Protection of Databases

March 30, 2009

Directive 96/9/EC of the European Parliament and of the Council on the legal protection of databases has been in force for over ten years.  The European Court of Justice handed down important rulings on the interpretation of this Directive in four cases in 2004 in The British Horseracing Board Ltd & Others v William Hill (Case C-203/02) and three other cases involving Fixtures Marketing Ltd, a company that grants licences for football fixtures (Cases C-338/02, C-444/02 and C-46/02). 

The main point arising from the rulings in the BHB and Fixtures Marketing cases was that the ECJ set a high hurdle for databases to be protected under the sui generis right created under the Directive.  For example, although the British Horseracing Board spent millions of pounds a year gathering horseracing data for its database, the ECJ took the view that BHB’s investment related to the creation of racing data, and not the database and, therefore, BHB’s database did not benefit from sui generis protection.

There has been a dearth of cases after 2004, perhaps attributable in part to the high hurdle for sui generis protection set by the ECJ in those first cases.  It is, therefore, notable that the ECJ has ruled on two database cases in the past six months.  The first judgment was handed down on 9 October 2008 in Directmedia Publishing GmbH v Albert-Ludwigs-Universität Freiburg (Case C-304/07) and the other on 5 March 2009 in Apis-Hristovich EOOD v Lakorda AD (Case C-545/07). 

The Directmedia Case

The Directmedia case concerned a database compiled by a German university which contained information about poems written between 1730 and 1900.  Directmedia Publishing GmbH admitted to having used the university’s database to compile a CD-ROM of poems, but said that it took the actual verse texts from its own digital resources and dated the poems independently.  Directmedia argued that it used the university’s database only for reference and that it had applied additional selection criteria, such as whether individual poems were referred to in literary encyclopaedias. 

‘Extraction’ explained in Directmedia case

The main issue in the Directmedia case was whether data can be deemed to be ‘extracted’ from a database (an act which is prohibited without permission of the rights owner) if the data is individually assessed before being used, or whether it only covers direct copying of the data. 

According to the Court, the decisive criterion was the existence of an act of ‘transfer’ of all or part of the contents of a database to another medium, whether of the same or a different nature as the medium of that database.  Such a transfer implies that all or part of the contents of a database are to be found in a medium other than that of the original database.

The ECJ went on to state in Directmedia that it is immaterial whether the transfer is based on a technical process of copying the contents of a protected database, or on a simple manual process, or that the transfer of the contents of a protected database might lead to a different arrangement of the elements concerned.

The ECJ in Directmedia concluded by ruling that the transfer of material from a protected database to another database following an on-screen consultation of the first database and an individual assessment of the material contained in that first database was capable of constituting an ‘extraction’, within the meaning of Article 7 of the Directive.  It was for the referring court to ascertain whether the operation undertaken by Directmedia was prohibited as amounting to an extraction of a substantial part, evaluated qualitatively or quantitatively, of the contents of the university’s database, or to extractions of insubstantial parts which, by their repeated and systematic nature, would have resulted in the reconstruction of a substantial part of those contents under Article 7(1) and (5) of the Directive.

The Apis Case

The Apis case, the latest database case to be considered by the ECJ, concerned a claim for infringement of sui generis rights by Apis-Hristovich EOOD.  Apis alleged that its competitor, Lakorda, had copied a vast amount of material from two modules forming part of Apis’s general legal information system when producing a competing system, including 2,516 unpublished judicial decisions which were not publicly available.  Apis claimed the modules also shared common features, such as references to translations of documents into English, commands and hyperlinks. 

Lakorda denied infringement, saying it had created its competing system independently and stressing that its modules had a fundamentally different structure to those of Apis.  The Sofia gradski sad (Sofia City Court) decided to stay the case and seek guidance from the ECJ on the interpretation of certain provisions in the Directive.

Extraction explained in Apis

Several of the questions raised by the Sofia City Court concerned the concept of ‘extraction’ in Article 7. 

Firstly, it asked for clarification of the terms ‘temporary’ and ‘permanent’ transfer.  The ECJ ruled that there is permanent transfer when materials are stored in a permanent form on a medium other than the original database, whereas the transfer is temporary if the materials are stored for a limited period on another medium, such as the operating memory of a computer. 

The ECJ noted that the reason that Article 7 includes temporary transfers was to exclude a form of de minimis rule.  It also noted that some member states might consider that the existence of a permanent or a temporary transfer might be relevant to assessing the gravity of the infringement of the sui generis right or the scope of the reparable damage connected with such an infringement. 

