Out-Law News 4 min. read
12 Nov 2012, 11:46 am
Ms L Anderson QC said that the High Court had jurisdiction to hear the case because there was a good argument that the alleged acts of infringement took part at least in part in England.
Although the alleged acts of infringement are said to have taken place in Singapore, there was "at least a good arguable case" that protected information from an English company's database had been "extracted" or "re-utilised" in England since that is where the information was stored and from where it had been served.
The deputy judge's judgment (subscription-only) was issued in a case involving an English company SMi Group Limited (SMi) which organises conferences worldwide on defence and security matters.
SMi has claimed that two former employees, Daniel and Marta Levy, "extracted substantial quantities of commercially confidential and valuable information" from its computer servers and/or its 'Unity' database and used the information "extensively" in order to organise a conference in Singapore in direct competition to one it was organising in the country. The Levys, who had left their roles at SMi at the time of the alleged incident, "accessed remotely" the information from Singapore where they were based when working for Dutch firm IB Consultancy, it is claimed.
SMi's Unity database contained "details of client contacts, amongst other things, collated over some 18 years of business" and its servers were based in Manchester. Access to the database was user name and password protected. The company has claimed that the information it held was commercially sensitive, highly valuable, protected by copyright and stored on a database in which database rights subsisted and was "administered and maintained" on its UK servers for its own benefit, according to the High Court judgment.
IB Consultancy, the company's managing director Ilja Bonsen, and the Levys face claims that they have infringed SMi's database rights, copyright and breached the English firm's confidence. In addition, SMi has argued that the Levys acted in breach of their employment contracts with it.
However, Bonsen had claimed that the courts in England did not have jurisdiction to rule on the issue because there was "no connection or sufficient connection, between the alleged acts of wrongdoing and England". He said that only the courts in the Netherlands, where he is resident, should be able to rule on the case and said that on this point that Dutch proceedings on the issue had already commenced.
SMI claimed that because its servers, database and confidential information were based in England and because the alleged "harmful events occurred and/or the damage occurred" in England, the High Court had jurisdiction to hear its case.
Generally the EU's Brussels Regulation states that individuals can only be sued in the courts in the country in which they are based, regardless of nationality, other than in certain circumstances. Those circumstances include "in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur".
Ms L Anderson QC said that it was "plainly arguable" that SMi had a database that was protected by database rights and that information contained on it was either extracted or re-utilised by the Levys, IB Consultancy and Bonsen.
The deputy judge assessed whether the extraction or re-utilisation could be said to have occurred in the UK, despite the presence of the Levys in Singapore when the information was allegedly taken and then acted on.
She said that the non-binding view of an Advocate General at the Court of Justice of the European Union (CJEU) had persuaded her that there was a case to say that the act of extraction or re-utilisation had taken place in the UK where the servers were based and that therefore the High Court had jurisdiction to hear the case in full.
In June Advocate General Yves Bot said that online publishing of information takes place both where the information is served from and where it is read. However, the CJEU has subsequently formed a slightly different view in a binding judgment issued last month. That judgment was issued after Ms L Anderson QC issued her ruling on this case.
"The Advocate General urges an approach which rejects emission and reception as being appropriate criteria for determining the locus of a relevant communication in the case of internet communication in favour of a more embracing definition which acknowledges that, in a case of reutilisation of data derived from a database, the tort is capable of being committed in more than one place," Ms L Anderson QC said in the High Court judgment. "It follows that [SMi], in my judgment, has at least a good arguable case that the place where the harmful event occurred for the purposes of [the Brussels Regulation] is, at the least, in the United Kingdom and possibly elsewhere."
The deputy judge said that "although an appeal was intimated" in the Netherlands, it was never actually "pursued". For that reason she said that the English courts could claim jurisdiction on the issue.
Under the EU's Database Directive database creators that have made "qualitatively or quantitatively a substantial investment in either the obtaining, verification or presentation of the contents" can "prevent extraction and/or re-utilization of the whole or a substantial part, evaluated qualitatively and/or quantitatively, of the contents of that database".
EU law only allows for rights holders to enforce their 'sui generis' database rights against unauthorised "extraction" or "acts of re-utilisation which take place in that territory". The CJEU said last month that it will be up to national courts to determine on a case-by-case basis whether databases were re-utilised in their country.
In its judgment the CJEU said that publisher liability for database infringement extends to countries where the information is meant to be used and not just countries where it is stored. It said that an EU national court will have jurisdiction to rule that a company is guilty of primary infringement of database rights if there is "evidence" that the publisher intended for the information to be viewed in that country.
Three distinct protections can apply to databases and their contents. The information in a database can be protected by copyright; the database structure itself can be so creative that it is protected by copyright, and the whole database can be protected by the 'sui generis' database right. The contents of a database can also be subject to laws which protect confidential information.
This was created by the European Union to encourage the development of database-dependent digital systems and it allows a creator to stop others using a database or the information in it if the investment of time, money and skill in that original database was large enough. Under copyright law alone such protection would not necessarily apply if the database contained merely facts, as only the expression of facts and not the facts themselves can be copyrighted.