Legal Protection for the Database: Is There A Better Way?
Social Science Research Network
The business database is a valuable commodity. However without adequate legal protection the economic incentives required to invest in their creation, ongoing updating and maintenance will be absent. The underlying objectives of many business databases can only be achieved if they are made accessible to the public; these databases are particularly vulnerable to misuse. Although copyright law provides protection for the original structure and format of a database, judicial decisions in this area
... reveal many inconsistencies. In addition, traditional copyright law fails to address the complexity of features found in a modern database. In this article we examine decisions from the European Union, the United States and Australia and conclude that traditional copyright protection for the modern database is inappropriate. We analyse the structure of the 21 st century business database and explain how copyright could protect specific features of this structure in a more nuanced fashion. As an alternative we consider the use of compulsory licensing as a suitable tool for protecting the economic value of the database. First, because copyright protection arises automatically without any requirement for formalities, such as registration the existence of copyright protection for a specific database is never certain until a court rules on the matter. The second difficulty arises from the increasing structural complexity of many contemporary databases. In the 21 st century, many business databases are complex, many-layered constructions comprised of both architectural (structural design) and occupational (data element) components. In this article we challenge the notion that a published collection of poetry, which is a traditional 'collection' or 'compilation' as envisioned by the Berne Convention for the Protection of Artistic and Literary Works 1896 ('Berne'), is structurally identical to a vast online commercial collection of data, and should therefore meet the same standards in order to achieve copyright protection. Yet, without adequate legal protections, the commercial value of many databases is at risk. Uncontrolled and unauthorised copying and adaptation may disincentivise the welfare enhancing creation of such databases. In addition, the absence of adequate legal protection for their investments of time and finance is likely to discourage the compilers from investing further time and expense in the ongoing maintenance and updating that is essential for the ongoing accuracy and reliability of any database. Although databases containing business sensitive information, such as customer lists, can be protected as a trade secret or by explicit contractual agreements between their creators and users, these protections are not effective against outsiders to the business or the contract. Such alternative means of protection also have the disadvantage of 'locking away' facts potentially for an unlimited term and hence reducing the public domain of information. This is contrary to the public interest. Furthermore there are many categories of business databases, such as telephone directories and television programme guides, which of necessity must be made publicly available in order to achieve their commercial objectives. Similarly technological protection measures (TPMs) that can be applied to a database by its owners to lock up its infrastructure are theoretically contrary to the public interest, although in practice they are an unreliable means of protecting a database. This is because a TPM is often seen as a challenge by computer hackers and indeed there are few if any TPMs that can withstand attempts by a determined, expert hacker. Due to the limited suitability of these alternative protections for the database, reliance upon copyright protection is the more prevalent. However as we demonstrate in this article, copyright protection for the database, in its current form, has serious flaws. Although, a plethora of judicial cases and rulings in English, United States ("US"), and Australian law exist on the question of copyright in databases, the decisions are inconsistent. The financial resources invested and profit generated by many commercial databases highlight a need for more certainty and consistency at an international level in order to safeguard the foundation upon which those investments are made. Today's copying technology, which crosses all the international boundaries, has created a vast global market for information and knowledge products, the electronic dissemination of which makes both value-adding data and the personal commercial gain derived from it potentially available at very low cost all over the world. Given the ease with which computers and other digital technologies may copy, reorganise and reproduce information, failure to protect the database deprives the compiler of a meaningful incentive to produce and compile them in the first place. There are monetary and labour resources invested in the creation (gathering, selection and arrangement of data) and the maintenance of databases (regular updates, and In the next part of this article we examine copyright law as it applies to business databases in three jurisdictions; Europe, the US and Australia, 2 and identify inconsistencies which, we argue, potentially deter the creation of innovative and welfare-enhancing databases. We then present a rigorous analysis of the underlying structure of a database and the process by which this structure is created. This analysis provides the context for our argument that traditional copyright law fails to acknowledge the complexity of the modern business database and for our recommendations regarding the way that this failure could be addressed. As an alternative to copyright protection, we also explore the concept of "compulsory licensing" as a means by which value-added information products could be created, using existing databases. We conclude by arguing that compulsory licensing may better promote innovation, enhance competition and reduce the transactional costs through the operation of private markets, than reliance upon copyright law alone.