IT law

IT law

By Jonathan Cohen, Duane Morris, London

Maiden outing of database right ends in steward's inquiryBritish Horseracing Board Ltd and Others v William Hill Organisation Ltd: (Ltl 31 July 2001)On 9 February, Mr Justice Laddie handed down the first reported judgment on database right.

This is a new category of intellectual property right emanating from Europe.He ruled that the William Hill organisation had infringed the claimants' database right.

William Hill appealed, arguing that the judge had misinterpreted the relevant directive.The Court of Appeal then referred the interpretation of the directive to the European Court of Justice (ECJ).Pending the ECJ's determination and the Court of Appeal's decision on the appeal, IT lawyers need to consider the issues which this case raises.Lord Justice Peter Gibson summarised them in his judgment using Mr Justice Laddie's analysis at first instance.

The British Horseracing Board (BHB) oversees the racing industry.

One of its functions is the compilation of the annual fixture list and the supervision of all meetings.To discharge all its functions, Weatherbys (the second claimant) maintains and develops an extensive database on the BHB's behalf.

The cost of obtaining, verifying and presenting the contents of the database runs to some 4 million annually.These proceedings centre on the distribution of pre-race information from the database.

As the day of the race meeting approaches, Weatherbys adds to the database details such as declared runners and starting stall numbers.BHB then distributes that pre-race information through various channels.

One such distribution service is the supply of pre-race information via a raw data feed to Satellite Information Services (SIS).

SIS then supplies the information to its subscribers.William Hill operates betting offices and offers telephone betting.

Most of the information which it displays at its offices and uses for its telephone services is derived from the database, either under licence or with the implied consent of BHB.Problems arose in 1999 when William Hill established an Internet betting service.

At first instance, Mr Justice Laddie held that William Hill had been using pre-race information derived from the raw data feed it purchased from SIS.

It was accepted that SIS had not sub-licensed William Hill to publish that information on its Web site.The pre-race information on the Web site was essentially the same as that which William Hill was publishing via its betting offices and telephone-based services.

Notwithstanding this, BHB and the other claimants obtained an injunction as a result of William Hill's alleged infringement of database right.

The new rightThe Copyright and Rights in Database Regulations 1997 (SI 1997/3932) are implemented into UK law Directive 96/9/EC on the Legal Protection of Databases.Article 1(2) of the directive provides a new right which is independent of copyright, and which protects: '...investment in obtaining, verifying or presenting the contents of a database...'Lord Justice Gibson summed up the issues as follows:l Infringement without using the form of the database.

William Hill's counsel submitted that his client had not made use of Weatherbys' arrangement of the database.Nor had it taken advantage of the way in which Weatherbys had made those contents individually accessible.

Consequently, there was no infringement of database right.Mr Justice Laddie disagreed.

In his view, recitals 38, 39 and 58 establish that database right is concerned primarily with the investment in obtaining, verifying and presenting the contents of the database, and not with its form.

Taking the contents and then rearranging them could not displace the application of database right.l Had William Hill used a substantial part of the database? At first instance BHB had asserted that William Hill was in breach of article 7(1) of the directive.It asserted that William Hill's publication of the pre-race information on its Web site constituted '...extraction and/or re-utilisation of the whole or of a substantial part, evaluated qualitatively and/or quantitatively, of the contents of that database'.William Hill had argued that in terms of quantity, the pre-race information it published was not substantial.

Neither was it substantial on a qualitative level in comparison to the importance of all the information in the database.Mr Justice Laddie accepted that when assessing these issues, a comparison is needed between the contents of the information published and the contents of the database.

However, he was also entitled to take account of the importance of the published information to the alleged infringer.In this case William Hill was using the most recent and complete information from the database.

For that reason it was a 'substantial part' for the purposes of article 7(1).l Was William Hill extracting the information? Under article 2(a) 'extraction' involves the permanent or temporary transfer of the contents of the database.

William Hill's counsel pleaded that this required the actual removal of the contents from the original database, so that they needed to be re-inputted into the database.

Mr Justice Laddie gave that argument short shrift.

It was not a requirement of the directive.l Was William Hill 're-utilising' the information? Re-utilisation involves making available to the public all or a substantial part of the contents of a database (article 2(b)).According to William Hill, this meant making available to the public something that was not already in the public domain.

Given that all the information on his client's Web site was available at its betting offices or via BHB's distribution channels, there was no re-utilisation.

Mr Justice Laddie rejected that as driving a coach and horses through the purpose of the directive.

If it were correct then the right to protect investment in a database would be lost as soon as the holder of the right published any information contained in it.

l The article 7(5) question.

BHB argued it was also entitled to the protection afforded by article 7(5), which prohibits: '...

the repeated and systematic extraction and/or re-utilisation 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...' William Hill asserted that the article did not apply on the facts.

It was concerned with the contents of 'the database'.However, in this case Weatherbys was adding daily updates of pre-race information.

Each modification meant that a new database was created.

Each new database had its own term of protection.

It followed that there could be no repeated extraction from the one single database as required by article 7(5).

Mr Justice Laddie was unconvinced.

He ruled that database right applied to dynamic databases as well as to those which were static.

Moreover, William Hill's actions conflicted with the normal exploitation of the database.

They also unreasonably prejudiced BHB's interest in selling the pre-race information.Reference to the ECJLord Justice Peter Gibson declared that this case raised community law issues which the Court of Appeal could not resolve.

Those issues were critical for its decision.Interestingly, he added that the Court of Appeal would have supported Mr Justice Laddie's interpretation if it had not made the reference.Pending the outcome of this case organisations should consider whether they are in a position to assert database right.

Equally, unlicensed users and providers of information from someone else's database should consider the risks which such use could entail.

Whoever wins, database right is now off and running.