Bulgarian legal info battle reaches Luxembourg

Today was database right day in Luxembourg where the Court of Justice of the European Communities, in Case C‑545/07, Apis-Hristovich EOOD v Lakorda AD, a reference for a preliminary ruling from the Sofiyski gradski sad (Sofia City Court, Bulgaria).

In short, Apis sued Lakorda, seeking cessation of the allegedly unlawful extraction and re-utilisation by Lakorda of substantial parts of its modules ‘Apis pravo’ (‘Apis law’) and ‘Apis praktika’ (‘Apis case-law’), which form part of a general legal information system. Apis also sought damages. According to its claim, Apis said it was a database-maker which made a substantial investment in the compilation, verification, systemisation and updating of the databases of the product modules ‘Apis pravo’ and ‘Apis praktika’. Its principal activities linked to that investment werre "digitalisation, conversion, correction, technological processing and consolidation of the texts of legislative measures, and legal editing". Former Apis employees left the company's software department to found Lakorda which, Apis maintained, unlawfully extracted substantial parts of its modules, enabling Lakorda to make and sell its own modules ‘Balgarsko pravo’ (‘Bulgarian law’) and ‘Sadebna praktika’ (‘Case-law of the courts’), forming part of the general legal information system ‘Lakorda legis’.

According to Apis's claim, Lakorda extracted the texts, in their consolidated version, of more than 19,700 documents, comprising normative measures that were then in force, measures amending or repealing earlier measures, and non-normative measures. A further 2,500 documents, being earlier versions of legislative measures from 2001 to 2006, were extracted from ‘Apis pravo’ and reutilised in ‘Lakorda legis’. Thus 82.5% of the total number of documents contained in that product module were extracted and re-used by Lakorda. Said Apis, this was a substantial part, evaluated quantitatively, of the content of that module. Apis also said that 2,516 unpublished judicial decisions, obtained by it with the permission of the relevant courts and which it collected in its ‘Apis praktika’ module, were extracted by Lakorda and incorporated into ‘Sadebna praktika’ module: bearing in mind the particular value of unpublished case-law, that represents a substantial part, evaluated qualitatively, of ‘Apis praktika’. Apis claimed that the extraction and re-utilisation by Lakorda also concerned the data connected with those documents, such as cross-references between them and the legal definitions of certain terms and concepts.

Denying legal liability, Lakorda said its ‘Lakorda legis’ system was the fruit of a substantial, independent investment of around BGN 215,000. Establishment of the system involved a team of software specialists, lawyers and managers and was based on original computer programs for the establishment, updating and visualisation of databases, allowing data to be processed and information to be accessed faster and more efficiently than by other legal information systems. In addition, its modules had a fundamentally different structure than those of Apis. According to Lakorda, it relied on its contacts with various national and European authorities as well as publicly accessible sources and the official websites of national institutions and courts, which explained the great similarity of the contents of its modules and those of Apis and the presence, although limited, of features similar to Apis’s modules. Finally, official measures adopted by State bodies were not covered by copyright in Bulgaria.

Much discussion turned on Article 7(2)(a) of Directive 96/9, which defines “extraction” as "the permanent or temporary transfer of all or a substantial part of the contents of a database to another medium by any means or in any form". Faced with various difficulties in interpreting Bulgarian law and the Database Directive itself, the court stayed the proceedings and referred the following questions to the Court for a preliminary ruling:

"1. How are the terms “permanent transfer” and “temporary transfer” to be interpreted and to be delimited in relation to each other for the purpose of:

– determining whether extraction within the meaning of Article 7(2)(a) of Directive 96/9 … from a database accessible by electronic means has taken place[?]

– at what point in time is it to be assumed that extraction within the meaning of Article 7(2)(a) of Directive 96/9 … from a database accessible by electronic means has taken place[?]

– what is the significance, for the assessment of extraction, of the fact that the content of a database extracted in this way has served to create a new and amended database?

2. Which criterion is to be applied in interpreting the concept “extraction of a substantial part, evaluated quantitatively” if the databases are divided into separate subgroups and are used in these subgroups, which are independent commercial products? Is the size of the databases in the entire commercial product or the size of the databases in the relevant subgroup to be used as the criterion?

