British Sky v Digital Satellite Warranty: A “Made in Europe” Approach To Database Protection

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This is the re-posting of a comment first appeared on IPilogue at the following url: http://www.iposgoode.ca/2011/12/british-sky-v-digital-satellite-warranty-made-in-europe-approach-to-database-protection/

On October 27, 2011, the High Court of Justice Chancery Division ruled in favour of British Sky Broadcasting Group PLC et al. (Sky) on a summary judgment against Digital Satellite Warranty Cover Limited et al. (Defendants).

The Defendants were held liable on four separate counts of infringement, including the infringement of Sky’s database rights pursuant to Article 7 of the European Parliament and Council Directive 96/9/EC of 11 March 1996, [Directive] which has since been implemented in the United Kingdom. Article 7 of the Directive allows for the protection of a database which demonstrates a “[s]ubstantial investment in either the obtaining, verification or presentation of the contents …” either qualitatively or quantitatively.

Sky, a provider of satellite broadcasting services, communications and television equipment claimed that the Defendants “extracted substantial parts” of their client databases containing information on roughly 9.7 million clients’ names, addresses, email addresses, phone numbers, equipment and installations dates. Further, Sky established that they had invested £250 million on the development of and £300 million annually to maintain and verify their client lists.

The Defendants, citing British Horseracing Board Ltd v William Hill Organisation Ltd, argued that Sky’s data was created rather than obtained, verified or presented. In that case, it was held that creation of new “independent materials” – otherwise the underlying data – is not a valid subject for protection under the Directive because the “[p]urpose of the protection by the sui generis right… is to promote the establishment of storage and processing systems for existing information and not the creation of materials capable of being collected subsequently in a database”. An individual who can show that a substantial investment “[i]ndependent of the resources used to create those materials” was made, could obtain protection. The Court held that Sky had not created new information (except for the installation date) and instead held that they “[s]imply record[ed]pre-existing information in a systematic way” and therefore qualified for protection.

In a 2005 Evaluation Report, it was noted that the European Commission recognized that “[c]opyright protection based on the standard of “originality” alone might not be an adequate tool to protect these often considerable investments” due in part to the varying standards of originality between the Member States, and specifically between the common law and droit d’auteur jurisdictions. The Directive provides for two levels of database protection: i) copyright protection involving the intellectual effort of selection or arrangement, and ii) sui generis protection once a substantial investment is made in obtaining, verifying or presenting the data.

Databases are not protected per se via sui generis protection or explicitly in the Canadian Copyright Act. However, a database may as a ‘compilation’ – which is defined under Section 2 of the Copyright Act as the arrangement or selection of data – qualify for ‘thin’ copyright protection as long as the selection or arrangement satisfies the originality standard of “skill and judgement” as enunciated in CCH Canadian Ltd v Law Society of Upper Canada. In CCH, the Supreme Court of Canada implicitly rejected the ‘sweat of the brow’ industriousness standard recognized in the United Kingdom because it “[t]ip[s]the scale in favour of the author’s or creator’s rights, at the loss of society’s interest in maintaining a robust public domain that could help foster future creative innovation”.

Similarly, a database can be protected as a ‘compilation’ under Title 17, Section 101 of the United States Code which defines it as “[t]he collection and assembling of pre-existing materials or of data that are selected, coordinated, or arranged in such a way that the resulting work as a whole constitutes an original work of authorship”.

In Feist Publications Inc v Rural Telephone Service Co, the United States Supreme Court held that a phone book directory arranged in alphabetical order was missing the “[m]inimal creative spark” of originality required for copyright protection. Further, the Court held that the sweat of the brow standard had dangerous consequences, “[t]he most glaring being that it extended copyright protection in a compilation beyond selection and arrangement — the compiler’s original contributions — to the facts themselves.”

Protection in both jurisdictions exists in the arrangement or selection of the databases alone and not in the underlying data or facts, although protection for the original expression of those facts could be copyrightable.

In Copyright Reform and Fact-Based Works, Teresa Scassa, Professor at the University of Ottawa, Faculty of Law argues that databases that are created based on labour, investment, “whole of the universe”, or arranged in an obvious manner lack the requisite level of originality for protection in Canada and the United States (Scassa, 578-579). Therefore Sky’s database of names, addresses and telephone numbers would not qualify for protection in these jurisdictions based on the industriousness, ‘sweat of the brow’ standard of ‘substantial investment’ alone.

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