European Court considers fairness of database monopoly

IMS Health makes over a billion dollars a year in data sales. The dispute concerns its control of sales data gathered in Germany. The company uses a pharmaceutical tracking service called RPM 1860. A key component of this service is called the "1860 Brick Structure". RPM 1860 helps German pharmaceutical companies track the flow of drug products, dividing the German pharmacy market into 1,860 regional districts.

The problem for NDCHealth, which offers a similar service to its rival, was that it failed to break the German market because potential customers had become so familiar with the 1860 Brick Structure that they didn't want the German market categorised in any other, incompatible way. So NDCHealth tried to break the market into 1,860 segments – and was successfully sued by IMS Health in Germany, on the grounds of breaching regulations which give copyright protection to databases.

NDCHealth is arguing unfair competition. The matter has already been considered by the European Commission, which came out in support of NDCHealth's arguments that it should be allowed to obtain a licence to use the 1860 Brick Structure on reasonable terms from its competitor.

Reuters reports that lawyers for IMS Health yesterday argued that if the firm were forced to licence its intellectual property then every company could be forced to licence away its competitive advantages.

NDCHealth argues that the creativity required to design the zones is "banal"; yet arguably, this is exactly what database regulations exist for: databases generally are not works of literary brilliance, but their compilation does require extensive time, effort and investment.

Reuters quotes NDCHealth's Thomas Luebbig who said: "There is a disproportion between the value of the input – the triviality of the maps – and the leveraging effect on the market."

The ruling is likely to take a number of months, according to Reuters.

A Commission Decision of 2001 on interim measures to be taken in the case can be downloaded as a 50-page PDF.