Legal implication of Database rights when introduced in the Philippines
“So one begins to wonder what is going to happen to the human race. Technology keeps on advancing with greater and greater power, either for good or for destruction.”
David Bohm
I
INTRODUCTION
The day of celebration of independence varied throughout the nation’s history. The earliest record was on April 12, 1895 when Andres Bonifacio, along with Emilio Jacinto and few other katipuneros initiate new members of the Katipunan. Bonifacio let the Cry of Pugad Lawin signals the beginning of Philippine Revolution. In 1896 the Philippine Revolution began and in December 1897 the Pact of Biak na Bato, an agreement between the Spanish colonial government and the revolutionaries established a truce. Under its term, Emilio Aguinaldo and other revolutionary leaders went into exile in Hong Kong May 1, 1898 the U. S Navy defeated the Spanish in the Battle of Manila Bay, effectively putting the U.S in control of the Spanish colonial government. Later, the U.S. Navy transported Aguinaldo back to the Philippines. By June, Aguinaldo believed that a declaration of independence would inspire people to fight against the Spaniards and at the same time lead other nations to recognize the independence of the Philippines. On June 5, 1898, Aguinaldo issued a decree settling aside June 12, 1898 as the day of the proclamation of independence.1
During the revolution, Aguinaldo and other the revolutionary leaders only wanted to be freed from the Spaniards, other than that, they do not have a solid plan on how to run a country. In June 12, 1898 Philippines is not yet ready to be independent because technically speaking, the Philippines is not yet ready to be a state that time. We do not have laws of our own, because of this, we have been adopting laws and policies from other country. We are doing this to keep up with the world as it evolves.
An example law that we still need to adopt from neighboring country is the Database rights which aim to protect the collection of independent works, data or other materials which are arranged in a systematic or methodical way and are individually accessible by electronic means. This is a policy that is needed in our country because even though Philippines is far behind the other huge and power county, it is no surprise that our country can compete with them in terms of intellectual creations. The only problem is that our government fails to keep up with the pacing of the modern world.
II
DATABASE RIGHT
This is a new species of intellectual property which came into being on 1 Jan 1998. Database right protects investment in obtaining, verifying and presenting the contents of a database as distinct from the intellectual effort in creating it. Such intellectual effort continues to be protected by copyright. Thus, database right subsists independently, of but complementary to, copyright overlapping also with the law of confidence.
Database
A database is defined by reg. 6 of the Regulations as a collection of independent works, data or other materials which are arranged in a systematic or methodical way, and are individually accessible by electronic or other means. Database right can subsist in a database regardless of whether copyright also subsists. Unlike the law of confidence, there is no requirement that the database or its contents should have any commercial or other value. In C-444/02 Fixtures Marketing Limited v Organismos Prognostikon Agonon Pododfairou AE . [2004] BAILII C-444/02 the European Court of Justice held that the term “database” refers to “any collection of works, data or other materials, separable from one another without the value of their contents being affected, including a method or system of some sort for the retrieval of each of its constituent materials.” Accordingly, a fixture list for a football league such as that at issue in the case in the main proceedings constitutes a database within the meaning of that regulation.2 This is a wide definition which will cover traditional mailing lists and lists of customers as well as telephone directories, encyclopedias and card indexes, whether held electronically or in paper form. There is however a distinction to be drawn between a database and its individual components, which may or may not be protected in their own right separately from any protection afforded to the database as a whole.
Any software which is used in the making or operation of a database is specifically excluded from protection as a database, software instead generally being protected by copyright as a literary work. Nevertheless, as software is often developed in modular form, it is possible that in some cases a collection of software modules may attract protection as a database. Also, some elements of a computer program (for example, on screen look up tables which users may search in order to find information) may constitute a database.3
Subsistence
Database, like copyright, subsists automatically as soon as the database is made. There are no registration or other formalities. However, it is important to note that the qualification for database right is much narrower than for copyright. Nationality of, or residence, incorporation or having a principal basis in, an EEA state is required.
In C-203/02 British Horseracing Board and Others v William Hill Organization Ltd.[2004] ECR the European Court held that database right is intended to protect either investment in the resources used to seek out existing independent materials and collect them in the database or in those used, with a view to ensuring the reliability of the information contained in that database, to monitor the accuracy of the materials collected when the database was created and during its operation. It does not protect either the resources used for the creation of materials which make up the contents of a database or those used for verification during the stage of creation of materials which are subsequently collected in a database do not fall within that definition. On the specific issue that had been referred to the Court, namely whether resources used to draw up a list of horses in a race and to carry out checks in that connection constituted investment in obtaining and verification of the contents of a database, the Court held that it did not.
