Copying Not Allowed - Search Engines Copying Databases Infringes Database Rights If It Causes Financial Detriment, says CJEU

Following an earlier opinion from the Advocate General, the CJEU set out its findings on the infringement of database rights by search engines in the indexing of other websites' content. Discussed earlier in this blog, the decision is an important one to set the potential boundaries of database rights and indexing, especially when indexing is so ubiquitous in how the Internet as we know it functions. The decision will leave some rightsholders wanting more, as now the position swings firmly in the direction of the indexing websites.

The decision in CV-Online Latvia SIA v Melons SIA concerned the website CV-Online, which included a database of job advertisements published by various employers. The website also included various metatags, or 'microdata', which, while not visible to the users of the website, contained key information to allow internet search engines to better identify the content of each page in order to index it correctly. These metatags included keywords like  ‘job title’, ‘name of the undertaking’, ‘place of employment’, and ‘date of publication of the notice’.

Melons operate a separate website containing a search engine that specializes in job ads. The search engine allows users to search a number of websites containing job ads in one go according to specific criteria that they set. The Melons' website then produces results based on that search, where users can click on links that take them to that particular job website where the ad is located (including CV-Online). Unhappy about this indexing of their content, CV-Online took Melons to court for a breach of their 'sui generis' right under Article 7 of Directive 96/9. The case progressed through the Latvian courts, ultimately ending up with the CJEU this Summer. 

The CJEU was asked two questions, which the court decided together. 

The question posed to the court asked: "whether... the display, by a specialised search engine, of a hyperlink redirecting the user of that search engine to a website, provided by a third party, where the contents of a database concerning job advertisements can be consulted, falls within the definition of ‘re-utilisation’ in Article 7(2)... and... whether the information from the meta tags of that website displayed by that search engine is to be interpreted as falling within the definition of ‘extraction’ in Article 7(2)(a) of that directive".

The court first discussed 'sui generis' rights in general, which allow rightsholders to ensure the protection of a substantial investment in the obtaining, verification or presentation of the contents of a database. What is required for a database to be protectable is "...qualitatively and/or quantitatively a substantial investment in the obtaining, verification or presentation of the contents of that database". Without that investment, the courts will not protect any databases under sui generis rights. The court assumed that this would be the case in terms of CV-Online, however, this matter would ultimately be decided by the local courts following the CJEU's decision. 

For there to be an infringement of sui generis rights there has to be an ‘extraction’ and/or ‘re-utilisation’ within the meaning of Directive, which, as summarised by the court, includes "...any act of appropriating and making available to the public, without the consent of the maker of the database, the results of his or her investment, thus depriving him or her of revenue which should have enabled him or her to redeem the cost of that investment". 

The court discussed the applicability of the above to the operation of Melons' website and determined that such a search engine would indeed fall within the meaning of extraction and re-utilisation of those databases that the website copies its information from (including in indexing that content). However, this extraction/re-utilisation is only prohibited if it has the effect of depriving that person of income intended to enable him or her to redeem the cost of that investment. This is important since without this negative financial impact the copying will be allowed under EU law.

The court also highlighted that a balance needs to be struck between the legitimate interest of the makers of databases in being able to redeem their substantial investment and that of users and competitors of those makers in having access to the information contained in those databases and the possibility of creating innovative products based on that information. Content aggregators, such as Melons, are argued to add value to the information sector through their acts and allow for information to be better structured online, thus contributing to the smooth functioning of competition and to the transparency of offers and prices.

The referring court would therefore have to look at two issues: (i) whether the obtaining, verification or presentation of the contents of the database concerned attests to a substantial investment; and (ii) whether the extraction or re-utilisation in question constitutes a risk to the possibility of redeeming that investment.

The court finally summarised its position on the questions as "...Article 7(1) and (2)... must be interpreted as meaning that an internet search engine specialising in searching the contents of databases, which copies and indexes the whole or a substantial part of a database freely accessible on the internet and then allows its users to search that database on its own website according to criteria relevant to its content, is ‘extracting’ and ‘re-utilising’ the content of that database within the meaning of that provision, which may be prohibited by the maker of such a database where those acts adversely affect its investment in the obtaining, verification or presentation of that content, namely that they constitute a risk to the possibility of redeeming that investment through the normal operation of the database in question, which it is for the referring court to verify".

The decision will, as said above, come as a big blow to database owners, as the added requirement of financial detriment will be a big hurdle for many to overcome in order to protect their databases from potential copying. The CJEU also notes the utility of indexing and the 'copying' of such databases by content aggregators as useful means of organizing the Internet, which leads to the question of where the limits actually are. It will remain to be seen how the decision will impact databases going forward, but one might imagine the more commercial value in a database the less likely the courts will allow copying of that database. 

