Analogies with broadcasting "emission/transmission" theory in database cases are flawed – trade mark "intended target" theory to be preferred

Summary

In a reference by the Court of Appeal in a case involving allegations of infringement of UK sui generis database right by services provided from servers outside the jurisdiction (Football Dataco & Ors v Sportradar GmbH & Sportradar, C-173/11)  the Advocate General (AG) has opined:

  • Where a party uploads data from a database protected by the sui generis right onto that party’s web server located in Member State A and, in response to requests from a user in another Member State B, the web server sends such data to the user’s computer so that the data is stored in the memory of that computer and displayed on its screen, the act of sending the information constitutes an act of ‘re-utilisation’ (and hence infringement) by that party and the act of re-utilisation performed by that party takes place both in Member State A and in Member State B.

Key points

  • In the context of the internet, the usefulness of employing conceptual constructions formulated in the context of broadcasting is "highly questionable":
  • Broadcasting law's "emission theory" (that infringement only takes place in the state from which the broadcast is made, and by analogy for databases, the infringement only takes place where the data was uploaded (i.e. in this case in Germany, outside the UK courts' jurisdiction)) should not be applied;
  • The rival broadcasting law theory, "transmission or reception theory" would have provided, by analogy, that database right infringement takes place where the customers of betting sites that linked to the offending database (i.e. in this case in the UK) received from outside the UK, data sent to their computers in response to their requests.
  • What is required instead, is "a specific construction tailored to the particular characteristics of communication via the internet and, in particular, to EU legislation which is applicable to the case and in respect of which an authoritative interpretation has been sought by the referring court"
  • The AG preferred to use the concept of "intended target" as developed in L'Oreal v eBay (2011)
  • The act of sending to a user's computer, on his request, information obtained from the UK database protected by sui generis database rights, is, "clearly … an act forming a necessary constituent part of a process of making available to the public which constitutes a re-utilisation within the meaning of Article 7(2)" of the Database Directive (96/9)
  • A series or sequence of re-utilisation actions in a number of Member States which together culminate in providing access to data "must be regarded as having taken place in each and every one of them".

Business Impact

If this AG's opinion is followed by the CJEU, claimants may no longer need to rely on proving joint tortfeasorship in order to enforce their UK rights against operators providing services or information to UK customers from servers outside the jurisdiction.  This would be a significant advantage to rights holders as joint tortfeasorhip is more complex and difficult to prove, involving the notion of common design and "making the tort their own".  The analogy with the approach taken in trade mark cases of "intended target", as opposed to the "emission theory" approach of broadcasting law, will come as a relief to database and other rights holders; the impact of actions from outside the jurisdiction on UK customers is, afterall, equivalent to actions taken within the jurisdiction.

Background

Football Dataco, The Scottish Football League and the Scottish Premier League and PA Sport (Football Dataco & Ors) organise the football leagues in England and Scotland.  Football Dataco manages the creation and exploitation of the data and intellectual property rights relating to those matches.  Football Dataco claims sui generis database rights in its "Football Live" database which is a compilation of data on matches, provided while they are in progress. Football Live provides data on goals and goal scorers, names of players, yellow and red cards, fouls and substitutions.  Great detail is collected, including the part of the body from which a goal is scored for example. The data gatherers are usually ex-professional players who attend matches and provide the information direct from the pitch side.

Sportradar GmbH (a German company) also provides live results and other information on these matches to the public via the internet via a service called "Sport Live Data" (also referred to as "Live Scores") and the website betradar.com, both provided from its servers in Germany.  Sportradar AG (a Swiss company), the parent company of Sportradar GmbH, has contracts with betting companies such as bet365 and Stan James (a UK company based in Gibraltar), both of which provide betting services aimed at the UK market and have links to betradar.com on their web pages.

Football Dataco & Ors brought an action in the English High Court against the two Sportradar companies (Sportradar), alleging infringement of sui generis database rights in the Football Live database.  The High Court held that it had jurisdiction to hear the claims brought against Sportradar  in so far as it sought to establish joint liability on the part of Sportradar with those of its customers which use its website in the UK  but that it did not have jurisdiction to hear the claim in so far as it sought to establish primary liability on the part of Sportradar. Subsequently, Floyd J held that sui generis rights did subsist in the Football Live database, that these were infringed by the betting website's UK customers but that only the wesbites, but not Sportradar, were joint tortfeasors, the involvement of Sportradar in the commission of the infringement being too far removed (for more detail, see our review of Floyd J's decision on this aspect of the claim in our article in July's edition of PLC Magazine here).

