In most areas of intellectual property, international treaties have had the positive outcome of aligning the grounds on which creators of works of authorship, inventors and users of words and/or logos to designate their products and services can receive the protection of the law in a consistent way in both the U.S. and the EU. There is however one particular area in which the EU has – and has done so as early as 1995 – deemed important to create a sui generis (i.e. unique) protection, and that is in the area of databases.
Indeed, the EU took the view more than 20 years ago that there would not be high levels of investment in modern data storage and processing systems unless creators of databases enjoyed a strong and homogeneous degree of protection for their work across the EU. The Directive 96/9/EC of March 11, 1996 on the legal protection of databases explained at the time that the creation of databases required much more human, technical, and financial resources than simply copying or otherwise accessing already existing databases required. The unauthorized extraction and/or reuse of the content of databases could have very damaging economic and technical consequences for their creators.
In France, the unique importance of protecting the contents of databases was recognized as early as 1978 at the time when the Commission nationale de l’informatique et des libertés (CNIL), the French data protection authority, was created. Looking at it from a data protection standpoint, the unauthorized access to the content of databases could have a damaging impact on individuals’ privacy. But back in 1978, the control that the French data protection regime afforded to such content did not contemplate the expropriation of databases, i.e., of the actual carrier of the data sets. Therefore, addressing the particular unauthorized access to and/or use of databases was seen as critical to ensure the free movement of personal data within the EU and ensure the harmonized protection of individuals’ private life, one of the fundamental rights of individuals in the EU under Article 8 of the European Convention on Human Rights. The objective of the 1996 Directive was to ensure an adequate and homogeneous level of protection to databases, as data carriers (v. to the content itself, which was already protection under data protection law), through a fair level of financial compensation for their creators.
Under EU law, databases are therefore both protected under copyright law, as copyright databases, and as databases protected by the database right. The definition of “database” does apply to both types of databases even though the two rights are quite different. That’s important to note as the contents of a database need not themselves qualify as works of authorship under copyright law (as is the case for data or other materials) but, if the contents are protected by copyright or other rights, such as by privacy laws, such rights are not prejudiced by the sui generis protection of a database as a database under the 1996 Directive and EU Member State laws.
Under Article 3(1) of the Directive “…databases which, by reason of the selection or arrangement of their contents, constitute the author’s own intellectual creation shall be created as such by copyright. No other criterial shall be applied to determine their eligibility for that protection.”
In its Article 7(1), the Directive states however that “Member States shall provide for a right of 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-utilization of the whole or of a substantial part, evaluated qualitatively and/or quantitatively, of the contents of that database.”
This is in itself a very important distinction with the way that databases are protected in the U.S. under the copyright law. In the EU, the copyright and database right are quite different. Even so, both rights may subsist in the same database, copyright protection is based on “intellectual creation” whereas the database sui generis right is based on “substantial investment”. Furthermore, the rules for the scope, entitlement and infringement of the two rights are quite distinct, even though both rights can be enforced cumulatively.
In France, the 1996 Directive was introduced into national law by the Law 98-536 of July 1, 1998, and was codified by way of an amendment to Article L. 112-3 of the French Intellectual Property Code, which deals with the law on copyright:
“The authors of translations, adaptations, transformations or arrangements of works of the mind shall enjoy the protection afforded by this Code, without prejudice to the rights of the author of the original work. The same shall apply to the authors of anthologies or collections of miscellaneous works or data, such as databases, which, by reason of the selection or the arrangement of their contents, constitute intellectual creations.
Database means a collection of independent works, data or other materials, arranged in a systematic or methodical way, and capable of being individually assessed by electronic or any other means.”
The protection is valid for a period of 15 years, renewable in the event of that creators can show having implemented significant enrichments to the database.
On 15 April 2019, the Council of the European Union approved finally approved the new EU Directive on Copyright in the Digital Single Market 2016/0280, which forms part of a bundle of legislations known as the EU Copyright Directive. Member states of the EU now have two years to pass appropriate legislation to incorporate the Directive’s requirements into their national law. This new EU legislation, which aims to harmonize EU legislation with international law, to strengthen intellectual property protection, to reduce conflicts in copyright laws between member states, and to assure adequate remuneration to content producers, however does not fundamentally amend the law in the EU as regards the protection of the work of creators of databases.
Besides the specifics of the creation of the sui generis protection for databases in the EU, it’s important to note that the U.S. “copyright” system and the EU continental “authors” rights’ system stand on different philosophical bases. For U.S. companies, particularly companies whose business model is substantially centered around the creation and monetization of digital assets, that do or plan to do business in continental Europe, it is very important to understand what these bases are and their implications for their international business development plans.
In the U.S., copyright is frequently justified on the basis of economic grounds, e.g. that authors would have no incentive to create or innovate unless in return they are granted the exclusive rights to exploit their works, that the efforts of such authors deserve to be rewarded in their own rights, and that the fruits of their intellectual efforts should be considered as property, and monetized as such.
In contrast, in continental Europe, the law has traditionally protected the works of authors on the basis that they embody the author’s personality. As a result, for certain classes of work, such as software or databases, the standard of originality – which is the key factor for the protection of a work of authorship by copyright – appears higher in the continental system as opposed to the U.S. system where the work need not be original or creative in any novel sense to the extent it does in the EU.
A key takeaway for U.S. companies, particularly those that encapsulate in databases certain key content for them, such as technical information (trade secrets, source code, research results, genetic information), customer and supplier details, financial information and employee data, looking to increase their EU customer base and expand their commercial footprint in the EU, is to consider protecting their databases in the EU before making them available in the EU, particularly over the internet. Securing such protection for some of their key digital assets will not only allow them to enforce their rights before EU courts in the EU, but will also allow them to increase their revenues derived from the licensing of those assets to EU customers.