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Database rights are no 'impediment to the growth of Europe's data-driven economy', expert says

Out-Law Analysis | 12 Jan 2016 | 3:45 pm | 5 min. read

OPINION: The existence of database rights does not hold back EU businesses from developing innovative new uses for data despite what a recent report backed by two European Parliament committees says.

Examples from the sporting world show that database rights can in fact support innovation in uses of data and, in contrast, highlight the threat to business models where such rights are not said to subsist in data sets.

That view does not appear to be shared by the Committee on Industry, Research and Energy and Committee on the Internal Market and Consumer Protection at the European Parliament. In a newly published report the committees called on the European Commission to abolish the existing EU Database Directive.

The committees said they believe the Directive is “an impediment to the development of a European data-driven economy”.

The report published by the committees should be read in the context of work that the Commission has pledged to carry out to develop a true digital single market across the EU. In May the Commission outlined a new digital single market strategy in which, among other things, it identified the aim of "building a data economy" in the EU.

The strategy paper does not refer specifically to databases or database rights, but the Commission said it "will need to remove a series of technical and legislative barriers" if its vision of a 'data economy' is to be realised.

The Commission said one problem was the "fragmented implementation of copyright rules and lack of clarity over rights to use data” and it has said it will "propose in 2016 a European ‘free flow of data’ initiative that tackles restrictions on the free movement of data for reasons other than the protection of personal data within the EU”.

Whether the actions the Commission intends to carry out will include abolishing or revising rules on database rights remains to be seen. Case law shows, though, the role database rights can play in supporting, rather than hindering, innovation.

Take the market for 'in play' betting on football, for example – a market which has exploded in recent years. In 2012 the High Court ruled that the investment put in to recording a collection of 'factual data' about football matches qualifies for database rights protection, although it also ruled that that protection does not apply to the recording of goal information in a database on its own.

This ruling has meant that Football DataCo, which commercialises match data on behalf of football authorities in Scotland and England, has been able to build a business from licensing live data from matches to gambling operators. The gambling companies have in turn successfully developed new 'in play' business models using the live data from games.

EU rules ensure that database rights do not apply to every aggregation of data, however. Only if database creators have invested sufficient time, money and skill into developing their database will those creations be protected by database rights. Databases that arise as a by-product of doing business do not attract database right protection.

The Database Directive was established as a way of harmonising the law protecting databases so as to encourage the development of database-dependent businesses in the digital age by creating a 'sui generis' database right that can protect certain sets of data that cannot qualify for copyright protection.

Copyright law alone cannot offer protection to database creators where the database contains facts, as facts in and of themselves are not necessarily capable of being copyrighted. For example, there is no copyright in the address data recorded in a telephone directory but because a substantial investment goes into creating a directory that directory will be protected by database rights.

Demonstrating that database rights apply has been a high bar to satisfy before the courts. Attempts by Football DataCo to enforce database rights in the context of football fixture lists failed. So too did the British Horseracing Board’s arguments that the resources they deployed to draw up a list of horses in a race constituted investment that merited the application of database rights. In the latter case, the lack of database right protection meant the British Horseracing Board went bust and so while the bookmakers got the race information for free, the horse racing industry had to restructure itself and find investment to fund the operation of horseracing in the UK from other sources.

In addition, jn a recent case before the Court of Justice of the European Union, Ryanair was able to prevent a competitor, PR Aviation, scraping price data from its website precisely because the court ruled no database right existed in Ryanair's airfares.

Had the court ruled that database rights existed in Ryanair's price data then PR Aviation would have been able to take and use the data under a permitted use exception provided by the Database Directive which Ryanair could not have excluded through its website terms and conditions. As it was, Ryanair was able to rely on its contractual rights and stop PR Aviation using information scraped from Ryanair's website without Ryanair's permission.

The rulings in these cases show that at a basic level database rights are not an impediment which prevents people using information because, in many cases, database rights simply will not subsist in sets of data. Establishing whether database rights exist or not will not, in any case, necessarily determine the answer to the question of whether data is free for others to use. In the Ryanair case it was the law of contract and where personal data is involved it will be privacy rights afforded by data protection legislation.

EU policy makers, and indeed the UK government, are keen to promote big data initiative. Bringing together different data sets from sources that perhaps have never been linked before and analysing the information does have the promise of delivering new insights and allowing for more informed decision making.

There is no evidence to show that the existence of database rights protection serves as a barrier to this activity.

EU database rights laws contain a number of exceptions which mean that, even where copyright or database rights is said to subsist in data sets, they do not serve as an unjustified barrier to the development of big data projects.

Under the Database Directive where databases are protected by copyright, database owners cannot prevent a lawful user of that database from making a copy of the database where it is necessary for the lawful user to do so to access the database contents. In those circumstances lawful users are permitted to make "normal use of the contents" of copyright-protected databases without requiring permission from the rights holder.

The Directive also prevents database creators from preventing lawful users of a database from "extracting and/or re-utilising insubstantial parts of its contents, evaluated qualitatively and/or quantitatively, for any purposes whatsoever" where the database has been made publically available.

Lawful users of the database, however, are prohibited from using publically available databases in ways "which conflict with normal exploitation of the database or unreasonably prejudice the legitimate interests of the maker of the database" or from causing "prejudice to the holder of a copyright or related right in respect of the works or subject matter contained in the database".

Those provisions reflect a fair balance between respecting and reflecting the investment that goes into compiling databases and allowing others to make use of data for innovative new purposes.

The European Commission should therefore think twice before acting on the recommendations to abolish the Database Directive.

Iain Connor is an intellectual property law expert at Pinsent Masons, the law firm behind Out-Law.com