Student Projects:Database Protection:DavidMossSection
David Moss' Section
BACKGROUND
On a policy level, there are at least three potential avenues for Database Protection that merit consideration: (1) the body of existing case law protecting “Hot News” may be extended; (2) the existing Copyright regime may be imitated; or (3) the current status quo (i.e. lack of specific rules) may be left unchanged. In order to analyze these options, a brief discussion of copyright protection (for compilations/databases), preemption by the Copyright Act (the “Act”), and the “hot news” cases is required.
The Copyright Act and Compilations
Section 103 of the Copyright Act offers protection to “compilations and derivative works.” A compilation is defined as a work formed “by the collection and assembly of preexisting materials or of data that are selected, coordinated, or arranged in such a way that the resulting work as a whole constitutes an original work of authorship.” Clearly, a database (if protected under the Act) is to be considered a compilation. Compilations, in order to be protected, must satisfy (among other things) section 102(b) of the Copyright Act (prohibiting the protection of ideas, concepts, principles, etc.). The question, with respect to compilations, is, to what extent are they protected? The answer is set forth in the statute as follows:
The copyright in a compilation…extends only to the material contributed by the author of such work, as distinguished from the preexisting material employed by the work, and does not imply any exclusive right in the preexisting material. The copyright in such work is independent of, and does not affect or enlarge the scope, duration, ownership, or subsistence of, any copyright protection in the preexisting material.
In 1991, the Supreme Court clarified and interpreted the issue of protection for compilations in a case referred to as “Feist.” The basic holding of the Court in Feist is that, in compiling a work (i.e. database), effort alone will not trigger protection under the Act; there must be “some minimal degree of creativity.” Even if a compilation is protected, that protection only extends to the expression of the underlying facts (the facts themselves are not protected).
The Copyright Act and Preemption
The Act expressly preempts state law(s) in certain situations. Case law has clarified that a state law is preempted by the Act where (1) the work that the state law purports to protect “fall[s] within the ambit of copyright protection,” and (2) the state law asserts a right or rights equivalent to the exclusive rights protected by federal copyright law(s). A plain language reading of the statue and case law indicates that any attempt to protect the underlying facts/data in a database is expressly preempted (and so prohibited) by the Act. The “Hot News” cases mark an exception to that rule. The “Hot News” Cases
(1) The INS Case: The case giving rise to the concept of protection for hot news is referred to as the INS case. In the INS case, the issue revolved around one news reporting agency, INS, allegedly pirating news broadcasts from a different news reporting agency, AP, and redistributing the material to INS subscribers. It is worth noting that because of time changes and West Coast/East Coast issues, the INS subscribers were sometimes getting the news earlier then were the AP subscribers. The Court in INS held that although there is no right to the underlying news itself (i.e. facts), in that specific situation INS should be prohibited from redistributing AP’s material “until its commercial value as news to [AP] and all of its members has passed away.” The holding was based on the theory that INS was misappropriating material that AP put together (i.e. that INS was being unjustly enriched).
The basic idea is that compiling the news reports required a substantial input of time, money, and other resources, and so a second comer should not be allowed to compete with the compiler and profit from the compiler’s work by simply copying the material.
(2) The Motorola Case: Significant clarification of (and limitation to) the INS case was made in a case referred to as the Motorola Case. The defendant (Motorola, doing business as SportsTrax) was sending basketball scores and statistics to pagers with close to “real time” updates (for a fee, of course). The Plaintiff (NBA) recognized that it had no property interest in the scores and statistics themselves but claimed that the material should be protected under the “hot news” theory developed in INS. The court disagreed and allowed Motorola to transmit the information.
The holding is significant because the court recognized that allowing INS type claims involves avoiding the statutory preemption requirements of the Act. Given that the claims are an exception to the Act (and so, presumably, narrowly construed), the Motorola court limited INS-like claims to cases where:
(i) a plaintiff generates or gathers information at a cost; (ii) the information is time-sensitive; (iii) a defendant’s use of the information constitutes free riding on the plaintiff’s efforts; (iv) the defendant is in direct competition with a product or service offered by the plaintiff’s efforts; and (v) the ability of other parties to free-ride on the efforts of the plaintiff or others would so reduce the incentive to produce the product or service that its existence or quality would be substantially threatened.
Generally speaking, Motorola limited and defined the applicability of INS.
