Computer Law & Security Report Vol. 17 no. 4 2001ISSN 0267 3649/01/$20.00 © 2001 Elsevier Science Ltd. All rights reserved

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Database Law

DATABASE LAWEXCITING FIRST OUTING FOR POWERFUL YOUNGCOLTChristopher Rees

The law is often described as a lottery.This case is related toanother form of the betting industry:horseracing.The questionthat arose for decision was the extent to which the claimantscould prevent the defendants from using, in a new part of theirbusiness, data which had been derived indirectly from theclaimants.The judge held that database right protects the unli-censed taking and use of information and that William Hill’s useof data (a) was an unlicensed act of extracting a substantial partof a database (b) the subsequent transmission of that data to awebsite for access by members of the public was a reutilizationin breach of database right and (c) a reutilization of insubstan-tial parts of the contents of the database undermined the nor-mal exploitation of the database by the claimants andunreasonably prejudiced their legitimate interest.

In horseracing terms it would be said that the claimantshad scored a ‘treble’. Their victory was emphatic and finan-cially rewarding. In giving judgment in his usual lucid mannerMr Justice Laddie has thrown useful judicial light on the newand relatively unexplored area of database law and addedconsiderably to the growing corpus of Information Law. Hisobiter dicta in this case will form the basis for discussion onthe nature and extent of database right.As usual,practitionersand students of the law alike should be grateful for the clear-sighted view taken by this judge of a complicated fact-set anda new area of law.

THE FACTS

The British Horseracing Board (BHB) is the governing bodyof the British horse racing industry. It is responsible for com-piling the Fixture List of races each year. In support of itsfunction BHB maintains a computerized collection of infor-mation (the BHB Database) which is in a constant state ofrevision.The BHB Database contains details of over one mil-lion horses, registered owners, racing colours, trainers andjockeys. It contains details of races such as the place anddate, distance, entry fee and prize money. About 800 000records in the database are made or changed each year.

In addition, a considerable amount of verification of thedata is undertaken,particularly in the period just before a raceis run. The aim being to ensure that pre-race information iswholly accurate and reliable. It was recognized that without

this virtual 100% accuracy in the information the confidenceof those involved in the racing economy, principally the book-makers and their customers, would be jeopardized.

BHB’s total expenses in a year amount to £15 million.The cost of running the database (for which 80 people areemployed) is £4 million. BHB obtains its income from feespayable by owners and racecourses. It receives £1 million oflicense income for information contained on the BHBDatabase. That information is made available on a websiteand in BHB’s journal, The Racing Calendar. It is also sup-plied to Racing Pages Ltd which makes the informationavailable to its subscribers in electronic form, normally onthe day before a race in what is known as a DeclarationsFeed.This contains an accurate up to the minute list of therunners and riders.A second supply made by Racing Pages isto Satellite Information Services (SIS) which is allowed touse the data for onward transmission to its subscribers inwhat is called a raw data feed (RDF).

WILLIAM HILL’S BUSINESS (WH)

WH is a leading bookmaker, providing its services throughtwo principal channels: (a) a network of Licensed BettingOffices (LBOs) and (b) over the telephone. Its most popularproduct is the taking of fixed odds bets on horse racing. ItsLBOs receive live data and audio coverage from SIS and WHprovides a text service of additional information which isupdated regularly during the day of each race with the latestodds and race results.

It will be seen that a great deal of the information used byWH in its horse-racing business comes, directly or indirectly,from the BHB Database.BHB did not object to any such use asit was all taken with BHB’s express or implied consent andwas covered by the license fees paid for by WH to the variouslicensors who obtain the information from BHB (RacingPages and SIS).

THE DISPUTE

What BHB objected to was the use by WH of the same infor-mation referred to above to support a new channel for WH’sbetting service: the Internet.

In the last issue of CLSR (p.194), we reported on the recent discussion in British Horseracing Board v WilliiamHill. In view of the interest in this case, Christopher Rees now offers some further reflections on its implicationsfor the development of the database right under UK law.

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WH had established its first Internet site in 1996 to promoteits telephone betting business. In 1999 it started betting onhorseracing and in 2000 it launched two new sites at whichmembers of the public can see which horses are running inwhich races at which racecourse and what odds are offered byWH.Bets can then be placed electronically.

It was not disputed that the information displayed onWH’s sites, that is the identity of all the horses in the race, thedate and time of the race and identity of the racecourse,camefrom the RDF received from the SIS. Nor that the informationcame to SIS from the data stored on BHB’s computers. It camefrom the Declarations Feed made available to SIS by RacingPages. It was also not in dispute that SIS had no right to subli-cense WH to use any of BHB’s data on its internet site,and hadnot purported to do so.