The ECJ noted that, if physical and technical characteristics present in the contents of a database also appear in the contents of another database (such as command fields and hyperlinks), this may indicate the existence of a transfer between the two databases and, therefore, an extraction, but it is for the national court to assess whether this coincidence can be explained by other factors.

As for where materials obtained by the database maker from sources not available to the public also appear in the defendant’s database (such as unpublished legal decisions in the Apis case), the ECJ commented that this may constitute circumstantial evidence of extraction, but it is not sufficient in itself to prove that there has been a transfer from the first database to the second, given that the defendant may be able to prove it obtained those materials independently.

The ECJ also ruled that the fact that the defendant used an original software program to manage his database did not exclude the possibility that the presence of all or part of the materials appearing in the defendant’s database was due to an unauthorised transfer of that material from the protected database. 

The ECJ in Apis also set out a number of factors that are irrelevant when considering whether there has been an extraction, including:
• whether the transfer was temporary or permanent
• the objective of the transfer (such as whether it was done to create a competing database) 
• the nature of the medium into which the content was transferred
• whether or not the new medium has a different arrangement or organisational structure to that in the original database.

Quantitative evaluation of substantial part

The Sofia City Court also asked the ECJ for guidance on how to decide whether a substantial part of the database had been extracted and/or re-utilised from a quantitative viewpoint when only two modules out of a larger system were alleged to have been copied. 

The ECJ held that, where a body of materials consists of several separate modules, it is necessary first to consider whether the module itself constitutes a database and is entitled to protection by the sui generis right in itself.  If it is, the volume of materials allegedly extracted and/or re-utilised from the module concerned must be compared with the total contents solely of that module.  The ECJ noted that the fact that the various modules of one system were marketed separately was not, in itself, sufficient to give rise to protection by the sui generis right.  The relevant factor was whether the module met the conditions laid down in Articles 1(2) and 7(1) of the Directive. 

If the module is not entitled to sui generis protection in its own right, but only as part of a larger body of materials, the ECJ ruled that the comparison must be made between the volume of materials extracted and/or re-utilised from that module and any other modules and the total content of that body of materials.

Qualitative evaluation of substantial part

The ECJ in BHB had already held that a quantitatively negligible part of the contents of a database may represent, in terms of obtaining, verification or presentation, significant human, technical or financial investment and thus be eligible for sui generis protection as a qualitatively substantial part.

The Sofia City Court asked for further clarification as to whether it was relevant when considering whether material forms a substantive part evaluated qualitatively that certain material was not publicly available, such as the unpublished judgments in the Apis database.  The ECJ commented that the level of human, technical and/or financial resources deployed in collecting these materials may affect the assessment of whether there had been a substantial investment in obtaining the material and consequently influence the classification of the material as a substantial part, evaluated qualitatively, of the contents of the database concerned.

Publicly accessible material

Another issue raised by the Sofia City Court is that much of the content of the Apis database alleged to have been copied related to publicly accessible documents, including legislation adopted by executive State bodies, their official translations and case law.  The ECJ in Apis noted that the court in Fixtures Marketing had adopted a broad definition of a database and concluded that official documents such as those at issue in Apis which were not eligible for copyright protection could benefit from the sui generis database right provided that the conditions of Article 7(1) were met.

Impact of the Rulings

The Apis case has helped database makers by confirming that the term ‘database’ has a broad definition and can include a collection of documents which are not eligible for copyright protection.  However, database makers may still struggle to meet the test for obtaining sui generis protection under the Directive following the BHB and Fixtures Marketing cases in 2004.

The recent ECJ rulings in Directmedia and Apis mean that, once the test for sui generis protection is met, database owners should be able to prevent unauthorised use of their databases because the ECJ has taken a broad view of what might infringe.  In particular, the ECJ has adopted a very wide interpretation of ‘extraction’ of data. 

Also, by confirming that sui generis protection may arise in a module of a larger database, the ECJ in Apis has provided database makers with the opportunity to allege infringement of not only a whole database but also a discrete part of a database.  In certain circumstances, it may be easier for a claimant to restrict a claim to infringement of part of a database, for example, where only specific data from one module forming part of a large database has been extracted and/or re-utilised, and it can be proved that a substantial investment was made in obtaining, verifying or presenting that module.

Ultimately it is up to the national courts to apply the guidelines in these rulings to the facts.  Database owners should be encouraged that the latest rulings from the ECJ provide a broad view of acts that will infringe once a database qualifies for sui generis protection.  The Directmedia and Apis cases may encourage database owners to enforce their rights and lead to a new wave of database cases. 

Andrew Dodd is a Partner and Louisa Albertini is a Solicitor, in the Technology Dispute Resolution Group at Field Fisher Waterhouse LLP: