15

The industrial property right protection of the producer of adatabase-- Some reflections on the future of European and Japaneseprotection schemes -Invited Researcher: Frank Gotzen(*)

The purpose of our research is to confront the European state of affairs with the Japanese
understanding of database protection and the benefits of a specific producers’ protection in thisarea.
The European Directive 96/9/EC of March, 11, 1996 decided to introduce, apart from the
copyright protection of a database, an entirely new type of industrial property protection in favourof the producer of a database. Protection is made dependent on qualitatively and/or quantitatively
substantial investment in either the obtaining, verification or presentation of the contents of adatabase.
Fears had been expressed, especially in the United States of America, that this new type ofright might lead to a monopolisation of the data contained in the database. However, on
November 9, 2004 the European Court of Justice delivered a series of judgements which made it
clear that the scope of this sui generis right does not reach so far and that it is intended only toprotect substantial investment in a database against the counterfeiting of its structural elements.
Just as those unfounded fears seemed to decrease came this surprising announcement from theEuropean Commission, which had been the inventor of the sui generis scheme, that it had started
doubting about the usefulness of its own construction.
The situation thus seems to be moving, a remark that might be true for Japan also. Japan ispresently reconsidering its position on the matter in order to know if it would be desirable to go
further than copyright for protecting databases and to also introduce some form of unfair
competition rule that would lead to a specific producers’ protection in this area.

I

current state of affairs in Europe with theactual Japanese reflections on this subject.

Introduction

The European Directive 96/9/EC of
March, 11, 1996 decided to grant, apart fromthe copyright protection for the author of an
original database, an additional exclusive
right to the so-called “maker” of a database.
Japan is presently reconsidering its
position on the matter in order to know if itwould be desirable to go further than theexisting copyright protection for databases
and to recognize also some form of specificprotection for non-original databases. It is
the purpose of our research to confront theII

The international discussions

1

The precedent of the European
Directive
The history of the European Directive on
the legal protection of databases starts in theyear 1988. The text of the proposals finallybecame the Directive 96/9/EC of 11 March
1996 on the legal protection of databases. As
in the initial proposals, two main aspects(*) Professor at the Faculty of Law, Catholic University, Leuven and Brussels (K.U.Leuven and K.U.Brussel)
Director of the Centre for Intellectual Property Rights (CIR)

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may be distinguished, one concerning theprotection of databases by copyright and theother concerning the establishment of an
entirely new sui generis right. This last
aspect of the Directive introduces a new
industrial property type of right for the
benefit of the maker of a database, in order toprotect his investments in this field.

III The existing copyright protectionin Europe and Japan1

The harmonized copyright protectionin Europe
The database Directive obviously draws on
earlier European Directives when in Article 3,
paragraph 1, it states that “databases which,by reason of the selection or arrangement of
their contents, constitute the author’s own
intellectual creation shall be protected as suchby copyright”. This phrasing was intended toharmonise the criterion for copyrightprotection of databases, which was alreadygranted in almost all the Member States, albeit
under dissimilar conditions.
By stressing that the criterion forprotection should lie in the “selection or
arrangement of their contents”, the Directive
highlights the fact that such protection will be
independent of protection that might be
granted to component materials. In addition,
the Directive specifically states in Article 3,
paragraph 2, and in Article 13 that its scope
does not extend to database content and shallbe without prejudice to any rights, inparticular copyright, subsisting therein.
Recital 18 explains that authors of pre-existing
works or holders of related rights over works or
subject matter that could be stored indatabases consequently remain free to decideon the principle and on the form of such a
reproduction.
In the second sentence of Article 3,
paragraph 1, the Directive stresses that “noother criteria shall be applied” to determine
whether databases are eligible for copyrightprotection.
With regard to the ownership of rights, itwill be noted above all that the rule on salaried
authors, which featured in the Commission’s
proposal, was dropped from the Directive.
According to the initial text “where a computer
program or database [is] created by an
employee in the execution of his duties orfollowing the instructions given by his
employer, the employer exclusively shall beentitled to exercise all economic rights in the2

The
EuropeanandAmericanproposals in Geneva
Shortly afterwards, the European
Community and its Member States
submitted a proposal for the introduction ofsui generis protection of databases at theworld-wide level.
Most interestingly, at that time, theUnited States of America also submitted a
proposal on the same subject of a sui generis
protection of databases. It was then assumed
that one of the aims of a Diplomatic
Conference, to be held in December 1996,
would be to adopt a “Treaty on Intellectual
Property in Respect of Databases”.
However,the
WIPO
Diplomatic
Conference 2-20 December 1996, adopted two
new treaties, the WIPO Copyright Treaty andthe WIPO Performances and Phonograms
Treaty, but not the Database Treaty, which
was left for a later occasion.
The reason for this delay was in fact achange in attitude of the US delegation,
which had become sensitive in the meantime
to critics from the home front.
3

The anti sui generis movement in
America
Large parts of US research and sciencecircles had become increasingly reticent
towards such new legislation. It was broadly
claimed that a European type of sui generis
system would lead if not to a monopoly ofknowledge, then at least to a privatisation ofscientific data. Fears were even expressed thatthe progress of science would be blocked.

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the like in force at the time of the making of
the work”. As a consequence, once these
conditions are met, the copyright on an
original database created by employees willright from the start belong to their employer.
This solution applies to both the economic
rights and the moral rights.

computer program or database so created,
unless otherwise provided by contract”. This
text has been removed and is now included as
an option only in one of the introductory
recitals. So national law will determine towhom the economic rights of employees will
belong. As to the moral rights they will vest in
the creator of the database anyway, because
the Directive didn’t want to include them in its
scope.
The Directive also lists acts for whichauthorization by the author is required and the
mandatory and optional exceptions thereto.
One of these must be the freedom for the lawfuluser to perform all acts necessary for access toand normal use of database content.

IV The new sui generis protection in
Europe1

The definition of the sui generis rightin Chapter III of the Directive
The main feature of the Directive is tocreate a new economic right to protect thesubstantial investment of a database makerin either the obtaining, verification orpresentation of the contents. This investment
may be of a quantitative nature, such as a
deployment of financial resources. But it may
also consist in a qualitative effort like theexpending of time and energy.
One could say that the European
Directive is putting the maker of a databasein a position that is somewhat similar to theone of a producer of phonograms in the fieldof music.
The section upon the sui generis rightdefines two new categories of restricted acts:
extraction and re-utilisation.
The right applies to the whole or asubstantial part of a database, which meansthat an insubstantial part is not protected by
the sui generis right. However “the repeatedandsystematic
extraction
and/orre-utilization of insubstantial parts of thecontents of the database implying acts whichconflict with a normal exploitation of thatdatabase or which unreasonably prejudice
the legitimate interests of the maker of thedatabase shall not be permitted”.
The Directive allows for a few exceptions.
Article 9 authorises Member States tostipulate that lawful users may, without the
autorisation of the maker:(a) extract substantial parts of non-electronic
databases for private purposes;(b) extract substantial parts for the purposesof illustration for teaching or scientific2

The classic copyright protection inJapan
Databases are defined in Article 2 (1)(xter) of the Copyright Act of Japan as “anaggregate of information such as Articles,
numericals
ordiagrams,
which
issystematically constructed so that suchinformation can be searched for with the aidof a computer”.
Article 12bis on “database works” in its
first paragraph is protecting as independentworks “databases which, by reason of theselection or systematic construction of
information contained therein, constituteintellectual creations”.
According to the second paragraph of thesame Article 12bis “the provision of thepreceding paragraph shall not prejudice therights of authors of works which form part ofdatabases defined in that paragraph”.
With regard to the ownership of rights,
we must however also mention Article 15 (1)of the Copyright Law of Japan which, for all
sorts of copyright works, stipulates that “theauthorship of a work (except a program work)
which, on the initiative of a legal person orother employer (hereinafter in this Article
referred to as "legal person, etc."), is made by
his employee in the course of his duties and ismade public under the name of such legal
person, etc. as the author shall be attributed
to that legal person, etc., unless otherwise
stipulated in a contract, work regulation or
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prevent unauthorized extraction and/or
re-utilization does not in any way constitutean extension of copyright protection to merefacts or data (and)… should not give rise to
the creation of a new right in the works, dataor materials themselves”.
How is this apparent contradiction to beresolved? In the system of European Union
Law unclear wordings in Community
legislationcanbeclarifiedthroughinterpretation of the Court of Justice,answering questions referred to it by national
judges under the system of “preliminary
ruling”. This is what a British judge didconcerning the database of the British
Horseracing Board and what Scandinavian
and Greek judges did concerning English
football fixtures. In all the cases involved,
bookmakers, who were setting up betting
services had wanted to freely take therelevant information from existing databases
containing updated records of which horses
were being run in particular races or oflistings of the football competition. The
makers of these databases opposed this,claiming they had invested substantially intheir databases. The Court found howeverthat most money and time had been invested
in the collection of data prepared for a
purpose separate from the making of thedatabase. The investment in setting up the
database itself had not been so substantial.
The interesting thing is that, in deciding
so, the Court centred the range of the sui
generis right on its very purpose, which is not
to protect investment in data, but rather theinvestment in the setting up of the databasethrough “the obtaining, verification orpresentation of the contents”. This is to saythat the sui generis right is only intended toprotect investment in what constitutes theessence of the activity of a database maker,
namely the structuring of the information, oras the Court put it, the “data storage andprocessing systems”. What really counts isinvestment in content processing, not incontent production.
The consequence of these judgements isfirst of all that many databases will not
qualify for sui generis protection. But, more