BHB maintained that as it owned database right in theBHB Database WH’s use of it in its Internet business wasunlicensed and therefore an infringement of its rights. Itclaimed that each day’s use of data from the SIS RDF was anextraction or reutilization of a substantial part of the con-tents of its database contrary to Article 7(1) of the DatabaseDirective 96/9/EC (the Directive). Secondly, the totality ofWH’s actions amounted to repeated and systematic extrac-tion or reutilization of insubstantial parts of the databasecontrary to Article 7(5).

WH’s defence to these claims required the judge to deliv-er the first comprehensive judicial analysis of the nature andextent of database right and in doing so he has greatly assist-ed our understanding of this emerging and important branchof Information Law.

JUDICIAL GUIDANCE ON DATABASERIGHTThe first important point to note is that Laddie J. proceededfrom the text of the Directive, not from the local regulationsimplementing the Directive into English law. Furthermore, byapplying a strongly purposive approach to the interpretationof the text of the Directive he has avoided some of the prob-lems which English lawyers encounter when seeking to inter-pret EU legislation too literally.As the Judge pointed out, andboth parties agreed,“understanding the objective behind thecreation of the database right… throws light on what types ofactivity amount to breaches”. Database right proves to be adeterminedly mercenary right, far removed from any notionof artistic or intellectual creativity. It is the nearest thing thelast has yet created to protect the value in information itself.

The second important point for practitioners to note isthat BHB chose to sue only on its database right. It almost certainly would have been able to claim copyright in its data-base as well, yet its lawyers elected to pursue the case solelyon the basis of infringement of the database right.This illus-trates an important truth about copyright and database right which, as the Judge said, can exist side by side in respect ofthe same database: it will generally be easier to pursue a caseon the grounds of infringement of the database right ratherthan copyright. For example, a copyright case may flounderbecause it is not possible to prove that all the components inthe copyright work were contributed by employees or con-tractors who had agreed to assign their rights to the would-becopyright owner. By contrast, ownership of database right

vests in the person who can show that he has made a sub-stantial investment in the obtaining, verification or presenta-tion of the contents of the database. Furthermore, in order toenjoy copyright protection a database must constitute theauthor’s own intellectual creation. No such cerebral hurdle isrequired for prosaic database right. It just requires money tobe thrown at it,or the expending of time,effort and energy. Incricketing terms it is the ‘Player’ to copyright’s ‘Gentleman’.(But it will be recalled that when the Gentleman took on thePlayers, it was usually the Players who won the match.)

Laddie J. stressed that this desire to protect investment liesat the heart of the new property called database right. Inexplaining the ways in which obtaining, verifying and pre-senting the contents of a database may count as ‘investment’under the Directive the Judge drew attention to two difficultareas that did not fall for decision in this case but which willno doubt give rise to case law in the future: (a) the distinctionbetween rights in the database and rights in the data withinthe database and (b) the exclusion from protection of com-puter programs used in the making or operation of databases.It is, as the Judge laconically observed, not entirely clear howone is to determine where the borderlines for each of thesematters lie, and he was content to leave them for future judi-cial assessment.

The fourth area of interest in the case lies in Laddie J.’sdetailed review of the submissions made by WH’s lawyersabout whether or not ‘a substantial part’ of the BHB Databasehad been extracted and re-utilized by their clients.The Judgedistinguished between the feature of form which has to existbefore a database will be recognized as existing, and the fea-tures of content and investment which are protected once adatabase is held to exist.A database consists of a collection ofdata brought together in a systematic or methodical way so asto be individually accessible. In copyright a literary work hasto be ‘written, spoken or sung’ before it is recognized for pro-tection.Yet infringement of that copyright is not restricted toacts of writing, speaking or singing. In the same way, underdatabase law, a collection of data in the mind of an authordoes not qualify for protection until it is put into a formwhere it is searchable.But the fact that it has to take this formbefore database right can apply to it does not mean that thedatabase right protects that form. Indeed, Recitals 38, 39 and58 of the Directive make clear that the form of a database isto be protected by copyright, and its contents by databaseright.This makes it clear that infringement of the new right isnot avoided by simply taking the contents of a database andrearranging them.What is protected is not the form, but theinvestment which went into obtaining, verifying or present-ing the contents of the database.

This leads on to the next issue which had to be considered,namely, whether the part of the database taken by the allegedinfringer represented a ‘substantial part’ of the BHB Database.Article 7(1) of the Directive requires substantiality to be judged‘qualitatively and/or quantitatively’.The Judge said that what isquantitatively substantial must be looked at by comparingwhat has been taken or used with what is in the database.Atone level this comparison would show only the names of a fewhorses on the WH Internet site, set against the millions ofentries in BHB’s vast database.However, the significance of theinformation to the alleged infringer throws light on whether itis an important part of the database.Accordingly,the Judge held

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that if one of the purposes of the database is to service busi-nesses of the same general type as that run by the allegedinfringer with the same type of information taken by him, thenthe collection, verification and presentation of that type ofinformation within the database is likely to constitute a sub-stantial part of its contents.The Judge, therefore, had no diffi-culty in finding in the present case that WH was relying on andtaking advantage of the completeness and accuracy of theinformation taken from the RDF, in other words the product ofBHB’s investment in obtaining and verifying that data.This wasa substantial part of the contents of the BHB Database.

However, that did not dispose of the dispute. BHB had toprove that WH was extracting or re-utilizing this substantialpart. After extensive debate on the matter in the hearingLaddie J. took an equally robust view.“All that is required isthat a substantial part of the contents be transferred to a newmedium.”Thus it is irrelevant for this test whether the originaldatabase is deprived of the data concerned or left with it asbefore.The only qualification to the requirement that there bea transfer is that it has to involve ‘another medium’.The Judgespeculated that a hacker who accesses a database without alicense, looks at the data and memorizes it may well not beguilty of extraction if his actions do not involve the making ofa copy of the data in material form.

THE FINAL HURDLES

As regards re-utilization, a debate arose in the case as to themeaning to be given to the phrase ‘making available to thepublic’ in the context of a database. Laddie J. firmly rejectedany suggestion that this implied that a re-utilization mustinvolve telling the public something it did not already know.In other words reutilization does not just cover secret or con-fidential information. On the contrary, said the Judge:

there is nothing in the Directive which suggests that the rightto prevent re-utilization is restricted to secret data on a data-base...What it is concerned with is the unlicensed use of dataderived without permission from a database. Private use ofsuch data are not treated as re-utilization but any use whichtransmits or makes available the extracted information to thepublic is covered by database right and can be restrained.He concluded that the information on the WH website was

such a re-utilization.The fact that the data was available to thepublic from another source (Racing Pages) was irrelevant. If theDirective had intended only to cover first publication it wouldhave explicitly said so,and in doing so would have underminedthe whole rationale of the Directive: the protection of theinvestment which goes into the making of databases.

Thus the Judge found that WH had infringed BHB’s data-base rights both by extraction and by re-utilization.

For WH, insult was heaped on injury when Laddie J. wenton to find that WH had also infringed under Art. 7(5) of theDirective.This provides that:

The repeated and systematic extraction and/or re-utilizationof insubstantial parts of the contents of a database implying

acts which conflict with a normal exploitation of that data-base and which unreasonably prejudice the legitimate inter-ests of the maker of the database shall not be permitted.The learned Judge agreed with BHB’s submission that by

putting information derived from the BHB Database onto itsInternet site without payment so as to allow bets to be placedthrough a new channel WH was undermining the other estab-lished parts of BHB’s operation. In the medium term thismight well severely undermine the value of the licensesgranted by BHB for use of data in LBOs and in its telephonebetting operation.

THE STEWARDS’ ENQUIRY

Foreseeing defeat as looking increasingly inevitable in thecourse of the case WH sought to put arguments to the judgeas to how, by manipulating the presentation of informationon the Internet site, WH could avoid subsequent infringe-ment.WH’s proposal was that instead of publishing the run-ners’ names or the race names and times there would insteadby a number given to the race (e.g.‘race 2 at Ascot’).Secondly,instead of horses being identified by name they could begiven a number. Laddie J. was at his most trenchant in hisrejection of this proposed work-around.

Database rights protect the unlicensed taking and use ofinformation. What William Hill has in mind involves themanipulation of the same information but its presentation ina different manner. This change would have no impact onthe issue of extraction. Substantially the same information,essential for enabling William Hill’s customers to place bets,would have to be extracted by William Hill from the RDF oran equivalent source. Infringement of BHB’s database rightin this respect would be unaffected. Furthermore, I do notsee how the modified method of presenting substantiallythe same data could avoid infringement by re-utilization. If adatabase happened to be written in English, an unlicensedthird party who displayed a substantial part of it would notavoid infringement by doing so in French, German orChinese ideograms, nor would he avoid infringement if hetranslated information in denary code to its binary equiva-lent. As long as substantially the same information is madeavailable on the website, the same acts of extraction and re-utilization will have taken place.In this fine style Laddie J. stormed off to the unsaddling

arena leaving BHB enjoying the pleasures of the winner’senclosure and WH counting its losses. It is rumoured that WHis seeking an early return match before the Court of Appeal.Whilst some might say that WH could bank on finding firmerground for that outing, your correspondent has no difficultyin saying that his money would remain on the Board repeat-ing its victory at that meeting, though the margin of victorymight be somewhat reduced.

CChhrriissttoopphheerr RReeeess,, Report Correspondent, Herbert Smith,London.

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