BHB Enterprises Plc v Victor Chandler (International) Ltd
| Jurisdiction | England & Wales |
| Judge | The Hon Mr Justice Laddie |
| Judgment Date | 27 May 2005 |
| Neutral Citation | [2005] EWHC 1074 (Ch) |
| Date | 27 May 2005 |
| Court | Chancery Division |
| Docket Number | Case No: HC05C00510 |
[2005] EWHC 1074 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
The Hon Mr Justice Laddie
Case No: HC05C00510
Mr David Vaughan CBE QC and Ms Lindsay Lane (instructed by Addleshaw Goddard) for the Claimant and British Horseracing Board Limited
Mr David Lord and Jonathan D C Turner (instructed by Tarlo Lyons) for the Defendant and Part 20 Claimants
Mr Jeffery Onions QC (instructed by Kirkpatrick & Lockhart Nicholson Graham) for PA News Limited
Hearing dates: 17–19 May, 2005
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
The British Horseracing Board ("the Board") is a company limited by guarantee which is vested with the function of administering British horseracing. It was formed in 1993 to take over some of the functions formerly exercised by the Jockey Club. According to evidence given in these proceedings by Mr Nigel Smith, its Commercial Director, the Board's current functions are:
"(1) the improvement of the financial position of horseracing; (2) funding of the administration of horseracing; (3) encouraging the maintenance and improvement of standards in horseracing, and exercising regulatory control ("Regulatory Functions"); (4) meeting the cost of the Regulatory Functions and assisting the Jockey Club; (5) encouraging and improving the breeding of bloodstock; (6) establishing the dates of Fixtures and the programme content of Fixtures; (7) considering and consulting on all questions affecting horseracing, advising and communicating views and recommendations to others, including the statutory and regulatory bodies in the horseracing industry; (8) initiating and promoting improvements in the law and local rules, regulations or practices; (9) making and publishing rules of practice and procedure for horseracing; (10) developing and maintaining programmes of training and education within horseracing; (11) each year creating the fixture list involving (currently) 1,209 race meetings in Britain annually; (12) weight adding and handicapping; (13) supervision of race programmes; (14) producing racing publications and stakesbooks; and (15) compiling data related to horseracing."
This action arises principally out of the last of these functions, namely the compiling of data. The Board maintains a computerised collection of information on a database ("the Database"). It includes a collection of information accumulated over many years by way of registration of information supplied by owners, trainers and others concerned in the racing industry. It contains the names and other details of over one million horses, tracing back through many generations. It contains details of registered owners, racing colours, registered trainers and registered jockeys. At least part of the data in the Database is collected on the Board's behalf by Weatherbys Group Limited ("Weatherbys"). In particular, Weatherbys gathers together what is called the Pre-Race Data, commonly known as the "racecard". The Pre-Race Data consists of the following details about each horse race: the venue; date of race; race times; race information (i.e. distance, flat or hurdles); horse number; horse name; course and distance; weight; age; owner; trainer; jockey and any jockey changes (prior to the day of the race); basic form (i.e. where a horse was placed in the last six races); and a description of the jockey's silks and cap.
It is one of the Board's functions not only to maintain the Database containing the Pre-Race Data, but also to ensure that it is accurate. There is no dispute that the gathering and maintenance of the contents of the Database and the Pre-Race Data is an onerous, skilled and expensive operation. For example, in 2004, 1299 race meetings took place in Great Britain consisting of a total of 8577 separate races. The Database had to contain accurate and up to date data on each race, each horse, each owner and each jockey. The Pre-Race Data is produced as a daily data feed to certain users. Apparently it costs more than £4 million annually to maintain the Database and to produce the daily feed of Pre-Race Data.
The contents of the Database and, in particular, the Pre-Race Data is valuable. For example, it is very important to bookmakers. As Mr Peter Nicoll, a witness for Victor Chandler (International) Limited ("VCI"), part of the Victor Chandler Group of bookmaking companies and the defendant in this action, says:
"22. The Pre-Race Data is essential to any bookmaking. It is not possible to run a book unless the bookmaker knows which horses are in which race."
