Background
Facts
Decision
Comment
The publisher of a database of general practitioners' practices has succeeded in its claim that a "substantial part" of the contents of its database had been extracted by a direct marketing company. The judgment of the Patents County Court in Beechwood House Publishing v Guardian Products Limited(1) provides useful guidance on how to assess what amounts to a 'substantial part' on both a quantitative or qualitative basis. In particular, the judgment confirms that a qualitative assessment is based on the level of investment involved in collating the database.
Regulation 16(1) of the Copyright and Rights in Databases Regulations 1997 provides that if a person "extracts or re-utilises all or a substantial part of the contents" of a database without the owner's consent, this constitutes an infringement of the database right in the database. Furthermore, Regulation 16(2) stipulates that "extraction or re-utilisation of insubstantial parts of the contents of a database", if done repeatedly and systematically, can also constitute infringement.
Beechwood House Publishing publishes a database entitled "Binleys Database of GP Practices" which is comprised of the names and addresses of individuals working at or associated with the practices, such as practice nurses and doctors. This information is used by third parties to distribute marketing material. Among the details of the individuals in the database, Beechwood plants 'seeds' - false names with corresponding addresses that are in fact the homes of Beechwood's managers.
The first and second defendants, Guardian Products Limited and Precision Direct Marketing Limited, provide direct marketing information and database marketing services, respectively. In April 1997 a company called Bespoke Database Organisation Ltd entered into a licence agreement with Beechwood to use a section of the database that contained details of practice nurses to mail marketing material. Bespoke Database Organisation had agreed to delete these records after using them once only, but instead copied them into its own database.
The defendants purchased Bespoke Database Organisation's database in 2006 and loaded it onto their system, thereby incorporating the details of the practice nurses originating from Beechwood's database. About 6,000 of the records that were transferred were identical to those on Beechwood's database; a further 2,300 were likely to have come from Beechwood, but had been updated and were therefore no longer an exact match.
About a year later, the defendants and a client company used the database for a mailing exercise. At this point, following further updates, 4,783 of the records were identical to those held by Beechwood. One of the seed addresses on the database received the marketing material from the mailing exercise and Beechwood was alerted to the fact that its database had been copied.
The judge accepted that the loading of the practice nurse records onto the defendants' databases was an act of extraction. The main issue was whether a substantial part of Beechwood's database had been extracted for the purposes of Regulation 16(1). A further question was whether the repeated extraction of individual data items amounted, in total, to the extraction of a substantial part under Regulation 16(2).
British Horseracing Board v William Hill(2) established the test for assessing a 'substantial part'. In that case the court decided that whether a part of a database is substantial can be assessed on a quantitative or qualitative basis. The quantitative approach requires a comparison of the number of records extracted with the volume of data in the entire database. The qualitative approach is based on the investment required to collate the database, in terms of both financial investment and human effort.
Applying British Horseracing Board v William Hill, the judge found that on a qualitative basis, assembling the database required Beechwood to send out questionnaires to thousands of establishments and to follow up with regular telephone calls to confirm that the data was up to date. Beechwood spent around £82,000 annually on conducting this research and a further £30,000 on capturing data and undertaking quality checks. Based on this evidence, the judge found that "significant human and financial investment" had been required to obtain the data extracted, whether that was 6,000 or 4,783 records.
From a quantitative point of view, the judge decided that a numerically substantial part would not necessarily consist of the majority of records in a database. The total number of records in Beechwood's database was about 43,000, so that 6,000 and 4,783 amounted to 14% and 11% of the database, respectively. The judge considered that 14% and 11% are at the low end of what one might consider substantial. However, considering the effort required in collating and maintaining the data, even 11% was a substantial percentage.
The judge considered the extraction of insubstantial parts of the data in order to conduct the mailing exercise, and whether such extraction could be considered sufficiently repeated and systematic to amount to a substantial part. He decided that it could be, and further commented that the purpose of Regulation 16(2) was to prevent the circumvention of Regulation 16(1). In British Horseracing Board v William Hill the court stated that if the insubstantial parts extracted could be combined to rebuild the database, this would amount to infringement. In the current case it was possible to reform the database from the individual records extracted; therefore, the mailing exercise was a further infringement under the regulations.
Cases concerning database infringement under the regulations are relatively infrequent. As such, this judgment is a useful discussion of what will amount to a 'substantial part' of a database. The court confirmed the test in British Horseracing Board v William Hill by assessing substantiality on a quantitative and qualitative basis. Considerable emphasis was placed on the amount of time, money and human effort involved in assembling and updating Beechwood's database. Consequently, the judge also found that a relatively low percentage of data can amount to a substantial part, provided that the investment required to obtain this data was considerable. It seems to follow that extracting a relatively small part of a database that is expensive and time consuming to collate will amount to infringement. Conversely, if a database is relatively basic and inexpensive to maintain, a much larger part must be extracted in order to constitute infringement under the regulations.
For further information on this topic please contact Clive Thorne or Henry Priestley at RPC by telephone (+44 20 3060 6000), fax (+44 20 3060 7000) or email ([email protected] or [email protected]).
Endnotes
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