The Court reached similar conclusions in C-388/02 Fixtures Marketing Ltd v OY Veikkaus Ab {2004] BAILII C203/02, C-46/02 (a corresponding reference from Finland between the same parties) and Organismos Prognostikon Agonon Pododfairou. In the context of drawing up a fixture list for the purpose of organizing football league fixtures, which was the issue referred to the Court in that case, it held that the words “investment in … the obtaining … of the contents of a database” do not cover the resources used to establish the dates, times and the team pairings for the various matches in the league.
Copyright protection
Databases are treated as a class of literary works and may therefore receive copyright protection for the selection and/or arrangement of the contents under the terms of the Copyright, Designs and Patents Act 1988.
In order for copyright protection to arise the selection and/or arrangement of the contents of the database must be original. A special test of originality applies in relation to databases created after 27 March 1996. Such databases are 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”.
Copyright in databases therefore seeks to protect the intellectual creativity of the author. The author’s time, skill and labour must be directed to the selection and arrangement of the database, and not the mere gathering of information. Simply arranging a list of names in alphabetical order, for example, is unlikely to meet this standard.
Even if the set of data does not fall within the definition of a database, it may nonetheless attract copyright protection as a table or compilation depending on its nature. Tables and compilations are subject to the normal requirement of originality in that the author must have used his own skill and effort in creating the table or compilation.
If a database, table or compilation does attract copyright protection, this lasts for a period of 70 years from the end of the calendar year in which the author dies. Copyright protection gives a copyright owner the right to do various acts in relation to the work and the right to prevent others from doing so without permission, for example copying or adapting the work.
The copyright owner is generally the person who creates the work. This can sometimes cause confusion with commissioned works. For example a consultant will be the legal owner of copyright in a work created on behalf of the person or company commissioning it, unless ownership is dealt with contractually. However, if a copyright work is created by an employee it is the employer who is the first owner of the copyright provided the work was created in the course of the employee’s employment.
Database rights
Provided a set of data comes within the definition of a database, it will qualify for protection in its own right under the Regulations (irrespective of whether it benefits from protection under copyright) if there has been a “substantial investment” in obtaining, verifying or presenting the contents of the database.
Investment includes “any investment, whether of financial, human or technical resources” and substantial means “substantial in terms of quantity or quality or a combination of both”.
The maker of a database is defined as 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” and such person is the first owner of the database right. This definition is in contrast to that of an owner in copyright since where a database is commissioned, the commissioner will usually be the “maker” and first owner of the database right. If the database is made by an employee in the course of his employment, the employer will be regarded as the maker and therefore the owner of the database right subject to any agreement to the contrary.
A person infringes a database right if they extract or re-utilise all or a substantial part of the contents of a protected database without the consent of the owner. It should be noted, however, that extracting or re-utilising a substantial part of the contents can result from the repeated and systematic extraction or re-utilisation of insubstantial parts of the contents of a database.
There are a number of “permitted acts” set out in the Regulations. A database right in a database which has been made available to the public is not infringed by fair dealing with a substantial part of its content in certain defined circumstances, for example when someone with a right to use the database extracts data for teaching or research and not for any commercial purpose (provided they indicate the source of the material). Extraction and re-utilisation is also permitted when it is not possible by reasonable inquiry to ascertain the identity of the maker and it is reasonable to assume that the database right has expired.
Like copyright, a database right is an automatic right which exists as soon as the database exists in a recorded form. Database rights last for either 15 years from the end of the year in which the making of the database was completed or, if it was published during that period, 15 years from the end of the year in which the database was first made available to the public.
If there is a substantial change to the contents of the database then the 15 year protection period recommences. This includes a substantial change “resulting from the accumulation of successive additions, deletions or alterations, which would result in the database being considered to be a substantial new investment”.
