In the digital era, data and its collation is an increasingly valuable asset, making available essential information to a variety of business and financial services, consumers, the government and scientific communities, among others. The broad definition of ‘database’ provided in Directive 96/9/EC (the ‘Database Directive’) means that a broad range of materials constitute databases, including the more obscure such as the information obtainable from a topographic map (Freistaat Bayern v Verlag Esterbauer GmbH C-490/14). However, showing that the database falls within the scope of the Database Directive and enforcing the arising rights has proven challenging, resulting in numerous references to the CJEU and a critical review by the Commission in 2005.

This article considers the scope of database protection under the current legislation and the potential impact of Brexit.

Database rights

The Database Directive was adopted in 1996 and came into force in the UK on 1 January 1998 through the Copyright and Rights in Databases Regulations 1997. Its predominant purpose was to remove the differences that had developed between Member States in affording protection to databases under copyright law which were distorting trade. Some states with a low threshold for ‘originality’ were routinely protecting databases; those with higher thresholds were not. By harmonising the law and securing both the rights and investment of database owners and the legitimate interests of users (via exceptions), it was hoped that the Database Directive would significantly boost database creation and their movement across the community.Member States in affording protection to databases under copyright law which were distorting trade. Some states with a low threshold for ‘originality’ were routinely protecting databases; those with higher thresholds were not. By harmonising the law and securing both the rights and investment of database owners and the legitimate interests of users (via exceptions), it was hoped that the Database Directive would significantly boost database creation and their movement across the community.

The Database Directive attempted this by clarifying existing rights under copyright but also simultaneously introducing a completely novel form of intellectual property: the sui generis database right.

In short, the two different rights are:

• copyright arising from intellectual creativity in the selection or arrangement of the data in the database, and
• a ‘sui generis’ database right in the contents of the database, where there has been a substantial investment in obtaining, verifying or presenting them. Database rights prevent the extraction and/or reutilisation of the whole or a substantial part of the contents (article 3), subject to certain exceptions (see article 9 and the proposed exception for text and data mining briefly discussed here).

The scope of database rights

When first introduced there was a significant lack of clarity as to the scope of protection provided by database rights. Unfortunately, the perceived scope of the Database Directive was quickly curtailed by the CJEU in the case of British Horseracing Board v William Hill (C-203/02). In that case the CJEU held that, in assessing whether database rights subsisted in a database, resources invested in the creation of the data were not relevant. The only investment that was relevant was investment in obtaining existing independent information, their verification or their presentation. In deciding this, the CJEU made clear that the fact that the person who creates a database is also the creator of the materials contained in the database does not preclude the subsistence of database rights, as long as it can be shown that there was substantial investment in either obtaining, verifying or presenting the materials which is independent of the resources used in creating the materials.

Despite this clarification by the CJEU, this decision significantly limited the perceived scope of database rights. As a result many who seek to develop and exploit databases have sought to protect their investment in them by limiting access to databases, encrypting data and/or through contractual restrictions over the use of data as a an alternative to relying on database rights. As a result the Database Directive’s effectiveness continues to be questioned.

In the Commission’s evaluation of the Database Directive published in 2005, there was no proven impact on increasing production of databases and it identified uncertainty in the database industry over the use, application and enforcement of database rights. Since then the Commission has begun to implement its Digital Single Market Strategy and, as part of this strategy is considering whether to make any changes to the Database Directive. It is also proposing to introduce a new Data Producer’s right. It is not clear exactly what the scope of this right will be. However, it is expected to cover machine-generated data of the type which would not be protected by database rights or copyright and will be coupled with a compulsory licence regime for such data (a full explanation of these proposals is set out in our briefing article here. However, none of these measures are likely to be implemented until the UK has left the European Union.

Brexit

Given the current state of the law regarding the protection of databases, the over-arching question is how will Brexit impact on this area of law?

Under the Database Directive, database rights can be enjoyed where the maker of the database:

1. is a national of a Member State
2. has their habitual residence in the territory of the Community
3. where companies and firms have either their registered office (provided there be a genuine link to the economy of the Member State), central administration or principle place of business within the Community.

As a result, once the UK leaves the EU, any databases made by a national or resident of the UK will not be entitled to protection in the EU. In order for UK databases to be covered by database rights in the EU, the UK government will need to enter into an agreement with the European Council for mutual recognition in accordance with article 11(3). Currently the only additional parties under this provision are the Isle of Man and the EEA states. On the face of it this should be a simple exercise, given that identical protection is provided. However, given the current state of flux of thinking of the EU in this area, careful attention will need to be given to how the law develops in the EU in the run-up to Brexit.