Database rights – surprising judgment from the European Court of Justice

ECJ Judgments on Database Rights dated 9 November 2004

The ECJ has given judgment in a case referred by the English Court of Appeal, British Horse Racing Board v William Hill and also in three cases brought by Fixtures Marketing Limited referred from the Finnish, Swedish and Greek Courts relating to football fixture lists.

The cases concerned the interpretation of Directive 96/9/EC relating to the protection of databases, which granted a new stand alone database right quite separate from copyright. The Directive gives a "database right" to the maker of a database where there has been a substantial investment in the obtaining, verification or presentation of the contents of the database. This right can then be used to prevent "extraction" and "re-utilisation" of a substantial part of a database by third parties.

The British Horseracing Board ("BHB") compiled and maintained a database containing a large amount of information in connection with horseracing, including the names of horses, riders and race details, the running of which cost approximately £4m per year. This information was licensed to various third parties. William Hill used information originally deriving from the BHB database for the purposes of an Internet site, which gave details of current races.

In the High Court in 2001 before Mr Justice Laddie it was found that William Hill had unlawfully extracted or re-utilised contrary to the database Directive. The fact that the information was presented by William Hill in a different way from the presentation used on the BHB database was irrelevant. On appeal, also in 2001, the Court of Appeal agreed with the High Court but referred the case to the ECJ following some uncertainty as to the way in which the Directive had been interpreted in some other Member States.

The Advocate General's Opinion was published earlier this year, and while somewhat difficult to follow, did not seem to deviate greatly from the general findings of the English courts. However, in its judgment, the ECJ has made clear that database right protection should be limited. It has effectively contradicted the findings of the High Court and the Court of Appeal, and in such a way that it will be extremely difficult for the English Court to do anything other than change their previous stance.

The main points of the judgments are as follows:

• A "database" is any collection of works, data or other material, separable from one another without the value of their contents being affected, including a method or system for the retrieval of each of its constituent materials.
• However the "database right" is reserved for databases in which there has been, qualitatively or quantitatively, a substantial investment in the obtaining, verification or presentation of content.
• The concept of "investment" refers to resources used to seek out existing materials, collect them, verify them and present them in a database. It does not cover resources used for the creation of the materials which make up the contents of the database.
• The fact that the maker of the database is also the creator of the materials contained in it does not exclude the database from protection, provided that the obtaining, verification and presentation requires substantial investment in quantitative or qualitative terms which is distinct from the resources used to create the materials.
• In relation to a work such as a football fixture list, the obtaining and collection of data which makes up the list and even subsequent verification, does not require any particular effort over and above the creation of the data itself, to which it is inextricably linked. Therefore there should be no database right in football fixture lists.
• While the database was a protected database under the Directive, so far as the data used by William Hill was concerned BHB's activities did not require investment which was independent of the resources used by them to create that data in the first instance. Therefore, a third party will not infringe if the materials which they extract and/or re-utilise did not require investment by the database owner which was independent of the investment required for the creation of those materials.
• In considering whether a substantial part of a database has been taken, both quantitative and qualitative tests must be used. In assessing quality, the purpose of the third party's use of the data and the intrinsic value of the data are irrelevant. The important factor is the scale of the relevant investment in that part of the database.
• Although the Directive provides that extraction or re-utilisation may take place by repeated and systematic extraction or re-utilisation of insubstantial parts (this being deemed use of a substantial part), a third party will not infringe unless they seriously prejudice the investment made by the database owner in the database. This is unlikely if they will not ever be making available to the public the whole or substantial part of the contents of the complete database.
• Neither extraction nor re-utilisation necessarily involve direct access to the database. Either may involve indirect use of data taken from other sources.

These judgments are likely to be highly controversial and met with dismay by many database right owners, although they are potentially useful for database users. In particular, the distinction between creation of the content of the database and the investment in the collection, verification and presentation of contents seems artificial and difficult to apply in practice. Also the interpretation of the "repeated and systematic" provision seems very odd. Here William Hill was taking the most commercially valuable data (ie. that day's race data), albeit a small part of the complete database. On the ECJ's view the purpose for which the information was used is irrelevant and because William Hill did not intend to make available the whole or a substantial part, this was not deemed to damage BHB's interests as database owner.

The judgments had been long awaited and, it was assumed, would provide confirmation of the English law position, as already decided by the High Court and the Court of Appeal. In the event, unfortunately, further legal confusion is inevitable.