Database Rights: The New Database Right
Lat updated 9 March 2004
The Copyright and Rights in Databases Regulations 1997 ("the Regulations") came into force on the 1 Jan 1998 and extend to the whole of the United Kingdom. They are intended to implement the Database Directive ("the Directive") and certain obligations of Her Majesty's government under the European Economic Area Agreement so far as relates to the implementation of the directive. They were made by Mr. Ian McCartney MP, Minister of State, Department of Trade and Industry, on the 18 Dec 1997 pursuant to s. 2 (2) and (4) of the European Communities Act 1972.
Summary of the Regulations
The Regulations amend the Copyright Designs and Patents Act 1988 ("the CDPA") to extend copyright protection to databases as literary works and to create a new intellectual property right, known as a "database right", which subsists quite separately from copyright, to protect investment in obtaining, verifying or presenting the contents of databases. There are saving provisions for the continued subsistence of copyright in existing databases and for the extension of database right to databases completed on or after the 1 Jan 1983. Schedules to the Regulations except a number of acts for public administration from the rights created by the Regulations and provide for the licensing of database rights.
Extension of Copyright to Databases
Although the CDPA did not provide specifically for databases there is little doubt that they were regarded as compilations within the meaning of s. 3 (1) (a) and protected as literary works. Reg 5 amends s. 3 (1) of the CDPA to include "a database" within the definition of a literary work along with a table or compilation, computer program and preparatory design material for a computer program. A new s. 3A (1) defines "databases" as follows:
"(1) In this Part `database' means a collection of independent works, data or other materials which:
(a) are arranged in a systematic or methodical way, and
(b) are individually accessible by electronic or other means.
This provision substantially replicates the definition in art 1 (2) of the Directive.
Originality
In order to give effect to the directive, the new s. provides a statutory definition of the adjective "original". The new s.3A (2) provides
"For the purposes of this Part a literary work consisting of a database is original if, and only if, by reason of the selection or arrangement of the contents of the database the database constitutes the author's own intellectual creation."
The definition of originality is something that the legislature has been content to leave to the courts in respect of other copyright works. As databases are now specifically excluded from the definition of "compilation" the cases on originality of compilations are not strictly binding though it is hard to envisage any better practical criteria for determining originality of databases.
Restricted Rights
The rights restricted to the owner of the copyright in a database are the same as those restricted to the owner of the copyright in any other literary work save that a new paragraph (ac) after paragraph (ab) in s.32 (3) provides that adaptation in relation to a database means "an arrangement or altered version of the database or a translation of it".
Fair Dealing
Other consequential amendments of Part I of the CDPA to give effect to art 6 (2) of the Directive include new provisions in Chapter II. S. 29 of the CDPA, which excepts fair dealing for private study and research from the acts restricted to the owner of a copyright, is modified by a new sub-s. (1A) after: sub-s. (1):
"Fair dealing with a database for the purposes of research or private study does not infringe any copyright in the database provided that the source is indicated."
and by a new sub-s. (5) after (4):
"The doing of anything in relation to a database for the purposes of research for a commercial purpose is not fair dealing with the database."
There is also a new s. 50D:
"(1)
It is not an infringement of copyright in a database for a person who
has a right to use the database or any part of the database, (whether
under a licence to do any of the acts restricted by the copyright in the
database or otherwise) to do, in the exercise of that right, anything
which is necessary for the purposes of access to and use of the contents
of the database or of that part of the database.
(2) Where an act which would otherwise infringe copyright in a database
is permitted under this s., it is irrelevant whether or not there
exists any term or condition in any agreement which purports to prohibit
or restrict the act (such terms being, by virtue of s. 296B,
void)."
To prevent licensors snatching back by contract what is excepted by statute, there will be a new s. 296B:
"Where under an agreement a person has a right to use a database or part of a database, any term or condition in the agreement shall be void in so far as it purports to prohibit or restrict the performance of any act which would but for s. 50D infringe the copyright in the database."
Existing Databases
Reg 29 (1) provides that where a database was created on or before the 27 Mar 1996 and was a copyright work immediately before the 1 Jan 1998 copyright shall continue to subsist for the reminder of its copyright term. The significance of the 27 Mar 1996 is that it is the date on which the directive appeared in the EC Official Journal.
