Database rights – recent judgment from the Court of Appeal

On 13 July 2005 the Court of Appeal gave its judgment in British Horseracing Board v William Hill Organisation Ltd, the first substantive case concerning database rights in the UK. In a unanimous decision, Lord Justices Jacob, Clarke and Pill upheld William Hill's appeal against the High Court's 2001 ruling in favour of the British Horseracing Board (BHB).

Background

BHB is the governing authority of the British horseracing industry. BHB has compiled and maintained a database containing a large amount of information in connection with horseracing, including the names of horses, riders, betting odds and race details. The database costs approximately £4 million per year to run, and BHB licenses the information contained in its database to various third parties. William Hill is not (and never has been) licensed to use BHB's database.

BHB instituted proceedings against William Hill for infringement of its database rights, on the basis that William Hill used information originally deriving from the BHB database for the purposes of its internet betting service. William Hill only used a small part of the information on the BHB database at any one time (although this was the most commercially valuable information), and William Hill arranged BHB's information into a different format.

In 2001 Mr Justice Laddie in the High Court found that William Hill had unlawfully extracted or re-utilised BSB's database contrary to EC Directive 96/9 (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, in July 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 Database Directive had been interpreted in several other Member States.

ECJ decision

The ECJ considered the scope of Article 7(1) of the Database Directive, which states:

Member States shall provide for a right for the maker 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 to prevent extraction and/or re-utilization of the whole or of a substantial part, evaluated qualitatively and/or quantitatively, of the contents of that database.

The right therefore protects databases where there has been substantial investment in obtaining, verifying or presenting the contents of a database. This right can then be used to prevent 'extraction' and 're-utilisation' of a substantial part of a database by third parties. Importantly, the database right may offer protection in circumstances where copyright protection is not available.

The ECJ determined that database right protection should be limited. It made the following points, inter alia, in its judgment of 9 November 2004:

• 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
• 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
• While BHB's database was a protected database under the Database 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.

Court of Appeal decision

The case returned to the Court of Appeal in June 2005. BHB submitted that its database came within the right circumscribed by Article 7(1) of the Database Directive. Unsurprisingly, William Hill objected to BHB's construction.

The Court of Appeal made the following points:

• Despite determined submissions on the part of BHB, the ECJ had not misunderstand the primary facts before it or indulged in an illegitimate fact-finding exercise. Lord Justice Jacob concluded that the ECJ had considered BHB's various activities in a comprehensive manner, and thus did not make its ruling on the basis of an erroneous assumption of fact
• BHB's database contained unique information, being official lists of all declared racing entries. No other person or organisation could go through a similar process to produce the official list of racing entries – that official list could only be prepared by BHB. As such, BHB's published database was not a database of existing independent materials
• Lord Justice Jacob noted that '[so] far as BHB's database consists of the officially identified names of riders and runners, it is not within the sui generis right' comprised in Article 7(1) of the Database Directive. He stated that what is published 'is different in character from a mere list of gathered in information. It is a list of the horses BHB have accepted as qualifying to race – as properly and actually entered'
• Given the ECJ's conclusion, it was unnecessary to examine the further question of whether or not William Hill's activities fell within the meaning of 'extraction and/or re-utilisation… of a substantial part, evaluated qualitatively and/or quantitatively, of the contents of that database'.

Comment

In light of the ECJ's decision on the parameters of database rights under Article 7(1) of the Database Directive, the Court of Appeal was compelled to reverse the High Court's decision in this case, and to overturn the views that it expressed when this matter first came before it in July 2001.

The decision is likely to be met with some concern by many database right owners, though it is potentially beneficial 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.