research, as long as the source is indicatedand to the extent justified by the
non-commercial purpose to be achieved;(c) extract and/or re-utilise substantial parts
for the purposes of public security or an
administrative or judicial procedure.
This catalogue of exceptions is very shortindeed and mostly restricted to the right ofextraction. It contains no compulsory licencesystem for sole-source databases. And where
sui generis right and copyright overlap thismay lead to incongruences, because copyrightallows for more exceptions.
Protection will last for 15 years, and that
period may be renewed if there has been
substantial new investment.
The sui generis right is conferred inaddition to the other existing rights. In
particular, the sui generis right may apply
cumulatively with the copyright protection ona database if the prerequisites for bothregimes are fulfilled. It is without prejudice
to possible rights over the contents.
The new right being of a special type, notcovered neither by any of the traditional
international agreements on the protection of
intellectual property rights, nor by the TRIPS
agreement, the European Community is notbound to grant any national treatment to the
makers or right holders of databases made inthird countries.

2

The interpretation of the sui generis
right by the Court of Justice
The way the Directive circumscribes theobject of this sui generis right is rather
ambiguous. In its Article 7 it seems to centre
on the protection of “substantial parts of thecontents”. This is what many commentators
lead to the conclusion that Chapter III on thesui generis right would be a protection
scheme for the contents itself of a database,as opposed to Chapter II on copyright thatwould only provide for a protection of theselection or the arrangement of the contents.
It is also the reason why many commentators
criticised the new right, as leading towards amonopoly on data. Reading the recitals 45
and 46 of the Directive we learn however that
this was not the intention as “the right to4
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or other materials arranged in a systematicor methodical way and individuallyaccessible by electronic or other means”. It
appears that, just as the Court said “the legal
protection provided by the Directive isintended to encourage the development ofsystems performing a function of ‘storage’and ‘processing’ of information”. This meansthat the whole Directive is intended toprotect, and to protect only, structuralelements. It is indeed the system and themethod of arranging the data and making
them individually accessible that turns aloose collection of items into a database,searchable in an efficient manner.
To conclude we may therefore say thatstructure is the real object of the protection
throughout the whole Directive. If thestructure is creative “by reason of theselection or arrangement of their contents”,
Chapter II grants copyright protection to theauthor of the database. If this same structure
shows a substantial investment “in either theobtaining, verification or presentation of thecontents” Chapter III provides for a sui
generis right for the maker of the database.
Therefore, neither Chapter II, nor Chapter
III will protect contents in itself.
Thus, after BHB and Fixtures, there is
no more reason to fear any legal monopoly on
information itself. If, nevertheless, some data
happen to be protected it will be out of theirown individual qualities, and not because of
the impact of the database Directive. This isexactly what Article 7, paragraph 4 wants tosay when it declares that the sui generis
right “shall apply irrespective of eligibility of
the contents of that database for protection
by copyright or by other rights. Protection of
databases under the (sui generis) right shallbe without prejudice to rights existing inrespect of their contents”.

importantly, these decisions contributed to abetter understanding of the basic principlesof the Directive, which tends only to protect
database structures, not database contents.
This same interpretation remains valid
when it comes to define the scope of the sui
generis right. The owner of this right will beentitled to prevent the extraction and/or
re-utilization of the whole or of a substantial
part of the contents of a database. Also, therepeated and systematic extraction and/or
re-utilization of insubstantial parts of thecontents of the database implying acts whichconflict with a normal exploitation of thatdatabase or which unreasonably prejudice
the legitimate interests of the maker of thedatabase shall not be permitted. But here
also the Court stressed that the correct
assessment of what is to be considered as
being a “substantial” part is depending on thevalue, not of the extracted single data, but on
the value of organised data structures.

3

The real range of the sui generis rightin the light of Chapter I of the
Directive
If we try to summarize our findings we
could say that before the BHB and Fixture
judgments the dominant opinion was that a
distinction had to be made between the
copyright on a database, intended to protect“selection and arrangement of contents”, andthe sui generis right protecting the content
itself. After the BHB –Fixture cases it has
now become clear that content is not in itself
the object of the sui generis right. Rather it is
the “organised” content what the sui generis
protection is about. It are the data that havebeen arranged in a searchable format
through a substantial process of obtaining,
verification and presentation.
The clue for a correct reading of the sui
generis right might lie, not in Chapter III
itself, but rather in Chapter I of the Directive.
All too often one tends to forget that thisintroductory Chapter is defining the scope of
the whole Directive, and thus also of Chapter
III. In Article 1.2 it is said that “for the
purposes of this Directive, 'database` shallmean a collection of independent works, data
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V

The renewed discussions in
Europe and Japan1

The re-examination of the Directive inEuropeIn December 2005 the DG Internal

complicated by the entering into force of themore recent Directive on Copyright in the
Information Society.
Because of the interactions between both
Directives it seems absolutely advisable tocombine the present Database revision
exercise with the more general evaluationthat the Commission is anyway obliged to
produce for the Directive on Copyright in the
Information Society.