The New Database Right
Reg 13 (1) creates the new database right. Unlike copyright which requires "intellectual creation", the new right subsists "if there has been a substantial investment in obtaining, verifying or presenting the contents of the database." The right can subsist even if copyright does not subsist in the database or any of its contents. The right has been created because the increasing use of digital recording technology exposes the database maker to the risk that the contents of his database may be copied and re-arranged electronically, without his authorization, to produce a database of identical content without infringing any copyright. These regulations seek to safeguard the position of makers of databases against misappropriation of the results of the financial and professional investment made in obtaining and collecting the contents of a database by protecting the whole or substantial parts against certain acts by users or competitors. The object of database right is to ensure protection of any investment in obtaining, verifying or presenting the contents of a database since such investment may consist in the deployment of financial resources and the expenditure of time, effort and energy.
Conditions for Subsistence
Database right subsists only if the maker (or, in the case of a database that was made jointly, one of the makers) was a national or habitual resident of a state of the European Economic Area ("the EEA") when or over the period that the database was made. If the maker was a limited company or other corporation incorporated under the laws of any EEA state, that condition is fulfilled by having:
a central administration or principal place of business within the EEA, or
a registered office is within the EEA provided that the maker's operations are linked on an ongoing basis with the economy of an EEA state.
Alternatively, if the maker was a firm or other unincorporated body under the law of an EEA state, the condition is satisfied by having a central administration or principal place of business in the EEA.
The Council of Ministers has reserved the right to conclude agreements to extend database right to nationals of other countries provided they offer similar protection to EEA nationals in their territories. The United States has submitted proposals for database protection to the World Intellectual Property Organization in response to a European draft treaty based on the directive and has called for discussions on the subject during 1998.
Title
The maker of a database is the first owner of database right in it because he or she is the person who takes the initiative and the risk of investing. Subject to the following exceptions, the maker is the person who takes the initiative in obtaining, verifying or presenting the contents of a database and assumes the risk of investing in that obtaining, verification or presentation.
These exceptions arise where a database is made by:
an employee in the course of his or her employment, in which case that person's employer shall be regarded as the maker of the database;
an officer of the Crown in the course of his or her duties, in which case Her Majesty is regarded as the maker; and
one or both of the Houses of Parliament or under the direction or control of the Houses of Parliament or of either House, in which case the two Houses or, as the case may be, the House by whom, or under whose direction or control, the database was made, shall be regarded as the maker or joint makers.
The definition of "maker" does not extend to sub-contractors.
Infringements
A person infringes database right if he or she extracts or re-utilizes all or a substantial part of the contents of the database without the owner's consent. For the purpose of this provision,
"extraction" means in relation to the contents of a database "the permanent or temporary transfer of those contents to another medium by any means or in any form,"
"re-utilization" means in relation to such contents "making those contents available to the public by any means," and
"substantial" in relation to "extraction" or "re-utilization" means substantial in terms of quantity or quality or a combination of both".
The scope of the protection is clear from the recitals to the Directive. Recital (42) explains that "the special right to prevent unauthorized extraction and/or re-utilization relates to acts by the user which go beyond his legitimate rights and thereby harm the investment". It relates not only to the manufacture of a parasitical competing product but also to any act that causes significant detriment to the investment whether quantitative or qualitative. Thus, it would appear that a licence is required to download or printout screen output:
"Whereas, when on-screen display of the contents of a database necessitates the permanent or temporary transfer of all or a substantial part of such contents to another medium, that act should be subject to authorization by the rightholder;"
On the other hand, the right to prevent unauthorized extraction and/or re-utilization is intended neither to constitute an extension of copyright to mere facts or data nor to give rise to the creation of a new right in the works, data or materials themselves.
Substantial Part
The regulations specifically permit lawful users to extract or re-utilize insubstantial parts of the contents of a database for any purpose and nothing in a licence or other agreement may prevent such extraction or re-utilization. The expression "a substantial part" appears to have a different meaning in relation to database right than it does for copyright. One obvious difference is that quantity even in the absence of quality may be relevant. That is clear not only from the definition of "substantial" mentioned above but also from the provision in reg 16 (2) that "the repeated and systematic extraction or re-utilization of insubstantial parts of a database may amount to the extraction or re-utilization of a substantial part of those contents." On the other hand, since the justification of database right is the protection of investment in a database it is hard to see how extraction of data that are not qualitatively important could possibly harm such investment.