(3) The PGA Case: a more recent case that discussed (and distinguished) Motorola may be referred to as the PGA case. Much of the PGA case revolves around anti-trust and monopoly issues, however, the case pulls out some important elements of Motorola. In the PGA case the Plaintiff (Morris Communications) wanted access to PGA real-time scores for free. In its arguments regarding property rights, Morris analogized the case to Motorola for the premise that scores are not proprietary information and so are not protected (absent a hot news exception). The factual layout of the two cases, however, is not analogous and so the court refused to apply Motorola.
To make a long story short, the scores in the Motorola case were obtained by employees of Motorola who would watch an NBA game on television (or listen on the radio) and input the data as they viewed the event. In PGA golf events, however, the only way to get real time scores for all the players was to a special system that was developed and implemented by the PGA. This real time information was available at a command post on the tour grounds and certified members of the media were allowed access to the information as well as authority to publish the information. The authority to publish, however, was limited by license and the scores could not be transmitted to websites or other broadcast media until 30 minutes after the shot or until the PGA made the information available to the public. The second comer in PGA did not have access to all the real time scores without going through the PGA (i.e. the scores were not yet in the public domain). In Motorola, however, the scores were in the public domain (through television or radio broadcast) as so were no longer proprietary information when accessed and re-published by the second comer. The bottom line comment on Motorola (by PGA) then, is that one need not give out compiled material for free, but, once it has been broadcast/published, the underlying information is no longer protected absent a hot news exception.
POLICY CHOICES
Imitation of Copyright Law
One potential avenue for protecting databases involves imitating copyright law. This involves creation of federal legislation that provides databases with protection similar to that currently offered to qualified works under Copyright law. While this is undoubtedly attractive to parties who develop and maintain databases, it is questionable on several levels.
The Act is empowered by Constitutional language that reads, in relevant part, as follows: “Congress shall have Power…To Promote the Progress of Science and useful Arts, by securing for limited Times, to Authors and Inventors, the exclusive Right to their respective Writings and Discoveries.” It would be a stretch to find that compilation of a database qualifies one as an author or inventor and so extension or modification to the Act itself may run into constitutional problems. Therefore, legislation under this approach would presumably have to come from the Commerce Clause. Even so, the legislation would conflict with the Act in so far as the Act has explicitly addressed the issue of compilations and so the Act would have to be modified.
Extension of the Hot News Exception
A second potential avenue is to extend the protection available to certain “hot news” to certain databases. The databases entitled to protection under this theory would presumably be limited in scope similarly to the news that is entitled to protection. This may involve only protecting (1) time sensitive material, (2) that is developed at a cost to the first creator of the database; and (3) for a limited time only. This would seem to take into account and apply the justifications and theories developed in the hot news cases. Additionally, it may avoid the constitutional implications that creating a copyright-like regime would trigger.
Retaining the Status Quo
A third potential avenue is to simply leave things as they are (i.e. institute no new laws/extend no laws protecting databases. Whether this approach is prudent takes us back to the big policy question of “do we need additional protection for databases.” Developers and managers of databases will generally say yes; schools and libraries will generally say no. The bottom line societal question becomes, if we leave things the way that they are, will companies lose any incentive to develop and maintain databases? If the incentive is lost, and the databases are not created, then society, as a whole, is losing out. However, as things currently stand, it is unclear whether there is truly a need for additional database protection. Potentially, the enactment of the EU Directive creates a need for database protection because absent database-specific legislation (that is equivalent to the EU Directive) U.S. databases will not be entitled to protection in countries that utilize the EU Directive.
CURRENT LEGISLATION UNDER CONSIDERATION
HR 3872 vs. HR 3261
The current database legislation pending in the “Consumer Access to Information Act of 2004” (“CAIA”). The CAIA was introduced on March 2, 2004 and is an alternative to proposed legislation entitled “Database and Collections of Misappropriation Act of 2003” (“DCMA”). Under the proposed CAIA, the Federal Trade Commission would be responsible for oversight and enforcement of the act and private parties would not be authorized to sue under the title .