Market and Services of the European
Commission published a “Working Paper”,
containing an evaluation of the Database
Directive. Its general setting is surprisingly
critical towards a legislative instrument of
which it had itself led the foundation.
Public consultation on this document
was opened during the year 2006, resulting
in 55 contributions from not only producers
and users but also from academic andgovernmental sources. As to the more
extreme policy options proposed it is no
surprise to see that many more contributors
preferred the doing nothing approach above
the repeal everything one. And concerning
the more moderate approach of amending the
Directive many more contributors would liketo improve the provisions on sui generis
protection, rather than to repeal them. The
problem is that some of these contributors
asked for a broader definition of the sui
generis right, whereas others would like to
see more exceptions to it.
The conclusions of this exercise are notyet known. So we can only try to convey somepersonal impressions. First of all we thinkthat the doubts expressed on the economic
impact of the Directive are not based on solid
statistical material.
Secondly, we do not feel that the case lawof the ECJ would have “curtailed” the sui
generis right. On the contrary, as we
explained above, the interpretation by the
Court seems to have redefined this protection
system along the lines of what is precisely thecore business of the database industry,
namely to invest in the processing of data. It
thereby prevents any legal monopoly on
content, and thus answers the main criticism
addressed to this Directive.
Thirdly, we have the impression that if
the Directive could do with someamendments, these would be most urgently
required in the sector of the exceptions to therights. In particular
the exceptions contained in the Directive forthe benefit of teaching and scientific research
are too narrow in scope.
Concerning exceptions it must be added
however that this issue has been utterly

2

The reflexion on the extension ofprotection in Japan
There is no sui generis right protectionin Japan. Nevertheless, we can observe someprudent moves towards increased protection
for the database industry.
It is not that the database producers
would urgently need the recognition of an
own right. Article 15 (1) of the Copyright Law
of Japan already puts the employer in the
comfortable position of being the owner of all
the rights on an original database created byhis employees. As a consequence, and incontrast to the situation in many European
countries, the call by the database industry
for the recognition of an own exclusive righthas under this respect been less urgent thanin the E.C. Nevertheless, the fact remainsthat compared with the regime of a sui
generis right there still is a protection deficit
for the expensive but non-creative database.
This is why Japanese database producers
want something more than copyright. What
this something should be remains a matterfor discussion.
There is first of all the option to interpret
existing statute law in an extensive way so as
to protect databases not constituting
intellectual creations. This solution requires
judges to interpret existing Acts in a dynamicway.
We can indeed find some case law on thebasis of Article 709 in the Civil Code.
Nevertheless it must be stressed that on thebasis of such case law, the only relief that can
be claimed is damages. No injunction can be
granted.
Another existing legal text that could be
used for the protection of non-creative
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database will appear as a useful complement to
the more classic copyright protection. This
would also make it possible to break thestalemate in international discussions in orderto achieve the indispensable consensus in anarea that is not only in the interest of Japanand Europe, but also concerns the world-wide
information society.

databases would seem to be the Act on the
Repression of Unfair Competition. The
predominant view still seems to be thatdatabases do not fall under this text andthere is no case law that would support the
opposite view.
Another option for enhancing theprotection of databases would be theintroduction of new specific legislation. The
first possibility here would be to amend
Article 2 of the Act on the Repression of
Unfair Competition by adding to the list of
specified unfair practices a new item which
would make it illegal to copy or tocommercialise a database that shows asubstantial investment. While discussions
are still going on as regards this possibility,
there is still no actual text proposal on thetable.
Amendment of the legislation on unfair
competition would normally only provide
protection against other competitors and notprovide for a full exclusive right, enforceable
against all sorts of users. This last result
could only be achieved if a consensus were to
be found for the introduction of a new
industrial property right. This would be thesecond possibility for new legislative action,
which would imply that the example of theEuropean countries consisting in the
adoption of a sui generis regime would haveto be followed. The dominant opinion seems
however to be that, at the present stage, itwould be too early to take such a step andthat it would be better to wait for theoutcome of the ongoing revision exercise of
the European Directive.

VI Conclusion
There is evidently a whole range ofsolutions that must make it possible tostrike a fair balance between right-holders andusers of databases. If Japan decides to better
protect non-creative databases and if Europe
contains its sui generis right within reasonable
limits, not monopolising information, we could
find common ground where the industrial
property right protection of the producer of a7
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