EU Database Directive

Citation: Directive 96/9/EC of the European Parliament and of the Council of the European Union of 11 March 1996 on the legal protection of databases, 1996 O.J. (L 77/20).

Overview
Pursuant to the action plan set out in its 1991 “Follow-up to the Green Paper,(122) the European Commission proposed in 1992 to harmonize the national laws within the European Union regarding the protection of databases. The Commission proposal was adopted in a modified form as a directive to the member states on March 11, 1996. The EU also expressed concern about the “very great imbalance in the level of investment in the database sector both as between the Member States and between the Community and the world’s largest database-producing third countries. In addition, the Feist decision in the U.S. Supreme Court galvanized concern regarding the adequacy of copyright protection for databases within the EU.

The directive covers compilations of data in any form, and thus includes hard copy compilations as well as electronic databases. The Commission’s original proposal was limited to electronic databases, but in the course of deliberations this approach was found unworkable, because it would subject the identical material to differing legal standards based solely on the medium employed. As one of the participants is reported to have stated, “making use of a scanner should not be decisive in granting legal protection. In addition, technologies such as scanning and optical character recognition render even hard-copy databases vulnerable to unauthorized copying and commercial reuse in both hard-copy and electronic form. Moreover, the TRIPs Agreement makes no such distinction.

As adopted, the directive establishes a dual system for protection of databases. One component is copyright protection for the “structure” of the database. The other is a sui generis (“of its own kind” — i.e., not falling within existing categories of legal protection) intellectual property right in the contents of the database.

Copyright Protection
The copyright portion of the directive, Chapter II, applies only to the structure or schema of a database, without prejudice to any existing protection under copyright for the database contents. It seeks to harmonize the scope of copyright protection for databases throughout the European Union. It does so in two major respects: First, it sets a uniform standard of originality. Second, it establishes a uniform list of “restricted acts” (i.e., exclusive rights) and exceptions to restricted acts.

Prior to the directive, copyright protection for databases in the member states could be divided into two general groups. In the U.K., Ireland and the Netherlands, the threshold for protection was quite low. In particular, Anglo-Irish common law incorporated a “sweat of the brow” doctrine that developed from the same line of 18th and 19th Century English cases that were cited in early U.S. compilation cases. In the remaining European countries, however, copyright imposed a fairly high threshold of originality to qualify for protection. This is in keeping with the “author’s right” approach that prevails throughout most of Continental Europe, which defines originality as an expression of the author’s individual personality.

The standard established by the directive requires the database to, “by reason of the selection or arrangement of [its] contents, constitute the author’s own intellectual creation." This language was incorporated verbatim from the EU’s 1991 directive on the protection of computer programs. It was originally adopted to override the very high standard of originality mandated by the German Supreme Court in the “Inkasso Programm” case and other decisions. At the same time, by requiring an “intellectual creation,” the database directive imposes a higher standard of originality than that required under current law in the U.K., Ireland and the Netherlands. The directive thus charts a middle course on the level of originality required. Although the directive’s standard of originality has not been tested in practice, the formulation appears to be quite similar to the criteria for protection under U.S. law, as set out in the definition of “compilation” in the Copyright Act and interpreted by the Supreme Court in Feist.(140)

The “restricted acts” (exclusive rights of the copyright owner) under the directive are reproduction (temporary or permanent), adaptation, distribution, and communication, display or performance to the public.(141) Authorization is not required for a lawful user to engage in any restricted act “which is necessary for the purposes of access to the contents of the database and normal use of the contents.(142) Any contractual provision to the contrary is “null and void.(143)

In addition to this mandatory exemption, the directive permits member states to provide for limitations on the restricted acts in the following cases:

(a) in the case of reproduction for private purposes of a non-electronic database;

(b) where there is use for the sole purpose of illustration for teaching or scientific research, as long as the source is indicated and to the extent justified by the non-commercial purpose to be achieved;

(c) where there is use for the purposes of public security o[r] for the purposes of an administrative or judicial procedure;

(d) where other exceptions to copyright which are traditionally authorized under national law are involved, without prejudice to points (a), (b) and (c).(144)

Such exceptions are subject to an overall economic harm limitation, ensuring that they cannot “unreasonably prejudice[ ] the rightholder’s legitimate interests or conflict[ ] with normal exploitation of the database.(145) 3. Sui Generis Protection

As a supplement to copyright, Chapter III of the directive establishes a sui generis form of protection for the contents of databases. The stated justification for this protection is that “in the absence of a harmonized system of unfair-competition legislation or of case-law, other measures are required in addition [to copyright] to prevent the unauthorized extraction and/or re- utilization of the contents of a database,” the making of which “requires the investment of considerable human, technical and financial resources while such databases can be copied or accessed at a fraction of the cost needed to design them independently.(146)

