ECJ ruling could raise gambling companies' costs, says expert

Out-Law Analysis | 24 Jan 2011 | 9:22 am | 2 min. read

OPINION: Legal uncertainty has kept database licensing costs fairly low in the UK until now, but once a European court rules on whether there is copyright in fixtures lists, costs could go sky high.

Gambling companies will already be closely following the case of Football Dataco and the English and Scottish football leagues, who are suing gambling operators to protect the rights they claim to control fixture lists.

The High Court said last April that the lists were protected by copyright but not by the database right created by an EU directive. The Appeal Court looked at the case and agreed that the database right question was settled.

But the copyright issue was more complex – the High Court ruling seemed to put the UK at odds with law in the rest of Europe. So it has asked the European Court of Justice (ECJ) to clear the matter up.

Some gambling companies might not think there is too much riding on the result, but they would be wrong. Licensing costs for fixtures' databases have stayed relatively modest. Paying them won't break anybody's business model.

But those low costs are a direct result of the legal uncertainty around them. If sporting bodies charged higher fees, legal challenges would become more likely.

So if the ECJ rules that copyright does protect databases, operators can expect licence fees to rocket.

If neither copyright nor database rights are found to exist in fixture lists, this will be good news for gambling companies but for bad news for many others. Many other kinds of companies are dependent on licence fees from databases, and new business models could spring up based on that income as e-commerce makes us all more dependent on the information contained in databases.

But for gambling companies, that result would mean that they would have access to a far wider range of suppliers of information. That competitive market would drive down prices and drive up levels of innovation.

Another case involving Football Dataco and a rival supplier of live game scores will help to determine the degree of control that the operators of sports fixtures can exert over information resulting from the matches.

Football Dataco has a licence to report live scores from football matches in England and Scotland. Tickets to those games forbid commercial activity other than that licensed by the club, so Football Dataco claims any other live score or information service violates its rights.

Both the UK and the German courts will have a role in deciding the issue, but again it could prove crucial in determining the kinds of rates that gambling companies will pay in the future for the information they need to conduct their business.

They should hope that the second case does not also end in a reference to the ECJ. What gambling companies and sports bodies can almost definitely agree on is that the long waiting period while the ECJ processes the database claim will be too long. Certainty is what the businesses need, and it may be a long time coming yet.

By Iain Connor, specialist in intellectual property at Pinsent Masons, the law firm behind OUT-LAW.COM