Feature: Is this the end of the database right? - November 2005  

In the second part of a two-part feature, Dominic Bray and Lucy Otterwell from law firm Kirkpatrick & Lockhart Nicholson Graham assess how a major ruling impacts on the database rights of sports properties. Despite the view taken by some commentators, the lawyers feel that the European Court of Justice’s (ECJ’s) decision not to favour the British Horseracing Board over bookmaker William Hill is not necessarily the end of database right protection.

It is interesting to note that the Court of Appeal appeared to struggle with the ECJ's reasoning and was able to make sense of the ruling only by constructing an elaborate argument focussing on the official role played by the BHB. Although the BHB's database was made up of existing information (i.e. the names of runners and riders etc), the Court of Appeal interpreted the ECJ ruling as saying that, because of the BHB's official status, when the BHB put that information together in a database and published it as the confirmed and final list, the nature of the information changed. It was no longer simply pre-existing information that the BHB had obtained and verified; it was an official list created by the BHB. Jacob LJ said: "The final database… [has] the BHB's stamp of authority on it. Only the BHB can provide such an official list…if one asks whether the BHB published database is one consisting of ‘existing independent materials’ the answer is no. The database contains unique information - the official list of rides and runners. The nature of the information changes with the stamp of official approval. It becomes something different from a mere database of existing material."
The effect of this may be to limit the restrictive effect of the judgment to those in an official position akin to the BHB. If the database owner has the authority to publish "official" lists of data, whether fixtures, results, or anything else, it is likely that any investment it makes in compiling that data will be seen as investment in creating the new ‘official’ data, which will not entitle it to database right protection. Clearly this has major impact for sports governing bodies like the FA (see the Fixtures Marketing cases heard by the ECJ at the same time as BHB v William Hill). However, if the database owner has no such authority and can show that it invests in the obtaining, verification or presentation of existing data (and this will apply to many other existing databases) it is likely that the owner will be entitled to protection.

Third party verification

One option for database owners in a similar position to the BHB may be to re-structure their organisation and, as much as possible, separate the investment in obtaining, verifying and presenting of data from the investment in creating that data. It may be possible for a separate organisation to carry out the verification, for example, and licence its database rights to the ultimate database owner. However, it may be difficult for governing bodies to show that such third party verification is not part of the process of creating the 'official' data.
The problem for those in the position of the BHB is that, without the protection afforded by the database right, they may struggle to find other intellectual property rights that will assist. Copyright, for example, may protect a database as a compilation of information, but unless the individual data are the result of sufficient skill, labour and judgement to attract copyright protection (and this will probably not be the case with simple sporting fixtures or results) copyright will only protect the structure of the database, rather than the data itself.
This leaves the database owner looking to contractual arrangements to control access to and use of the data in question. One of the principal reasons why bookmakers want the information from the BHB is because it is official, because it is reliable and accurate and, perhaps above all, timely. Absent of database right protection, it may be possible to obtain the information from other sources, but it will not be as speedy or reliable as the information provided by the BHB. The ability to provide fast and accurate information is an asset for which people will pay. To protect that asset, the database owner must ensure that its contractual arrangements with distributors and customers are as watertight as possible. One difficulty that the BHB (and potentially other rights owners) will have to face is how to ensure that, in imposing effective contractual obligations, and in fixing the price at which the information is made available, it is not abusing a dominant position in the marketplace. It will be interesting to see how the Attheraces case develops and whether or not the Court finds an abuse if the matter goes to trial.
The Court of Appeal's decision in BHB v William Hill affects the very basis of the database right and raises the question whether the restrictive interpretation given by the ECJ, and now the Court of Appeal, has in effect extinguished the right that the Database Directive was intended to provide. In fact, the decision does not go that far, but it does mean that the database right is certainly a much weaker right than people might have hoped.
It is as yet unclear whether the BHB intends to appeal to the House of Lords. One would suspect not. What is clear is that database owners, and particularly those in the sporting industry, need to take careful note of the Court of Appeal's decision and take a good look at their contractual arrangements to ensure they have a secure means of protecting their investments.

Dominic Bray is a partner and Lucy Otterwell is an assistant in the Intellectual Property, Technology and Sports Department at Kirkpatrick & Lockhart Nicholson Graham LLP (+ 44 (0) 20 7648 9000 - dbray@klng.com; lotterwell@klng.com).

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