Implementation in the UK
In the British Horseracing case, the European Court held that the words “extraction” and “re-utilisation” must be interpreted as referring to any unauthorized act of appropriation and distribution to the public of the whole or a part of the contents of a database and that they do not imply direct access to the database concerned. The fact that the contents of a database were made accessible to the public by its maker or with his consent does not affect the right of the maker to prevent acts of extraction and/or re-utilisation of the whole or a substantial part of the contents of a database. The expression ‘substantial part, evaluated … quantitatively, of the contents of [a] database’ refers to the volume of data extracted from the database and/or re-utilised and must be assessed in relation to the total volume of the contents of the database. The expression ‘substantial part, evaluated qualitatively … of the contents of [a] database’ refers to the scale of the investment in the obtaining, verification or presentation of the contents of the subject of the act of extraction and/or re-utilisation, regardless of whether that subject represents a quantitatively substantial part of the general contents of the protected database. Any part which does not fulfill the definition of a substantial part, evaluated both quantitatively and qualitatively, falls within the definition of an insubstantial part of the contents of a database. Accordingly, the prohibition laid down by the legislation refers to unauthorized acts of extraction or re-utilization the cumulative effect of which is to reconstitute and/or make available to the public, without the authorization of the maker of the database, the whole or a substantial part of the contents of that database and thereby seriously prejudice the investment by the maker.
III
CASE
William Hill and Fixtures Marketing cases
In November 2004, the European Court of Justice (ECJ) gave guidance on the application of the rules relating to database rights, significantly reducing the scope of protection given to the maker of a database under the Regulations. (Strictly speaking the ECJ considered database right principles under the EC Directive rather than the Regulations. However it is likely that the same principles will be applied to the interpretation of the UK legislation.)
The William Hill case involved a database operated by the British Horseracing Board (BHB) containing information relating to races, horses’ registration details, jockeys, fixture lists, race conditions, entries, runners etc. It cost BHB approximately £4 million a year to maintain. William Hill displayed a small, specific amount of information from BHB’s database on its website. BHB brought an action, alleging that William Hill’s use of the information infringed BHB database right.
The Court considered whether there had been “substantial investment” in obtaining or verifying the content of the database. The Court decided that the expression “investment” refers to the resources used to seek out existing independent materials and collect them in a database. The protection did not cover the investment involved in actually creating the data which made up the contents of the database. On the facts the Court found that the resources used by BHB in creating the database did not constitute substantial investment in either obtaining or verifying the contents of the database. BHB therefore had no protection under a database right.
The Court went on to consider the question of what constituted an extraction or re-utilisation of a “substantial part” of the contents of a database. The Court observed that the question could be addressed either quantitatively or qualitatively. In order to determine whether the data constituted a substantial part in the quantitative sense, the data extracted or re-utilised must be assessed in relation to the total volume of the content of the database. The use by William Hill of the information from the database represented a very small part of BHB’s whole database. There was therefore no extraction or re-utilisation of a substantial part in the quantitative sense.
In order to determine whether the data constituted a substantial part in the qualitative sense, the Court said that reference must be made to the scale of investment in the obtaining, verification or presentation of the contents of the database that are extracted and/or re-utilised. Since no separate effort had been employed to obtain, verify or present the particular part of the database used by William Hill, such part could not be substantial.
In the Fixtures Marketing cases, Fixtures Marketing Limited (“FML”) brought actions against three defendants, Oy Veikkaus AB from Finland, AB Svenska Spel from Sweden, and Organismos Prognostikon Agonon Pododfairou AE (OPAP) from Greece. FML alleged that all three organisations had extracted and/or re-utilised data from football fixture lists for the English premier league and its Scottish equivalent, which FML develops and administers at a cost of over £11.5 million a year.
As in the William Hill case, the Court ruled that only investment to seek out existing materials and collect them into a database will give rise to a database right. Resources used for the creation of materials that make up the database will not be sufficient to give rise to protection.
The Court held that neither the obtaining, verification, nor presentation of the contents of a football fixture list reflected substantial investment which could justify protection by a database right. FML could therefore not rely on a database right to prevent the use of its data by the defendants.
What should be taken from the ECJ’s ruling?
The following points should be noted following the ECJ ‘s decision:
- Protection given to the maker of a database by a database right is not as wide as was previously thought.
- Database rights only arise where the maker of the database has invested substantially in obtaining or verifying data from independent sources.
- Investment in actually creating data which forms part of a database will not automatically result in a database right. Organizations creating data must make separate investment in the organization and arrangement of the database itself in order to gain protection.
- Remember that a database can attract copyright as well as database rights. The reduction in the scope of protection under database rights may mean that the makers of databases seek to rely more on copyright in order to protect their investment
REFERENCES
https://en.wikipedia.org/wiki/Independence_Day_(Philippines)