[drn-discuss] database rights: thoughts

[Rufus Pollock]

Professor Bernt Hugenholtz presented at the Cambridge IP seminar this 
wednesday on the Database Directive. Some interesting points:

   0. Database protection has been around for quite a while indirectly 
both in europe and elsewhere. Common-law traditions have generally 
granted 'copyright' based protection on the basis of skill and labour:
     1. Austrailia (Telstra)
     2. Canada (CCH - telephone directories i think)
     3. US is an exception with Feist but note this not as strong as you 
think since in other cases where there was a 'bit' of creativity in 
selection (chinese restaurants i think) copyright was granted. Of course 
US has resisted a full-on DB right
   In europe many countries have granted copyright based protection:
     1. Nordic countries have long had a 'catalogue' right (since 1950s)
     2. Germany used unfair competition and copyright
     3. Netherlands had exception with Van Dale vs. Romme even though 
had an ancient law that granted copyright in non-original stuff
   However generally continental europe tougher because requires higher 
standard of 'creativity/originality' to grant copyright

   1. EU review (which as been coming for over 3 years) will be released 
very soon (probably december). [We already knew this]

   2. Much of the Review is considering 3 options:
     1. Redo to make stronger
     2. Leave alone
     3. Repeal
   Emphasized that much of the thinking especiall on 1 /and/ 3 is 
influenced by BHB vs. William Hill which dramatically reduced the 
strength to the database right. Thought likely outcome was 'leave alone' 
(no surprise there)

   3. Suggested that where db rights did not exist contractual 
obligations were often used to replace them. He suggested this explained 
lack of pressure for db rights in the US

   4. DB Directive was restricted to EU and the hope was that it would 
force other countries to have one in order to get reciprocity 
(especially US). This has failed for US but, at least according to Dr 
Jentz Guster (hope i've got this right) the architect of the law, has 
partially worked as he claims 35 other countries have now adopted DB 
right stuff (e.g. Turkey)

   5. BHB vs. William Hill has greatly restricted the right (a good 
thing in his view).
      * Infringement must involve taking a substantial portion of the 
database and this is calculated with respect to the cost of making the 
portion taken /not/ its value (William Hill took the most valuable part 
of the db, i.e. today's races, but this was a small part of the whole db)
      * costs related to creation of data did not count as part of the 
investment in the db. Only costs related to the obtaining, verification 
and presentation will count. Since BHB created the data much of their 
investment would not count towards a DB right. The obtaining vs. 
creating distinction is a rather difficult one and will no doubt see 
more litigation before it is clarified. This follows the 'spin-off' 
doctrine which holds that the database right accrues only in investment 
that is directly attributable to the production of the database. This 
doctrine follows directly considering the economic rationale of the 
right which in promoting investment in /databases/ not in data /creation/
      * repeated extraction of insubstantial parts did not amount to a 
substantial taking

Ideas for inclusion in a submission to the Commision
====================================================

   1. Compulsory licensing. This never made it into original law due to 
lobbying (see Cornish and Llewelyn 19-43 p. 789). Could also associate 
this with a delivery requirement for sole-source producers (otherwise 
license is meaningless)

   2. Limitation/Exceptions especially for research purposes

   3. Removal of presentation basis for protection (you can get 
protection on the basis of 'substantial investment' in presentation). 
Presentation is not part of the nonrival good being protected and 
investment in it should form no basis for the grant of an exclusive right

   4. Restrict to a quantitative investment basis for evaluating taking 
and infringement. The 'qualititave' distinction, i.e. that a taking 
could be quantitatively insubstantial but qualitatively substantial 
(e.g. due to the taking of a part representing significant intellectual 
achievement)

   5. Repeal due to:
     a) anticommons type impediements (science especially)
     b) uncertainty
     c) transaction costs
     d) comparison with US
     e) effect on complementary goods markets such as software (weiss)

As Cornish and Llewelyn put it:

"There is undoubtedly an argument in favour of intervention only when a 
clear case has been made out. Industrial and commerical [ed: and 
cultural!] developments in competitive economies have always turned in 
large measure upon the borrowing of ideas. Intellectual property, 
including rights of unfair competition, should be restricted to cases 
where the borrowing is unacceptably parasitic. It should not be allowed 
to become a blocking mechanism lurking in every crevice of endeavour" 
(19-42, p. 788)

It seems to me that the dangers inherent in the DB directive with 
respect to being a 'blocking mechanism' greatly outweigh its benefits in 
preventing damaging copying especially when one considers the increasing 
prevalence of scientific and technical databases.