Congress Tackles Database Law
Bills seek to protect compilations from unauthorized use
By Harvey Berkman
The National Law Journal
July 22, 1999
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WASHINGTON -- Ask anyone who has tried trawling through 1,000
matches returned by an Internet search of databases, and you'll hear:
Too much information can leave one as muddled as too little, unless
it's intelligently arranged.
The rules to protect such databases from poaching or other untoward competition have been equally murky since the Supreme Court rejected copyright protection for fact compilations in 1991. Two bills are pending in separate committees in the U.S. House of Representatives that may resolve the issues arising from the subsequent use of databases by unauthorized users.
At issue in both bills are the organized collections of all sorts of information, ranging from facts as transient as stock quotes to compositions as potentially eternal as judicial decisions. Once created, others caneasily duplicate and then resell the information, often at lower cost. The task now facing Congress is how to restrict unauthorized use without limiting the ability of others to transform or add value to the information in the database.
The distinct approaches of the two bills are clear from their names. The first, the Collections of Information Antipiracy Act, is sponsored by Representative Howard Coble, R-N.C., the chairman of the Judiciary Subcommittee on Courts and Intellectual Property, and it is pending before the Judiciary Committee. The second, the Consumer and Investor Access to Information Act, is sponsored by Commerce Committee Chairman Tom Bliley, R-Va., and is pending before his committee.
Both bills seek to prevent unfair competition in the form of unauthorized copying, while thwarting the ability to lock up swaths of data and then charge exorbitant prices for access. But the measures approach the problem differently.
The Coble bill bans duplication of all or parts of databases by second-comers -- but then provides two dozen pages of exceptions for data whose accessibility must remain essentially untrammeled. The Bliley bill, by contrast, features a relatively narrow prohibition that is aimed mainly at preventing wholesale misappropriation of databases, prohibiting duplication that produces a database that is "substantially the same" as the first. And although it states that duplicating a discrete slice of a database can constitute an infringing act, it also states that the duplicator incurs liability only if the copy competes with the original for sales.
One other difference: The Coble bill creates a private right of action and includes criminal penalties; the Bliley bill places enforcement primarily in the hands of the Federal Trade Commission.
The foremost supporters of the stricter Coble bill include the National Association of Realtors -- because their home listings are easy to pirate and reproduce -- and legal publishers Reed Elsevier and Thomson Corp. (which merged with West Publishing Co. in 1996), which seek to prevent the copying of the companies' case law collections and their resale in digital form. Supporting the more lenient Bliley bill are the Consumers Union, the nonprofit publisher of Consumer Reports, as well as the Securities and Exchange Commission, Charles Schwab Corp. and Bloomberg Financial Markets, which are concerned about protecting their flexibility to compile and disseminate the 12 million stock quotations reported every day.
Mr. Coble's bill "would create a quasi-property right in facts themselves, granting the compiler of information an unprecedented right to control transformative, value-added, downstream uses of the resulting collection," Bloomberg branch manager Stuart Bell testified at a Judiciary hearing.
Also opposing the Coble bill is the American Library Association -- which has been joined by the American Association of Law Libraries and by scores of corporations and groups, including Amazon.com, the American Association for the Advancement of Science, AT&T, Dun & Bradstreet, Excite, MCI WorldCom and the Online Banking Association.
Mr. Coble's opponents also fear that the statute, by creating new law, would spur litigation. The bill prohibits anyone from reproducing a "substantial portion" of a database if doing so causes "material harm" to the market or "related markets" for the first database. That rule takes up one paragraph in the bill; exceptions to it cover 24 pages.
"You have to understand the realities of providing a club like
this to big boys like Reed and Thomson," said Alan D. Sugarman, a lawyer
who founded the New York-based HyperLaw Inc., which provides judicial
decisions and other legal materials on CD-ROMs. Mr. Sugarman fought
a long battle against West Publishing Co. over West's claim to a
proprietary interest in its page citations and in the judicial decisions
it collects. Reed Elsevier representatives did not return calls.
Spurring Mr. Sugarman's fight against West was Feist Publications Inc. v. Rural Telephone Service Co., 499 U.S. 340, the 1991 Supreme Court opinion that largely abolished the "sweat of the brow" doctrine, which granted a proprietary right to data that required work to collect.
At issue in Feist was the ability of a second company to publish its own phone book by simply typing in the names and numbers as they appeared in the phone company's directory. The sweat-of-the-brow doctrine said that the second publisher could not issue its own phone book, but in a unanimous decision, the Supreme Court rejected the well-entrenched doctrine.
The listings were simply facts, the court held, and facts are not copyrightable. Moreover, the phone company had no proprietary interest because the listings were not selected or arranged in a sufficiently original fashion to garner copyright protection.
Mr. Coble's antipiracy act explicitly seeks to reinstate the core of the sweat-of-the-brow doctrine; and even the Bliley measure would reverse parts of Feist -- which prompts some to say that while Mr. Bliley's bill is better than Mr. Coble's, both are dangerous.
"The bills go in with the assumption that something is wrong with
the Feist decision, and yet Feist is one of the most pro-competitive
decisions the court has ever issued," said Mr. Sugarman, who ultimately
won his battle against West for the right to reproduce the case law --
sans the headnotes that West adds and retains a proprietary interest in
-- after two lower federal courts ruled in his favor and the Supreme
Court denied West's petition for certiorari on June 1.
Copyright (c) 1999 ALM IP, LLC -- American Lawyer Media. All rights reserved.
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Carl Hartmann
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Received on Thu Jul 22 1999 - 14:31:33 GMT
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