Database rights may not be enforceable in the EEA in the event of a no-deal Brexit

In the digital era, the importance of collating and interpreting data cannot be underestimated. Information is a powerful tool for governments, businesses and consumers alike. The databases created and used include assets such as: contact management systems; knowledge management systems; intranets; back-office inventory systems; and purchase order systems. Given their significance and the resource taken to create or compile these databases, protecting them is crucial.

Current rights in databases

At present, rights in databases within the EEA potentially exist both in the form of copyright in the selection or arrangement of the data in the database, and a separate and legally distinct database right ('Database Rights'), in the contents of the database.

The latter was introduced by the Database Directive (96/9/EC) and provides the owner of a database the right to restrict the use of, or extraction of, data from the relevant database without their permission. Where there has been substantial investment in obtaining, verifying or presenting the contents of a database, and it was created by an EEA national, resident, or business, it will receive automatic protection in all EEA member states.

Database rights post-Brexit             

Article 58 of the proposed withdrawal agreement ('Withdrawal Agreement') provides that holders of Database Rights arising under the Database Directive before the end of the transition period will be accorded an equivalent UK right with the same term of protection as the EU right. Amendments to UK legislation to be effected via the draft Intellectual Property (Copyright and Related Rights) (Amendments) (EU Exit) Regulations 2018 ensure that there is consistency in the protection available to EEA nationals in the UK, and UK nationals in the EEA in respect of database rights.

In December 2018, an agreement in principle was made with the EEA EFTA states (Norway, Iceland and Liechtenstein) ('EEA EFTA Agreement') protecting citizens' rights and resolving separation issues as the UK leaves the EU. Article 48 of the EEA EFTA Agreement provides for the continued protection of databases, and its explanatory notes state that the effect will be that where a database qualified for protection in the UK before the end of the transition period, it will continue to be protected in the UK after the transition period has ended.

Rights owned by UK nationals that qualified for protection in the EEA EFTA states before exit will also continue to be protected. The EEA EFTA Agreement will be concluded before exit day and, alongside the Withdrawal Agreement, will be legislated for through the EU (Withdrawal Agreement) Bill.

No-deal consequences

In the event of a no-deal Brexit, the government says that it would still pursue a citizens' rights agreement with the EEA EFTA states as mentioned above. However that aside, the Database Directive provides that Database Rights only arise if the maker of the database is an EEA national, resident, or business.

Following a no-deal exit, therefore, UK makers of databases will, in the absence of agreement to the contrary, be excluded from the benefit of the right and there will be no obligation for EEA states to recognise existing, or grant new, Database Rights to UK businesses in those member states.

Action

Those creating new databases (where the creation will happen or investment will be made post-Brexit) should think carefully about where they wish to do so, as they are unlikely to be able to obtain protection in both the UK and the EU.

UK makers of databases will, instead, have to rely on literary copyright laws, data encryption and contractual restrictions over the use of data in EEA states. This is likely to present some practical obstacles to obtaining legal protection, as a database must meet the 'originality' threshold in order to qualify for copyright protection. In the light of this, it would be prudent to review existing licensing arrangements and, where possible, impose licensing terms which mitigate this potential loss of rights where copyright protection may not be available.

If you would like more information on this topic, or if you would like assistance in reviewing database licensing arrangements, please get in touch with David Thompson, Partner in our Commercial team.