions from DRSP. Their actions fell within the requisite authority and consent so long as it reasonably served to further the interests of DRSP. Accordingly, there was no infringement of the claimants' database right. This conclusion meant that the other claims fell away. (DSRP Holdings Ltd v Thomas O'Connor  EWHC 626 (Ch) (19 March 2021) — to read the judgment in full, click here).
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