Database rights – Infringement – Confidential information
British Sky Broadcasting Group plc and others v Digital Satellite Warranty Cover Ltd (in liquidation): Chancery Division (Sir William Blackburne): 1 October 2012
The four claimants (Sky) formed a well-known pay television satellite broadcaster and communications service provider. Prior to late 2006, the second defendant (Nationwide), and from early 2007 until 2010, the first defendant (Digital) traded in the provision of service plans for Sky satellite television equipment, in competition with Sky’s authorised provider. From about August 2010 to November 2010, the third defendant, F, and fourth defendant, S, carried on the same business as Digital had done, trading in partnership as Satellite Services.
In November 2010, Digital, Nationwide and Satellite services were placed in provisional liquidation. In 2011, they were wound up. Sky claimed (i) that Nationwide and, later, Digital and later, Satellite Services had unlawfully come into possession and made use of confidential customer data taken from Sky’s customer databases for the purposes of marketing extended warranty service plans for Sky satellite equipment; and (ii) the infringement of Sky's marks and passing off through the use of deceptive marketing activities. The claim under (i) concerned all defendants, those under (ii) concerned the first to the fifth defendants.
Sky further alleged that F, S, and the fifth defendant, M (the individual defendants) were jointly and severally liable on the basis that they had procured Digital and Nationwide (the two companies) to carry out the acts complained of or that they had committed the acts complained of pursuant to a common design. The individual defendants were at all material times the registered holders of issued shares in Digital. F was the only director of both companies. M had been in charge of the marketing activities of the two companies. S also handled marketing complaints.
The individual defendants were concerned with the running of the two companies at a senior managerial level. F was also the registered holder of the sole issued share in Nationwide. In respect of the sixth defendant, ST, the issue was whether he had acted as a courier for the delivery of data to S in exchange for cash payments. There was evidence of S’s confession that he had lied to the court and had involved ST. The seventh defendant, W, was named by S as a supplier of data. The eighth defendant, SB, was alleged to have been implicated in the use of Sky data.
The ninth defendant, R, ran companies in the satellite warranty field during which he had set up a company which had allegedly acquired data, including, among others, Sky customers. R had dealings with the principal defendants and he had been successfully sued and became liable to Sky for damages in respect of a passing off claim. The tenth defendant, L, was employed by the fourth claimant. He was alleged to have supplied confidential data relating to Sky customers to Digital. It was alleged that in so doing he had infringed Sky’s database rights contrary to regulation 16 of the Databases Regulations 1997, SI 1997/3032, and breached his contractual duties of confidentiality.
In a judgment (see  EWHC 2662 (Ch)) (the judgment), a judge held the two companies and Satellite Services were liable for breach of confidence, infringement of Sky’s database rights, infringement of one of Sky’s marks and passing off (the judgment). Other orders were made. However, the judge declined to give Sky summary judgment against the individual defendants on the basis of their joint liability for the wrongful acts of the two companies. The instant matter was the trial of the issue of liability of the individual defendants.
The issues for consideration were: (i) whether the individual defendants had intended, procured and shared a common design to commit the wrongful acts alleged against the two companies; (ii) whether Sky had established its claim against ST, SB, W, R and L; and (iii) the meaning of re-utilisation in article 7(2) of Council Directive (EC) 96/9 (on the legal protection of databases), in particular whether making available to the public meant something wider than simply making contents of a database available to the two companies.
The court ruled: (1) It was settled law that a defendant who procured a breach of copyright was liable jointly and severally with the infringer for the damages suffered by the claimant as a result of the infringement. A person did not escape liability as a joint wrongdoer merely because he was a director or other officer of the company in question unless he did no more than carry out his constitutional role as such director or other officer (see ,  of the judgment).
On the facts of the instant case, it was unreal to suppose that the purchase of the Sky customer data by the two companies had occurred without that fact, and the circumstances in which it had happened being fully known to and approved by the individual defendants. Accordingly, the individual defendants had intended, procured and shared a common design that the various acts should occur which the judge had held amounted to breaches of the obligation of confidence which the two companies had owed to Sky as owner of the data in question.
All three had agreed that the two companies should operate in such a way as to breach Sky’s right of confidence in the data, infringe Sky’s database rights in it, infringe its marks and pass themselves off as connected with, or authorised by Sky (see , ,  of the judgment). Sky succeeded in its claims against the individual defendants (see  of the judgment). CBS Songs Ltd v Amstrad Consumer Electronics plc  2 All ER 484 applied; MCA Records Inc v Charly Records Ltd  All ER (D) 70 (Oct) applied.
(2) In respect of ST, on the facts, Sky’s claims against him had to be dismissed. There was no evidence before the court to implicate SB in any wrongdoing. Further, in respect of W, there was no evidence that he was guilty of any of the wrongs with which Sky charged him. Sky had failed to establish its case for relief against R. L could provide no explanation of how seeded data, provided uniquely to him, had ended up with Digital. On the facts, he was liable for misuse of Sky’s confidential information, infringement of its database right and breach of his employment contract with the fourth claimant (see , , , ,  of the judgment). Sky succeeded in its claim against L. It failed to recover any substantive relief against ST, W, SB and R (see  of the judgment).
(3) It was settled law that the term 're-utilisation' in article 7(2) of the Directive was intended to protect the maker of a database against acts which went beyond the legitimate rights and thereby harmed the investment of the maker. The test was whether the distribution to the public in issue was an act which would harm the maker’s investment in creating the database in question. An act of collecting data and delivering it to another without the consent or authority of the maker would amount to the making the contents available to the public (see  of the judgment). British Horseracing Board Ltd v William Hill Organisation Ltd: C-203/02  All ER (D) 146 (Nov) considered.
Thomas Moody‑Stuart (instructed by Herbert Smith Freehills LLP) for the claimants; Digital and Nationwide did not appear and were not represented; Aubrey Craig (instructed by Brabners Chaffe Street LLP) for F and S; M appeared in person; Kelly Pennifer (instructed by McKays Solicitors) for ST; W appeared in person; SB did not appear and was not represented; Genevieve Parke (instructed by Sillett Webb Solicitors) for R; L appeared in person.