The CAIA prohibits “misappropriation of a database” and goes on to define “misappropriation of a database” as follows;
(1) a person (referred to in this section as the “first person” generates or collects the information in the database at some cost or expense;
(2) the value of the information is highly time-sensitive; (3) another person’s (referred to in this section as the “other person”) use of the information constitutes free-riding on the first person’s costly efforts to generate or collect it; (4) the other person’s use of the information is in direct competition with a product or service offered by the first person; and (5) the ability of other parties to free-ride on the efforts of the first person would so reduce the incentive to produce the product or service that its existence or quality would be substantially threatened.
This definition is a more narrow definition then the DCMA has proposed. The DMCA would make it illegal to take a “quantitatively substantial” part of the information in a database and make it commercially available in the same market (without authorization) if:
(1) the database was created and maintained through “substantial expenditure of financial resources”; (2) the unauthorized use of it “occurs in a time sensitive manner and inflicts injury on the database”; and (3) the abilities of the unauthorized users to “free ride on the efforts” of the owner threaten the “incentive to produce the product” and consequently the existence of the database.
Under the DCMA anyone who either created or maintained a database would be protected from unauthorized use of the information in it. Opponents of the DCMA (largely schools and libraries) suggested that the DCMA utilizes ambiguous language (which would result in increased litigation); challenges (or eliminates) traditional “fair use” exceptions; does not allow for the transformative uses of information; does not include any “first sale” provision; does not include safeguards against monopolistic pricing; and raises fundamental questions about the relationship between the proposed legislation and copyright law. The end result, opponents fear, will be reduced competition in the database market and higher prices for libraries and schools.
Proposed Legislations Relation to Policy Approaches
Looking back to the potential avenues for database protection, the DMCA proposes protection that is similar to that of Copyright protection (perhaps even greater) while the CAIA proposes protection that appears to be codification of the hot news protection available under case law. Obviously, the CAIA is thought more favorably of by opponents of database legislation in general than is the DMCA. Although it is unlikely that either bill will pass, the CAIA marks a move towards more compromising legislation; hopefully a sign that some type of resolution may be reached in the near future.
CONCLUSION
After reviewing Copyright Statues and case law as well as non-copyright (i.e. “hot news”) case law, it is interesting to see the manner in which proposed legislation mirrors the legal history. Even much of the proposed language is taken directly from case law. There seems to be a huge push to get some type of legislation passed. That push presumes that there is a real and immediate need for such legislation. Given the explicit language found in the Copyright Act, as well as the Constitution, that question (whether there is a real need) is of paramount importance and the answer ought not to be assumed.
17 USC § 103 17 USC § 101 17 USC § 102(b) 17 USC § 103(b) Feist Publications, Inc. v. Rural Telephone Service Co., 499 U.S. 340, 111 S. Ct. 1282, 113 L. Ed. 2d 358 (1991). Id. Id. 17 USC § 301(a) providing: “On and after January 1, 1978, all legal or equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright as specified by section 106 in works of authorship that are fixed in a tangible medium of expression and come within the subject matter of copyright as specified by sections 102 and 103, whether created before or after that date and whether published or unpublished, are governed exclusively by this title. Thereafter, no person is entitled to any such right or equivalent right in any such work under the common law or statutes of any state.” See Harper & Row, Publishers, Inc. v. Nation Enter., 723 F.2d 195, 200 (1983), rev’d on other grounds, 471 U.S. 539, 105 S. Ct. 2218, 85 L. Ed. 2d. 588 (1985). International News Service v. Associated Press, 248 U.S. 215, 39 S. Ct. 68, 63 L. Ed. 211 (1918). Id. Id. National Basketball Association v. Motorola, Inc., 105 F.3d 841 (2d Cir. 1997) Id. Id. Id. Morris Communications Corp. v. PGA Tour, Inc., 117 F.Supp.2d, 56 U.S.P.Q. 2d 1952, 28 Media L. Rep. 2544 (M.D. Fla. 2000); Morris Communications Corp. v. PGA Tour, Inc., 235 F. Supp. 2d. 1269, 31 Media L. Rep. 1642 (M.D. Fla. 2002); and Morris Communications Corp. v. PGA Tour, Inc., 364 F. 3d. 1288, 70 U.S.P.Q. 2d 1446, 32 Media L. Rep. 1513 (11th Cir. 2004) (all opinions contain discussion of Motorola). Id. Id. Id. Id. Id. Article I, Section 8, Clause 8. House Report 3872; Sec. 1. House Report 3261. HR 3872; Sec. 4(a). HR 3872; Sec. 2(b). HR 3261; Sec. 3(a).
