Database Protection The Database Maker Right Dr Guido Westkamp

Background to Database Protection Copyright Systems (UK; USA) – protection for compilations Sweden; Norway; Denmark – catalogue rule Netherlands – “geschriftenbescherming” Unfair Competition / Misappropriation Different standards of protection (UK vs. Germany) 1988 EC Green Paper recommends harmonisation First proposal 1993  copyright plus ‘unfair extraction right’

US Position – H.R. 3261 SEC. 3. PROHIBITION AGAINST MISAPPROPRIATION OF 22 DATABASES. 23 (a) LIABILITY Any person who makes available in 24 commerce to others a quantitatively substantial part of the 25 information in a database generated, gathered, or maintained by another person, knowing that such making available in commerce is without the authorization of that other person (including a successor in interest) or that other per- son's licensee, when acting within the scope of its license, shall be liable for the remedies set forth in section 7 if– (1) the database was generated, gathered, or 7 maintained through a substantial expenditure of financial resources or time; (2) the unauthorized making available in commerce occurs in a time sensitive manner and inflicts injury on the database or a product or service offering 12 access to multiple databases; and (3) the ability of other parties to free ride on the efforts of the plaintiff would so reduce the incentive to produce or make available the database or the product or service that its existence or quality would be substantially threatened.

US Position – H.R. 3261 (b) INJURY.--For purposes of subsection (a), the term ``inflicts an injury'' means serving as a functional equivalent in the same market as the database in a manner that causes the displacement, or the disruption of the sources, of sales, licenses, advertising, or other revenue. (c) TIME SENSITIVE.--In determining whether an unauthorized making available in commerce occurs in a time sensitive manner, the court shall consider the temporal (b) INJURY.--For purposes of subsection (a), the term 19 ``inflicts an injury'' means serving as a functional equivalent in the same market as the database in a manner that 21 causes the displacement, or the disruption of the sources, 22 of sales, licenses, advertising, or other revenue. (c) TIME SENSITIVE.--In determining whether an un- 24 authorized making available in commerce occurs in a time 25 sensitive manner, the court shall consider the temporal value of the information in the database, within the context of the industry sector involved

EU Database Protection Directive 9/96 – background and aims: Harmonisation between Copyright and Author’s Right Systems Creation of High Level of Protection Background: Feist (1991)

US position 2) COMMERCE.--The term ``commerce'' means all commerce which may be lawfully regulated by the Congress. (3) COMPILATION.--The term ``compilation'' means a work formed by the collection and assembling of preexisting materials or of data that are selected, coordinated, or arranged in such a way that the resulting work as a whole constitutes an original work 2 of authorship. The term ``compilation'' includes collective works. (4) DATABASE (A) IN GENERAL.– […] the term ``database'' means a collection of a large number of discrete items of information produced for the purpose of bringing such discrete items of information together in one place or through one source so that persons may access them.

EU Database Directive Creation of two tier system “sui generis” right as IP right?? Important: Definition of database (for purposes of both copyright and SGR) Collection Indepnedet elements Indivdiually accessible Copyright  originality is selection and /or arrangement of items SGR – an IP right? In what?

Article 7 Object of protection 1. 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. 2. For the purposes of this Chapter: (a) 'extraction` shall mean the permanent or temporary transfer of all or a substantial part of the contents of a database to another medium by any means or in any form; (b) 're-utilization` shall mean any form of making available to the public all or a substantial part of the contents of a database by the distribution of copies, by renting, by on-line or other forms of transmission. The first sale of a copy of a database within the Community by the rightholder or with his consent shall exhaust the right to control resale of that copy within the Community; Public lending is not an act of extraction or re-utilization. 3. The right referred to in paragraph 1 may be transferred, assigned or granted under contractual licence. 4. The right provided for in paragraph 1 shall apply irrespective of the eligibility of that database for protection by copyright or by other rights. Moreover, it shall apply irrespective of eligibility of the contents of that database for protection by copyright or by other rights. Protection of databases under the right provided for in paragraph 1 shall be without prejudice to rights existing in respect of their contents. 5. The repeated and systematic extraction and/or re-utilization of insubstantial parts of the contents of the database implying acts which conflict with a normal exploitation of that database or which unreasonably prejudice the legitimate interests of the maker of the database shall not be permitted.

Judicial Freedom of Movement ? Relationship between object of protection and underlying rationale Under general IP law, usually assumptions apply as to protectability for enlisted subject matter Basic problem: uncertainty as to (1) object of protection and (2) meaning of What constitutes a database? What is substantial investment What is “substantial taking” (obtaining, verification or presentation of data) How do the individual elements relate to each other?

Database Protection before Courts “First wave” disputes – No true resemblance of “Feist” situation In a number of cases, concerns the taking of insubstantial parts over a period of time / use of hyperlinks Typical judicial assessment – reflecting “rigid” dogmatic IP/Copyright approach Database as Subject Matter  Assumption as to Substantial Investment Investment = primarily obtaining, but also presenting data But value or extent of actual investment not taken into account for determining infringement

Database Infringement Taking of substantial part Evaluated EITHER qualitatively OR quantitatively Effect: A Property Right in Data: With respect to the data taken rather than the investment Cf. approach by UK courts – substantial taking is determined primarily by the quality of the portion taken (i.e. the copyrightable expression). Competitive relationship taken into account.

Object of Infringement ECJ, British Horseracing v William Hill: protects obtaining of data not creation BGH, Request for Preminary Ruling to ECJ (pending) Professor P has collected list of poem headings X has taken these headings to be used in different compilation Question  is it a requirement under Art. 7 that copying from database is proven, or do rights subsist in the content as such?

Types of Infringement Wide coverage Consequences: OR Extraction (copying – includes transient copies; RAM- copies) Re-utilisation – includes making available No need for technical copying (ECJ Directmedia 2008) Consequences: Quantity: to be evaluated by reference to the amount of data and forces to set absolute thresholds OR Quality: Quality of information? (“most recent data”). Dangerous approach – likely to sanction the sheer possession of data once third party expresses an interest in access

Article 7 (5) Consequences for Article 7 (5): Repeated and systematic extraction Repeated: more than once? Systematic: use of any technical device sufficient (i.e. search engines) Legitimate interest – interest in not having data taken away? Interest in potential license fees? (circular argument) Causes specific problems in relation to dynamic databases – The smaller the original database is, the less likely infringement can be affirmed.

Consequences Redundancy of the entire IP spectrum (by creating a notion of exclusive rights in data/information for the sheer fact of some investment)

Approximation to Misappropriation ECJ – rationale for protection is substantial investment and this must be reflected when assessing infringement No “spin off” efforts – distinction between markets Quality and Quantity to be taken into account Open issues: exact consequences for relationship between investment and taking

Investment Problem (1): the role of the market Problem (2): the meaning of “repeated and systematic” taking

Investment Example: BHB v William Hill [2001] AllER 1 Existing license for satellite transmission License covered use in William Hill outlets on TV screens Use of data on internet web site not licensed Substantial taking – “databaseness” not necessary – but extraction and re-utilisation of data – some investment in verifying etc. – taking of data from entire database amounts to quantitatively substantial taking – taking of recent data = qualitative substantial taking – but each portion taken (per week) insubstantial – legitimate interest = potential license fees

New” approach: investment (yes) – infringing act (yes, taking still present) – nexus between investment and taking Taking must refer to a portion of the database which reflects a substantial investment This excludes an approach purely based on quality OR quantity If substantial investment has preceded, substantial taking is to be evaluated according to the key rationale – [at least] jeopardy for the investment .

. Problem: definition of investment  level of competition (guidance: “Feist” scenario) and issues such as markets (actual or reserved), goodwill created, proximity of markets. More difficult to maintain in relation to harmonisation (common lowest denominator solution easier to apply; move towards unfair competition notion will cause disparate judicial responses, according to individual member states notions of unfair competition.

. Advantages: level of investment determines scope of public domain information In relation to dynamic databases, the complexity is reduced because the notion of a database is rather irrelevant Also clarifies the status of Article 7 (5) – “legitimate interest”  Effectively not an IP right

Readings Westkamp [2003] IIC Derclaye [2005] IIC 2 Derclaye [2005] European Law Review 420 Please see also collection of database decisions under http://www.ivir.nl/files/database/