Database Error - UK High Court Takes on Copyright Infringement of Cloud Databases

Databases are a curious creature within the world of IP, existing on the fringes of protectability, at least when considering from the perspective of originality. Specific rights attach to databases outside of mere copyright protection, and the remit of those rights has been debated by the courts for some time. Since the advent of cloud computing, database rights in purely 'cloud-based' technologies haven't been debated much in the courts, and the question therefore arises: do you have database rights in a cloud database? The High Court took on this issue in a recent decision handed down in late August 2017.

The case of Technomed Ltd v Bluecrest Health Screening Ltd concerned electrocardiograms and the analysis of the data created through the ECG measurements. An ECG measures the movement of electricity through a patient's heart, giving details of its health to varying degrees based on the ECG technology used. Technomed supplied ECG equipment, systems and services, including an online ECG analysis and reporting system called "ECG Cloud". The platform allows for ECG information to be analysed externally (the information itself is reviewed remotely by a qualified cardiologist) when taking the readings, offering a simplified analysis using three colors to indicate the heart's health status. The analysis is done using resources in Technomed's database, including characteristics of ECG readings and their associated issues. Technomed licenced its technology to Bluecrest, and after a relationship breakdown proceedings were initiated to protect the rights in the database and its reporting format, which were passed onto a competitor (the second Defendant in the case) by Bluecrest.

The crux of the case revolved around sui generis rights in the database (protection of the money, time and effort put into the database, rather than), copyright in the database, copyright in the reporting software that produces the results from ECG Cloud in XML format, and copyright in various other peripheral elements of the system, e.g. images and explanatory materials.

After assessing the decision of Fixtures Marketing Limited v OPAP, Deputy Judge Stone concluded that Technomed's database was a database as defined under the Database Directive, meaning "…a collection of independent works, data or other materials arranged in a systematic or methodical way and individually accessible by electronic or other means". Even so, Technomed still had to establish a sui generis right in that database.

Sui generis rights are afforded to a database under the Directive, in essence, when the maker shows substantial investment in obtaining, verifying and presenting the data in the database, derived from pre-existing information. The Court quickly determined that there had been substantial investment in the above by Technomed (taking hundreds of hours to do so), affording them a sui generis right in the database.

Infringement of sui generis rights in databases falls under the Directive as well, happening when the data is 'extracted' and 're-utilized' by another party. As Bluecrest had extracted the whole database, which was then provided to the competitor, it infringed Technomed's right in the database. Additionally, should a party repeatedly and systematically reproduce the database, it will also infringe on the sui generis rights afforded. Bluecrest repeatedly produced the XML reports from the database, prejudicing Technomed's legitimate interests in the database until the reports were updated to no longer infringe in 2016.

Even databases have feelings

The Court then moved onto the matter of copyright in the database under section 3A of the Copyright, Designs and Patents Act 1988. As both parties agreed that the assessment for copyright protection is the same as for the sui generis right (as set in Football Dataco v Brittens), Judge Stone quickly concluded that the database had copyright in it. Similarly, as the sui generis right was infringed, the copyright in the database was also infringed. While he didn't need to address the alternate pleading in infringement of a literary work in the database, Judge Stone nonetheless concluded that the database was a literary work (a PDF copy of it) and that it was infringed by Bluecrest by copying the same.

Judge Stone then moved onto the other works, including the XML report format. For them to qualify as protected works, the works will have to be the "…author's own intellectual creation". Even though no rights were claimed in the XML format itself, the reports did, as agreed by Judge Stone, contain the personal stamp of its authors, and was protected by copyright. As Bluecrest had the report format copied by a competitor, it clearly was infringed as well.

The Court also decided that further documents, such as explanatory materials and patient definitions were also protected by copyright, but only the explanatory materials were infringed, as the patient definitions were only used as a starting point to create new definitions by the defendants.

Bluecrest did combat the infringement claims through an argument against causation, i.e. that they didn't cause any damage to Technomed through their alleged infringement. Judge Stone dismissed this out of hand, as through the clear infringement detailed above there would have been loss caused to Technomed.

Judge Stone concluded that all of the rights in the works had been infringed, but there would be no continuing threat of infringement.

While the case is by no means a landmark one, it is still a continuing reminder in database rights and their infringement, including copyright and sui generis rights. This writer always seems to forget about the strength of these rights, particularly as databases don't come across ones desk too often, so the case was an interesting and refreshing read.