Questions referred

The parties appealed the jurisdiction issues to the Court of Appeal which referred the following questions to the CJEU:

‘Where a party uploads data from a database protected by sui generis right under Directive 96/9/EC (“the Database Directive”) onto that party’s web server located in Member State A and in response to requests from a user in another Member State B the web server sends such data to the user’s computer so that the data is stored in the memory of that computer and displayed on its screen,

  1. is the act of sending the data an act of “extraction” or “re-utilisation” by that party?
  2. does any act of extraction and/or re-utilisation by that party occur:
  1. in A only?
  2. in B only; or
  3. in both A and B?’

Infringement of sui generis database right

Under Article 7 of the Database directive (96/9):

  • 7(1) Member States shall provide for a right 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 to prevent extraction and/or re-utilisation of the whole or of a substantial part, evaluated qualitatively and/or quantitatively, of the contents of that database.
  • 7(2)(a)“extraction” means 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
  • 7(2)(b)“re-utilisation” means 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. The first sale of a copy of a database within the Community by the right holder or with his consent shall exhaust the right to control resale of that copy within the Community

This provision was implemented in the UK by the Rights in Databases Regulations 1997.

The AG's Opinion

The AG's opinion is that the only question to be answered under this reference relates to the sending of data to computers of users situated in the UK. No queries were raised about the nature, obtaining and origin of that data. Issues of the subsistence of sui generis rights or whether access to and downloading of data from the betradar.com website constituted infringement of those rights, were not under consideration in this reference. The question was simply: if data is downloaded in the UK from a server outside the UK, did the UK courts have jurisdiction to hear any infringement actions brought against Sportradar in that regard?

In the AG's analysis of whether the provision of data by Sportradar was extraction or re-utilisation, the AG reviewed the approach taken in British Horseracing Board (BHB), C-203/02, (2004), confirming, as held there, that "the concepts of extraction and re-utilisation do not imply direct access to the database concerned". 

Sportradar had contended that the acts under examination took place outside the jurisdiction of the UK courts, claiming that in order to determine where an act takes place, regard must be had to the "emission theory" used in broadcasting law.  If this was followed, Sportradar maintained, then both the sending and its prior uploading would constitute re-utilisation only in the Member State in which the server onto which the protected data was uploaded was situated. By contrast, pointed out the AG, the rival broadcasting theory, "transmission or reception theory", would say that the re-utilisation took place in the UK where the UK customers of the betting companies (which linked to Sportradar on their websites) received data transmitted from outside the UK into their computers in response to their requests.

The AG commented that "This description of the issue highlights the fact that, in the context of the internet, the usefulness of employing conceptual constructions formulated in the context of broadcasting is highly questionable."

What is required instead, opined the AG, is "a specific construction tailored to the particular characteristics of communication via the internet and, in particular, to EU legislation which is applicable to the case and in respect of which an authoritative interpretation has been sought by the referring court."

The AG preferred to use the concept of "intended target" as developed in L'Oreal v eBay (2011) (see our IP newsflash on this decision). In the AG's opinion the act of sending to a user's computer, on his request, information obtained from the Football Live database protected by sui generis database rights, is, "clearly … an act forming a necessary constituent part of a process of making available to the public which (in accordance with BHB) constitutes a re-utilisation within the meaning of Article 7(2)" of the Database Directive (96/9). The re-utilisation starts with the sending of the data from Sportradar's server and ends with the acts performed by the betting companies which culminate in the customers of those companies having access to the data sent. Since the purpose of the re-utilisation acts was the making available of the data to customers, the conclusion "must be that the "place" of the "re-utilisation" is that of each of the acts needed to produce that making available; a series or sequence of actions in a number of Member States which "must be regarded as having taken place in each and every one of them". 

The AG's answers to the questions referred were, therefore, as follows:

  1. Where a party uploads data from a database protected by sui generis right under Directive 96/9/EC of the European Parliament and of the Council of 11 March 1996 on the legal protection of databases onto that party’s web server located in Member State A and, in response to requests from a user in another Member State B, the web server sends such data to the user’s computer so that the data is stored in the memory of that computer and displayed on its screen, the act of sending the information constitutes an act of ‘re-utilisation’ by that party.
  2. The act of re-utilisation performed by that party takes place both in Member State A and in Member State B.