Some of the EU member states originally advocated leaving the protection of the contents of databases to unfair competition law, and the initial Commission proposal described the sui generis right as a “right to prevent unfair extraction from a database” for commercial purposes.(147) By mid-1993, however, “an increasing majority of interested parties” were reportedly favoring the creation of a property right along the lines ultimately adopted.(148) The rationale, at least in part, was the perceived difficulty in harmonizing unfair competition law throughout the European Union. In addition, the Commission has noted that “unfair competition rules only come into play once an act has taken place. They do not provide an economic right with clear scope which can be freely transferred.(149)

In some respects the sui generis right is similar to the “catalogue rule” existing in the Nordic countries, which provided a model for the Commission. That rule establishes a “related right” for factual compilations, in addition to copyright protection. The catalogue rule provides to the producer of a catalogue, table, or similar matter “in which a large number of information items have been compiled” a right against unauthorized reproduction.(150) Originality is not a requirement for protection, and the term of protection for such “catalogues” is fairly short: 10 years from publication or 15 years from creation, whichever expires sooner.

The essential features of the database directive’s sui generis right are:

a. Protection for “substantial investment.” The sui generis right is available for “the maker of a database which shows that there has been qualitatively and/or quantitatively a substantial investment in either the obtaining, verification or presentation of the contents. . .(151) “Substantial investment” is not defined in the directive. However, the recitals leading up to its provisions indicate that “such investment may consist in the deployment of financial resources and/or the expending of time, effort and energy.(152)

b. Protects against acts of extraction and re-utilization. The rights accorded under the directive are the rights to “prevent extraction and/or re-utilization of the whole or of a substantial part. . . of the contents of that database.(153) “Extraction” is defined as “the permanent or temporary transfer of all or a substantial part of the contents of a database to another medium by any means or in any form.(154) “Re-utilization” is defined as “any form of making available to the public all or a substantial part of the contents of a database by the distribution of copies, by renting, by on-line or other forms of transmission.(155)

c. “Insubstantial parts” excluded from protection. The maker of a database “may not prevent a lawful user of the database from extracting and/or re-utilizing insubstantial parts of its contents. . . for any purposes whatsoever.(156) Any contractual provision to the contrary is “null and void.(157) The directive does not attempt to define “insubstantial parts,” but does state that substantiality is to be “evaluated qualitatively and/or quantitatively.(158)

d. Exceptions for certain uses. The directive permits member states to adopt exceptions from the sui generis right for lawful users in three specific categories: (a) extraction for private purposes of the contents of a non-electronic database; (b) “extraction for the purposes of illustration for teaching or scientific research, as long as the source is indicated and to the extent justified by the non-commercial purpose to be achieved”; and (c) “extraction and/or re- utilization for the purposes of public security or an administrative or judicial procedure.(159) These exceptions are similar to those permitted under copyright, but without the additional reference to “other exceptions to copyright which are traditionally authorized under national laws.” Nevertheless, the recitals indicate that existing exemptions to any existing similar sui generis rights are grandfathered under the directive.(160)

The exceptions must be read in conjunction with provisions in the directive on “obligations of lawful users,” prohibiting lawful users of databases that have been made available to the public from “performing acts which conflict with normal exploitation of the database or unreasonably prejudice the legitimate interests of the maker of the database,” or “caus[ing] prejudice to the holder of a copyright or related right in respect of the works or subject matter contained in the database.(161)

e. Fifteen year term of protection. The term of protection for the sui generis right is fifteen years.(162) This was an increase from the ten-year term that was originally proposed in 1992.(163) Any qualitatively or quantitatively “substantial change,” including one resulting from an accumulation of small changes, “which would result in the database being considered to be a substantial new investment,” qualifies the resulting database for its own fifteen-year term of protection.(164)

f. Available to non-EU nationals only on the basis of reciprocity. The sui generis right is available only to database makers who are EU nationals or habitual residents.(165) For purposes of the directive, this would include business entities that have a business presence in the EU (defined as a central administration or principal place of business in the EU, or a registered office in the EU plus a genuine, ongoing operational link with the economy of a member state).(166) The EU can conclude agreements to extend the right to databases made in third countries.(167) Although the provisions of the directive themselves are silent as to the basis for such agreements, the recitals make clear that protection will be offered only on the basis of reciprocity— i.e., where the third country offers “comparable protection” to EU databases.(168)

The original proposal for the directive also included a compulsory license, requiring database vendors who are the sole source of any given information to license that information to competitors on “fair and non-discriminatory terms.(169) This provision proved controversial. It was dropped after the European Court of Justice imposed a similar licensing requirement under existing principles of EU competition law in the “Magill case.(170) At the same time, apparently as part of an overall compromise, changes were made in the scope of the right and the exceptions, as well as the provision on rights of lawful users.(171)

The recitals acknowledge the important role of competition policy in the database area.(172) In addition, the directive establishes a procedure for review every three years to determine, among other things, “whether the application of [the sui generis] right has led to abuse of a dominant position or other interference with free competition which would justify appropriate measures being taken, including the establishment of non-voluntary licensing arrangements.(173)