CJEU narrows protection afforded to database right in the EU

In February we blogged about a contentious opinion given by AG Szpunar earlier this year. On Thursday, the CJEU followed this opinion, narrowing the protection afforded to database right in the EU.

The CJEU agreed with AG Szpunar that, in enforcing database rights, “it is necessary to strike a fair balance” between the interests of database makers and those of rivals and users who have access to the relevant databases and may be creating innovative products based on information contained in them. It further followed AG Szupnar’s opinion by ruling that the main criterion for balancing these interests “must be the potential risk to the substantial investment of the maker of the database concerned, namely the risk that that investment may not be redeemed”.

Going forwards, database right holders in the EU will need to show that: (i) an alleged infringer is extracting or reutilising a substantial part of the content of the relevant database; and (ii) the complained of act of extraction/reutilisation adversely affects the right holder’s investment in the obtaining, verification or presentation of the database’s content, ie that the complained of act constitutes “a risk to the possibility of redeeming that investment through the normal operation of the database in question”.

The practical effect of the decision is likely to be that:

• those who do not directly compete with a database right holder will find it easier to exploit the investment made by that right holder without the risk of facing an infringement claim;
• the bar for bringing a successful database right infringement claim has been raised in a way that might make it difficult for database right owners to enforce their rights shortly after infringement begins (as at that stage it might be difficult to prove a risk to investment given there will be limited evidence of the effect the infringement has had on the database right holder’s business). That said, this will be sector- and data-specific – there are types of databases which by their nature (eg live sports data) are valuable only for short periods of time and in respect of which it might be easier for rights holders to prove a risk to their investment shortly after the infringing activities begin; and
• database right holders who currently make their databases publicly accessible online with a view to monetising those databases through granting licences for their commercial use, may start taking those databases behind firewalls or implementing other technical measures to protect their databases from re-use (such as measures that block scraping).

The CJEU’s ruling does not, of course, affect the position under UK database right law. Until the UK courts follow AG Szpunar’s and the CJEU’s reasoning, database right owners in the UK do not need to jump the additional hurdle of proving a risk to their ability to redeem their investment in obtaining, verifying or presenting their database’s content.

We’ve blogged about a number of interesting developments in respect of rights in data over the past couple of years and we will be keeping a close eye on future developments. For more of our thinking on managing data, see https://digital.freshfields.com/tag/data.