Proceedings
Infringement of design right is actionable by the database right owner or his or her exclusive licensee. The remedies that are available for infringement of copyright including injunctions, damages, accounts or otherwise are available. These include additional damages where the justice of the case may require having regard to all the circumstances of the case including the flagrancy of the infringement and any damages accruing to the defendant by reason of the infringement.
One significant difference between the database right and copyright is that there is no specific provision for delivery up or forfeiture of infringing copies. As in actions for breach of confidence or passing-off, the court could make use of its general powers to order delivery-up of documents for discovery or the preservation of evidence. Another significant difference is that there are no criminal sanctions for infringing database right equivalent to s. 107 of the CDPA.
Presumptions
Anyone bringing proceedings for the infringement of database right may be assisted by the following presumptions:
(1) Where a name purporting to be that of the maker appears on copies of the database as published, or on the database when it was made, that person shall be presumed until the contrary is proved:
(a) to be the maker of the database; and
(b) to have made the database otherwise than in the course of employment or the service of the Crown or either House of Parliament.
(2) Where copies of a database as published bear a label or mark stating that a named person was the maker of the database or that the database was first published in a specified year, that label or mark shall be admissible as evidence of the facts stated and shall be presumed to be correct until the contrary is proved.
If a
database is alleged to have been made jointly, those provisions will
apply mutatis mutandis in relation to each of the alleged makers.
These provisions are equivalent to those provided by s. 104 of
the CDPA in relation to copyright and are doubtless to be construed in
the same way. Term
Database right expires at the end of the period of 15 years from the end of the calendar year in which:
the making of the database was completed, or
the database was first made available to public if it was made available within 15 years of such completion.
As database right protects investment any substantial change to the contents of a database, whether resulting from successive additions, deletions, alterations or otherwise, qualifies for a fresh term of protection. So too may a substantial verification of the contents of a database. The recitals to the Directive make it clear that the burden of proof that the criteria exist for concluding that a substantial modification of the contents of a database is to be regarded as a substantial new investment lies with the maker. As for existing databases, database right shall subsist in any database completed after the 1 Jan 1983 for the period of 15 years beginning with the 1 Jan 1998.
Fair Dealing for the Purposes of Database Right
Database right is not infringed by fair dealing with a substantial part of a database that has been made available to the public in any manner if it is extracted by a licensee, or other person entitled to use the database ("lawful user"), for the purpose of illustration for teaching or research and not for any commercial purpose and the source is indicated. The use of the words "fair dealing" prompts comparison with s.s 29 and 30 of the CDPA. In the latest "fair dealing" case, Pro Sieben Media AG v Carlton UK Television Ltd, The Times, 24 Sep 1997, Laddie J made it clear that the exception was conditional upon:
the state of the defendant's mind at the relevant time: that is to say, whether he made use of the relevant extract for the purpose of the statutory extraction or some extraneous purpose;
the purpose of the dealing: whether the purpose of the statutory exception was one though not necessarily the only or even the dominant purpose;
fairness: whether the dealing was fair;
the sufficiency of the acknowledgement: whether it identified the source of the work; and
accompaniment: whether it accompanied the work. The fulfilment of each condition is essential for that exemption.
Public Lending
The clear and simple exclusion of public lending from the definition of "extraction" and "re-utilization" in the Directive is translated into the following ponderous provision:
"The making of a copy of a database available for use, on terms that it will or may be returned, otherwise than for direct or indirect economic or commercial advantage, through an establishment which is accessible to the public shall not be taken for the purposes of this part to constitute extraction or re-utilization of the contents of the database."
This requires a gloss to explain that "no direct or indirect
economic or commercial advantage" within the meaning of the previous paragraph
arises from charging an amount that does not go beyond what is necessary to
cover the costs of the establishment. Yet another
gloss is needed to make clear that making a copy of a database available for
on-the-spot reference use is not public lending - that is to say, it does not
fall within the above exclusion from the definition of extraction or
re-utilization. Public Administration Exception
In order not to frustrate the public administration exceptions provided by s.s 45 to 50 of the CDPA, those provisions are mirrored by Schedule 1 of the Regulations.
