Database Rights Regulations: Protecting Investment Risk

April 30, 1998

Emma Clee is a trainee solicitor with Baker & McKenzie.

The Copyright and Rights in Databases Regulations 1997 (SI 1997No 3032), which came into force on 1 January 1998, implement Council Directive96/9/EC of 11 March 1996 on the legal protection of databases. The aim of theDirective is to harmonise the copyright protection of databases throughout theEuropean Union. The Directive also introduces a new sui generis rightto prevent the unauthorised extraction or re-utilisation of the contents ofdatabases.

It should be emphasised at the outset that the Regulations are concerned withprotecting the database itself, and do not affect any rights in the materialcontained within the database. For example, where a database consists of aselection of newspaper articles, the Regulations govern the rights in thestructure of the database, ie the selection and arrangement of the articles. TheRegulations do not affect the copyright in the articles themselves.

Is Copyright Protection Still Available?

Before the Regulations came into force, databases were protected by literarycopyright as a type of ‘table or compilation’. Any database which wascreated as a result of the author’s independent effort would qualify forcopyright protection. Consequently, provided that some effort was involved increating the database, and the database was not copied from anyone else, itwould be protected by copyright.

The new Regulations create a two-tier system whereby copyright protection isafforded only to those databases which, by reason of the selection orarrangement of their contents, are the author’s own ‘intellectualcreation’. This is a higher standard than was previously required forcopyright protection. The effect of the ‘selection or arrangement’requirement appears to be that databases which are valuable precisely becausethey are all-embracing will no longer be protected by copyright – for example adatabase which consists of details of all of the births registered in aparticular district, in date order, will probably not involve a sufficientdegree of ‘selection or arrangement’ to qualify for copyright protectionunder the new law. However, provided that there was a substantial investment inobtaining, verifying or presenting the contents of the database, it will beeligible for the new database right.

Where a database was made on or before 27 March 1996 and was protected bycopyright under the old law, it will continue to be protected by copyrightwhether or not it would qualify for copyright protection under the new rules.

The New Database Right?

The database right is available regardless of whether the database is alsoprotected by copyright. Consequently it is possible for a database to beprotected by both copyright and the database right. However, the database rightis available only if at least one of the makers of the database was an EEAresident, national, company or firm. Where the maker of a database does notsatisfy this requirement, he will obtain the database right only if reciprocalprotection is granted by the law of his home country. At the time of writing, nosuch reciprocal arrangements have yet been entered into with any non-EEAcountry. The database right arises automatically where there was a substantialinvestment in obtaining, verifying or presenting the contents of the database.‘Substantial’ is judged in terms of quantity or quality or a combination ofboth. ‘Investment’ means any investment, whether of financial, human ortechnical resources.

Who is the Owner of the Database Right?

If the database right exists, it is owned (in the absence of contraryagreement) by the person who takes the initiative in obtaining, verifying orpresenting the contents of the database and assumes the risk of investing increating the database (or if the person is an employee, by his employer). Wherea name purporting to be that of the maker appeared on a database when it wasmade or published, it is presumed, until the contrary is proved, that the personwhose name appeared is the maker of the database.

What Rights are Granted by the Database Right?

The Regulations state that any acts done in pursuance of an agreement madebefore 1 January 1998 will not be treated as infringing the database right.

The database right is infringed by the unauthorised extraction orre-utilisation of the whole or a substantial part (in terms of quantity and/orquality) of the contents of a database. The owner may also be able to preventthe repeated and systematic extraction or re-utilisation of insubstantial partsof the contents of the database. ‘Extraction’ of the contents means thepermanent or temporary transfer of the contents to another medium.‘Re-utilisation’ means making the contents available to the public (forexample by distribution or renting).

Exceptions to the Database Right?

The Regulations list a number of acts which will not constitute infringementof the database right. Many of these exceptions mirror those under copyrightlaw. However, in contrast to the position under copyright law, extracting orre-utilising the contents of a database for the purposes of teaching or researchis only permitted where the source of the information is indicated, and theresearch is not for any commercial purpose.

Lawful users of a database are entitled to extract or re-utiliseinsubstantial parts of the contents of the database for any purpose, and anyterm in a licence which seeks to prohibit such acts is void. The Regulationsalso make clear that any act by a lawful user which is necessary for access toor use of the contents of the database will not be treated as infringing anycopyright in the database. Again, any term in the licence which seeks toprohibit or restrict such acts is void.

How Long Does the Database Right Last?

The database right lasts for 15 years from the end of the year in which thedatabase was completed, or (where the database was made available to the publicwithin 15 years of its completion) the end of the year in which the database wasfirst made available to the public. Consequently, if the database is first madeavailable to the public in the fifteenth year after its creation, the period ofprotection will effectively be extended from 15 years to 30 years.

The Regulations also provide that, where a database was completed on or after1 January 1983, the database right will last for 15 years from 1 January 1998,rather than the date of its completion.

At first sight, the period of protection granted by the database right isconsiderably shorter than the protection granted by copyright (which lasts forthe life of the author plus 70 years). However, where substantial changes aremade to the contents of a database (including substantial changes resulting fromupdating the database) and as a result the database can be considered to be a‘substantial new investment’, a new 15-year period begins to run from thedate of that investment. Consequently, provided that the database is updated atleast every 15 years, it is possible for the database right effectively tosubsist more or less indefinitely. If a substantial investment is made inchecking the contents of the database but this does not lead to substantialchanges to its contents, it is not clear whether this would qualify the databasefor a further term of protection.

My Chances of Being Protected

  • When creating new databases, or updating existing databases, it is important to keep records of the amount of time, money and other resources which are involved.
  • Consideration should be given to undertaking a review of the contents of any database which was completed before 1 January 1983. Because the database was created more than 15 years ago, it would not normally qualify for the database right. However, provided that the review involves substantial investment (and, possibly, provided also that it actually results in substantial changes to the contents of the database), the database will then qualify for the new database right.
  • Where any agreement is entered into which involves the creation of a new database, it is a good idea to specify clearly in the agreement which party owns the new database right. This will avoid any difficulty of having to prove which party took the initiative in obtaining, verifying or presenting the contents of the database and assumed the risk of investing in making the database.
  • Where a new database is created, it is important to bear in mind the ‘selection or arrangement’ requirement for copyright protection. The maker should consider introducing as many elements of selectivity or arrangement as is commercially viable.
  • When a database is created or published, the maker of the database should ensure that his name appears on all copies.