European Union Database Developments: An Update on the Status of Intellectual Property Protections for Factual Compilations
Randal C. Picker
Leffmann Professor of Commercial
Law, The University of Chicago Law School; Consultant to Sidley Austin Brown & Wood
Alan Charles Raul
Partner, Sidley Austin Brown & Wood
On July 31st, a British appellate court issued a decision addressing database rights in the European Union. This is one of the
first decisions examining the terms of the European database directive issued
in March, 1996 and that went effective as of January 1, 1998. The decision is
important both for its status within the European Union and for the insight it
might offer for pending database legislation in the United States. The pending legislation would accord some
intellectual property protections to factual compilations that are not
sufficiently “original” to qualify for copyright protection.
William Hill is a large United Kingdom bookmaker, with over 1500 licensed betting offices, plus telephone betting.
With the rise of the Internet, Hill naturally moved into online bookmaking.
Much information is naturally displayed on its website, so that potential
bettors can make their choices.
The appellate court explained the Directive as follows:
At this point it is convenient to refer to the material provisions of the Directive. The mischief which it was designed to
meet is clearly set out in the Recitals: databases were not sufficiently
protected in all member states by existing legislation (Recital (1)), there
were differences in that protection between member states which distorted the
functioning of the internal market (Recitals (2) (4)), and the making of
databases involved the investment of considerable human, technical and financial
resources, which investment required protection against the unauthorised
extraction or reutilisation of the whole or a substantial part of the contents
of the database (Recitals (6) (8), (38) (41)). The Directive’s intention was to
give protection to the structure of the database by copyright and to its
contents against unauthorised extraction and reutilisation or both by the new
right called “the sui generis right” (Recital (58)).
The trial court applied the Directive in favor of the plaintiff, holding that “[d]atabase rights protect the unlicensed taking
and use of information. What William Hill has in mind involves the manipulation
of the same information but its presentation in a different manner …. As long
as substantially the same information is made available on the website, the
same acts of extraction and re-utilization will have taken place.”
Although there was some dispute about this in the case, much of the information displayed by Hill comes from the British
Horseracing Board (“BHB”), the governing authority for the British horseracing
industry. Hill holds licenses, either express or implied, for many uses of the
information, but the BHB contended that the Internet use by Hill exceeded the
scope of the license, and in turn violated the BHB’s database rights as
implemented in the European database directive as enacted into British law.
Standard informational databases are situated in a tricky spot in property law. An enormous amount of work can be required to
assemble and verify the information in the database, but once it is there,
copying it is straightforward. In the United States, the leading decision on
the status of these databases is Feist Publications, Inc. v. Rural Telephone Service Co., 499 U.S. 340 (1991). In
that case, the United States Supreme Court ruled that as a matter of federal
constitutional law, Congress could protect works under its copyright powers
only if the work had a sufficient level of originality. The court found that
telephone book at issue in Feist lacked sufficient originality to be protected.
This created a concern among owners of fact-driven databases that they might not enjoy copyright protection. Some of
these issues may be addressed by contract, as seen in the well-known decision
in ProCD, Inc. v. Zeidenberg, 86 F.3d
1447 (7th Cir. 1996). Other aspects may be addressed through old doctrines,
such as the virtual trespass found in eBay, Inc. v. Bidder’s Edge, Inc., 100 F.Supp.2d 1058 (N.D. Calif. 2000).
Legislation has also been introduced in Congress to address these issues, but
passage is uncertain, and Congress would need to act under its Commerce Clause
power, rather than the Copyright clause (due to the lack of originality in
factual compilations). It is certainly possible that the Supreme Court could
ultimately conclude that Congress cannot do under the Commerce Clause
indirectly what it could not do under the Copyright Clause directly.
The database directive from the European Union will give us some sense of the importance of an independent right protecting
databases. That right focuses on extractions of information from qualifying
databases. The directive creates a textured regime, and much of the analysis in
the lower court focused on the particulars of the directive. Although the
appellate court found much of the lower court’s analysis persuasive, the
appellate court ultimately concluded that it should refer the case to the
European Court of Justice.
has been no interpretation of the Directive to date by the European
Court of Justice. Interestingly, the UK courts did not address (because
did not argue) the relevance of the UK regulations implementing the
only the provisions and intentions of the Directive itself were deemed
relevant. The appellate court, however, was clearly influenced by the
defendant’s argument that certain national decisions of other country’s
had construed the Directive and database protections more narrowly than
trial court had. The appellate court stated:
William Hill’s arguments of substance go to whether
the judge correctly interpreted the Directive. The judge has given a wide
meaning to the database right and what it protects. Mr. Platts-Mills says that
the effect of the judge’s judgment is far-reaching and that it is capable of
application to commercial activities far removed from the horserace betting
context with which we are concerned.
Information which might have been thought to have entered the public domain and to be freely usable might prove to be
derived from a database the right in which was protected even though the user
was unaware of that ultimate source and right. He drew our attention to certain
decisions of the courts of other member states, which appear to have adopted a
somewhat narrower approach to database right (notably Fixtures Marketing Ltd. v
AB Svenska Spel, Gotland City Court, 11 April 2000, and in the Swedish Court of
Appeal, 3 May 2001, and NV Holdingmaatschappij de Telegraaf v Nederlandse
Omroep Stichting, Court of Appeal of the Hague, 30 January 2001). He pointed
out that there has as yet been no ruling by the European Court of Justice on
the interpretation of the Directive.
Like the recent decisions in the U.S. in New York Times Co., Inc. v. Tasini, 121
S.Ct. 2381 (2001), Bonneville Intern. Corp. v. Peters, 2001 WL 869625 (E.D. Pa.) and Random House, Inc. v. Rosetta Books LLC, 150 F.Supp.2d 613
(S.D.N.Y. 2001), the William Hill decision in the UK is another case demonstrating the importance of dealing with
Internet issues specifically by contract: if parties license certain uses of
intellectual property but do not address Internet use by contract, Internet
uses may not be deemed included within the license for non-Internet uses no
matter how related or reasonable the Internet use seems to the previously