(1) Parliamentary and Judicial Proceedings: Database right is not infringed by anything done for the purposes of parliamentary or judicial proceedings or for the purposes of reporting such proceedings. s. 178 of the CDPA includes proceedings of the Northern Ireland Assembly and the European Parliament within the definition of "parliamentary proceedings" and "proceedings before any court, tribunal or person having authority to decide any matter affecting a person's legal rights or liabilities" for the purpose of that Act.
(2) Royal Commissions and Statutory Inquiries: Similarly, database right is not infringed by anything done for the purposes of a Royal Commission or statutory inquiry or reporting any such proceedings held in public. Nor is it infringed by issuing copies of the report of a Royal Commission or statutory inquiry containing the contents of a database to the public.
(3) Material Open to Public Inspection: The following exceptions apply to extraction of all or a substantial part of the contents of databases open to public inspection pursuant to statute by or with the authority of the person required to make those contents available for inspection. The first is if the database contains factual information of any description or is a register maintained pursuant to statute provided that such extraction is for a purpose that does not involve re-utilization of all or a substantial part of those contents. The second is the extraction or re-utilization of all or a substantial part of the contents of such a database for the purpose of inspecting them at a more convenient time or place or otherwise facilitating the exercise of the right to inspect. The third is if the contents of such a database are of general scientific, technical, commercial or economic interest and the extraction is for the purpose of disseminating that information.
(4) Material Communicated to the Crown in the Course of Business: Where the contents of a database have been communicated to the Crown
for any purpose
in the course of any activity carried on by the Crown or other public business
by or with the licence of the database right owner, and
a document or other material thing recording or embodying the contents of the database is owned by or in the custody or control of the Crown,
the Crown may, subject to any agreement to the contrary, extract or re-utilize all or a substantial part of the contents of the database for the purpose for which the contents were communicated to it or for any related purpose that could reasonably have been anticipated by the database right owner without infringing database right. The Crown may not re-utilize the contents of a database by virtue of this exception if the contents are published otherwise than by virtue of this provision.
(5) Public Records: The contents of a database which are comprised in public records within the meaning of the Public Records Act 1958 or the equivalent Scottish and Northern Irish statutes which are open to public inspection in pursuance of such legislation may be re-utilized by or with the authority of any officer appointed under that Act.
(6) Acts done under Statutory Authority: Database right is not infringed by anything that is specifically authorized by an Act of the United Kingdom or Northern Irish Parliaments whenever passed. This exception is without prejudice to any other defence of statutory authority which would otherwise be available under or by virtue of any other enactment.
Competition Law
Database right may not be afforded in such a way as to facilitate abuses of a dominant position, in particular as regards the creation and distribution of new value added information products and services. The rights conferred by these regulations are therefore subject to Community and national competition law. Although the doctrine of exhaustion of rights is irrelevant to on-line services it applies to databases on portable media such as CD-ROM and CD-i which are subject to these regulations. Where a copy of a database has been sold within the EEA by or with the consent of the database right owner, the further sale of that copy within the EEA constitutes neither extraction nor re-utilization of the contents of the database.
Statutory Defences
Three defences are provided by the Regulations. First, it will be an absolute defence for a defendant to show that it was not possible to ascertain the identity of the makers (or any of them) by reasonable inquiry and that it was reasonable to assume that database right had expired. Secondly, no damages may be awarded against a defendant who can show that at the time of the infringement he or she did not know and had no reason to believe that database right subsisted in the database the subject of the action. The court may still grant an injunction, account of profits or other remedy against him or her. Thirdly, where a licence is available as of right under certain provisions mentioned later, and the defendant undertakes to take such a licence on terms to be agreed or, in default of agreement, settled by the Copyright Tribunal, no injunction or order for delivery up made be made. The amount recoverable by way of damages or on an account of profits may not exceed double the amount which would have been payable by the defendant if such a licence of right had been granted before the first infringement. An undertaking to take such a licence may be given at any time before final order in the proceedings without any admission of liability.
Disposal of Database Rights
Database right is transmissible by assignment, will,
intestacy, insolvency or otherwise by operation of law as any other personal
property. Such an assignment or transmission may
be partial so as to apply to:
one or more, but not all, of the things the database right owner has
the exclusive right to do; or part but not the whole of the period for which the database right is
to subsist.