The Board seeks to exploit this asset by selling the right to access and use it to interested third parties. This it does through a limited company, BHB Enterprises plc ("BHBE") which is, in effect, the Board's trading arm. For the purpose of these proceedings there is little difference between the Board and BHBE. Where possible, I shall refer to them together as BHB. Access to the Database is provided through BHBE. However the latter company does not provide access to the end users, such as bookmakers, directly. Instead it supplies data, including the Pre-Race Data, to another company, PA News Limited ("PA"), for onward transmission. PA collects sport related data from a variety of sources all over the world and licences it to bookmakers. As well as data from the Database, it also supplies its customers with On-Course Data, racecards for Irish and the South African horse racing, certain selected horse races in France and Japan, and for greyhound racing. It also supplies extensive data relating to United Kingdom and foreign football fixtures and data relating to the NFL, NBA, NHL and Major League Baseball events in the USA. Thus a triangular arrangement exists where the Board contracts with PA to supply the latter with Pre-Race Data on terms that the latter can, in certain circumstances, allow PA's customers to use it. PA in turn enters into licences with users, including bookmakers like VCI, which allow them to use the sports data it administers including, but not limited to, the Pre-Race Data. The customers enter into a data licence with BHBE.
Three such agreements exist in this case. First there is a data compilation and delivery agreement between the Board (and the Racecourse Association Ltd) and PA dated 28 March 2002 under which the Board gives PA access to the Pre-Race Data from the Database (for convenience I will refer to this as the BHB/PA agreement). Second, there is an agreement, effective as of 1 June 2003, between PA and Newcote Services Ltd (of which VCI is a part) under which PA makes, among other things, the Pre-Race Data available for use by, amongst others, VCI (for convenience I shall refer to this as the PA/VCI agreement). Third, there is a data licence dated 3 March 2003 between BHBE and VCI pursuant to which VCI is given a licence to use the Pre-Race Data on certain terms including the payment of a charge, currently in the region of £60,000 per month (I shall refer to this as the BHB/VCI agreement).
Before explaining the dispute which has arisen between the parties, certain other pieces of background information need to be mentioned. First, although BHB has exploited its database by licensing, amongst others, bookmakers for some years, its ability to do so appeared to be given additional strength by the enactment of the EC Directive 96/9 (the Directive). This provided for the creation, throughout the EU, of a database right. This is a new, sui generis, right, similar to copyright, in certain databases. Prior to this Directive, databases in the United Kingdom were probably protected as a type of compilation, and therefore as "literary works", under our domestic copyright legislation. It is probable that no similar copyright protection existed elsewhere in Europe or, for that matter, in the USA. The Directive not only created a pan-European database right (I understand that there is no equivalent right in the USA) but also placed limits on the extent to which databases could be protected under national copyright law. The extent of this limitation is unclear and, so far as I am aware, has not been explored either in national courts of Member States or in the European Court of Justice ("ECJ").
In March 2000, the Board commenced proceedings against William Hill, the well-known bookmaker, under the database right it claimed in the Database. William Hill was using, without permission, some of the data from the Pre-Race Data. That use was limited to the names of the horses in each race, the date, time or name of each race and the name of the racecourse (the "William Hill Extract"). In the action the Board claimed a declaration that the Database was the subject of the new database right and that the unlicensed abstraction, reproduction and use of the William Hill Extract amounted to a breach of that right. The action came on before me. The Board won on both issues. William Hill appealed in relation to the second issue but not in relation to the declaration that database right subsisted in the Database. On 31 July 2001, the Court of Appeal gave judgment. It referred certain questions to the ECJ. The Advocate General delivered her opinion on 8 June 2004. It was regarded as generally favourable to the Board's position. The ECJ gave judgment on 9 November 2004. Many observers, including VCI, considered that it severely limited the new database...
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