3. In interpreting the concept “a substantial part, evaluated qualitatively”, is the fact that a certain type of data allegedly extracted was obtained by the database maker from a source which is not generally accessible, so that it was possible to procure the data only by extracting them from the databases of that very database maker, to be used as a criterion?

4. What criteria are to be applied when determining whether extraction from a database accessible by electronic means has taken place? Can it be regarded as an indication that extraction has taken place if the maker’s database has a particular structure, notes, references, commands, fields, hyperlinks and editorial text and these elements are also found in the database of the person who has committed the alleged infringement? In the carrying out of this assessment, are the various original organisational structures of the two opposing databases relevant?

5. When determining whether extraction has taken place, is the computer program/the system for database management material if it is not part of the database?

6. Since, according to Directive 96/9 … and the case-law of the Court of Justice of the European Communities, “a substantial part of the database from a quantitative and qualitative point of view” is linked to substantial investment in the obtaining, verification or presentation of a database: how are these concepts to be interpreted in relation to legislative measures, and measures having individual application, which have been adopted by executive State bodies and are publicly accessible, to their official translations and to case-law?"

Without having the advice of an Advocate General's Opinion, the Fourth Chamber of the Court ruled as follows:

"1. The delimitation of the concepts of ‘permanent transfer’ and ‘temporary transfer’ in Article 7 of Directive 96/9 ... is based on the criterion of the length of time during which materials extracted from a protected database are stored in a medium other than that database. The time at which there is an extraction, within the meaning of Article 7, from a protected database, accessible electronically, is when the materials which are the subject of the act of transfer are stored in a medium other than that database. The concept of extraction is independent of the objective pursued by the perpetrator of the act at issue, of any modifications he may make to the contents of the materials thus transferred, and of any differences in the structural organisation of the databases concerned.

The fact that the physical and technical characteristics present in the contents of a protected database made by a particular person also appear in the contents of a database made by another person may be interpreted as evidence of extraction within the meaning of Article 7 of Directive 96/9, unless that coincidence can be explained by factors other than a transfer between the two databases concerned. The fact that materials obtained by the maker of a database from sources not accessible to the public also appear in a database made by another person is not sufficient, in itself, to prove the existence of such extraction but can constitute circumstantial evidence thereof.

The nature of the computer program used to manage two electronic databases is not a factor in assessing the existence of extraction within the meaning of Article 7 of Directive 96/9.

2. Article 7 of Directive 96/9 must be interpreted as meaning that, where there is a body of materials composed of separate modules, the volume of the materials allegedly extracted and/or re-utilised from one of those modules must, in order to assess whether there has been extraction and/or re-utilisation of a substantial part, evaluated quantitatively, of the contents of a database within the meaning of that article, be compared with the total contents of that module, if the latter constitutes, in itself, a database which fulfils the conditions for protection by the sui generis right. Otherwise, and in so far as the body of materials constitutes a database protected by that right, the comparison must be made between the volume of the materials allegedly extracted and/or re-utilised from the various modules of that database and its total contents.

The fact that the materials allegedly extracted and/or re‑utilised from a database protected by the sui generis right were obtained by the maker of that database from sources not accessible to the public may, according to the amount of human, technical and/or financial resources deployed by the maker to collect the materials at issue from those sources, affect the classification of those materials as a substantial part, evaluated qualitatively, of the contents of the database concerned, within the meaning of Article 7 of Directive 96/9.

The fact that part of the materials contained in a database are official and accessible to the public does not relieve the national court of an obligation, in assessing whether there has been extraction and/or re‑utilisation of a substantial part of the contents of that database, to verify whether the materials allegedly extracted and/or re-utilised from that database constitute a substantial part, evaluated quantitatively, of its contents or, as the case may be, whether they constitute a substantial part, evaluated qualitatively, of the database inasmuch as they represent, in terms of the obtaining, verification and presentation thereof, a substantial human, technical or financial investment".

The IPKat is still trying to puzzle this out.  The questions and answers, taken together, seem to be couched in a manner that rather fudges the difference between what constitutes an unauthorised extraction and how the burden of proof should be addressed.  Merpel says never mind the law, let's rejoice in the fact that, so far as we can tell, this is the first intellectual property ruling to be given on a reference from Bulgaria.  It's good to see once of the most recently admitted members of the EU playing its part in that splendid pageant of creation of pan-European IP norms.

More about Lakorda ("The European Information Leader" -- is it really, asks the Kat!) here
More about Apis here