An assignment must be in writing and signed by or on behalf of the assignor. Notice of the assignment should be given to any suspected infringer pursuant to s. 136 (1) of the Law of Property Act 1925 before issuing proceedings. It is possible to assign database right in a database that will or may come into existence in the future. A bequest of documents or other material thing recording or embodying a database will be construed as including the database right in the database in so far as the testator was the owner of such right immediately before his or her death unless there is an indication to the contrary in the will or codicil.
Licensing
A database owner may grant exclusive or non-exclusive licences. An exclusive licence means a licence in writing signed by or on behalf of the database right owner authorizing the licensee to the exclusion of all other persons, including the licensor, to exercise any right that would otherwise be exercisable exclusively by the database right owner. The exclusive licensee has, except against the database right owner, the same rights and remedies in respect of matters occurring after the grant of the licence as if it had been an assignment. His or her remedies are concurrent with those of the database right owner and, where either of them wishes to bring proceedings for an infringement in respect of which they have concurrent rights, the database right owner or the exclusive licensee must join the other of them, either as a plaintiff or as a defendant, or obtain the leave of the court. A licence granted by a database right owner (or prospective owner) is binding on every successor in title to his or her interest in the database right (or future database right) except a bona fide purchaser for value without actual or constructive notice of such licence.
Licensing Schemes
The classes of cases in which
database right licences are granted and the terms of such licences
("licensing schemes") are regulated by Sched 2 to the Regulations.
The following provisions apply where such schemes are operated by
"licensing bodies" - that is to say, societies or other organizations
which have as their objects the negotiating or granting of database
right licences including the granting of licences covering the databases
of more than one maker. The following matters may be referred to
the Copyright Tribunal:
(1) the terms of a licensing scheme proposed to be operated by a licensing
body by an organization claiming to represent persons demanding licences in
cases of a description to which the scheme would apply either generally or in
relation to any description of case;
(2) disputes between a person claiming a licence under a licensing scheme and
an organization representing the licensors;
(3) further matters arising from any order made by the Copyright Tribunal upon
a reference under either of the previous heads;
(4) claims that an operator has refused to grant or procure a licence in
accordance with a licensing scheme or within a reasonable time of being asked
in a case covered by such a scheme;
(5) claims that an operator has refused to grant or procure a
licence, failed to do so within a reasonable time of being asked, or
proposed terms for a licence that are unreasonable in a case excluded
from a licensing scheme but in circumstances in which it is unreasonable
that a licence should not be granted; or
(6) a review of any case in which an order has been made under the
preceding provision.
If it decides to entertain these references (and it may decline to entertain a reference as to proposed schemes on the ground that the reference is premature), the Tribunal may confirm or vary the scheme in question or make such declaration or other order as may be appropriate.
The following matters may be referred to the Tribunal in
cases relating to database right which cover databases of more than one maker
granted by licensing bodies otherwise than pursuant to a licensing scheme:
(1) the terms on which a licensing body proposes to grant a licence by the
prospective licensee;
(2) applications by licensees whose licences are due to expire by effluxion of
time or upon notice given by the licensing body;
(3) a review of any order made under either of the previous heads.
The Copyright Tribunal also settles terms of licences of right in default of agreement where an order is made to provide for such licences following a report by the Monopolies and Mergers Commission that:
the conditions on which licences are granted or
the refusal of a database right owner to grant licences on reasonable terms
may be
expected to operate (or has operated) against the public interest. In
determining what is reasonable on a reference or application under any
of these provisions, the Tribunal must have regard to the availability
of other schemes, or the granting of other licences, to other persons in
similar circumstances, and the terms of such schemes or licences. It
is required to exercise its powers so as to prevent unreasonable
discrimination between licensees or prospective licensees under the
scheme or licence to which the reference or application relates and
licensees under other schemes or licences operated or granted by the
same person. Review
The Regulations are unlikely to remain in their current form for long. The Directive requires the Commission to report to the Council of Ministers, the European Parliament and the Economic and Social Committee on the application of this legislation not later than the 31 December 2000 and every 3 years thereafter.It is expected to consider in particular the application of database right and verify whether it has led to any abuses of a dominant position or other interference with competition which would justify some form of compulsory licensing. Where necessary it should submit proposals for adjustments of the Directive in line with technical developments. Further amendments can be expected when the Competition Bill becomes law. Finally, the United States, Japan and other developed countries are likely to agree to protect the databases of EEA citizens on a reciprocal basis. .