British Horseracing Board Ltd and Others v William Hill Organisation Ltd (Case No: CHANI/2001/0632/A3)

PETER GIBSON L.J. (giving the judgment of the court):

Introduction

On 1 January 1998 a new form of intellectual property right came into existence, database right. It was introduced by the Copyright and Rights in Databases Regulations 1997 which implemented Directive 96/9/EC of the European Parliament and Council. It is common ground between the parties that (save possibly for one point on the definition of "re-utilisation") the Regulations duly implemented the Directive. In consequence the parties have presented their arguments by reference to the contents of the Directive and little attention has been paid to the Regulations.

This case is the first to come before the English courts on database right. The Claimants, the British Horseracing Board Ltd. ("BHB"), the Jockey Club and Weatherbys Group Ltd. ("Weatherbys"), complain that the database right which they claim to own has been infringed by the Defendant, William Hill Organization Ltd. ("William Hill"). At the trial of the action Laddie J. upheld the Claimants' claim and granted them a permanent injunction against infringement of that right by William Hill. With the permission of the judge William Hill now appeals to this court.

The facts

The background facts have been stated with exemplary lucidity by the judge in his judgment and we need only summarise the salient facts to make this judgment intelligible.

BHB is the governing authority for the British horseracing industry. Its members (the Jockey Club, the Racecourse Association Ltd., the Racehorse Owners Association and the Industry Committee (Horseracing) Ltd.) are organisations representing various aspects of horseracing. It was set up in June 1993 to take over some of the administrative functions of the Jockey Club, but leaving the Jockey Club retaining the principal regulatory function within British horseracing. BHB is concerned with the creation of the fixture list for each year's racing, weight adding and handicapping, supervision of race programmes, producing various racing publications and stakesbooks and compiling data related to horseracing. In 2000 there were 1209 race meetings scheduled to be held at 59 racecourses on 327 days of the year with 7,800 races. That year there were 175,000 entries for races and 80,000 declarations to run and declarations of riders. At any one time there are 15,000 horses in training, 9,000 active owners and 1,000 trainers. Each owner must have registered unique racing colours in which his horses will run. In 1985 Weatherbys on behalf of the Jockey Club started to compile an electronic database of racing information comprising (amongst other things) details of registered horses, their owners and trainers, their handicap ratings, details of jockeys, information concerning fixture lists comprising venues, dates, times, race conditions and entries and runners. Since June 1993 the task of maintaining and developing the database has been carried out by Weatherbys on behalf of BHB in consequence of various assignments and agreements.

The database is constantly updated with the latest information, and the scale and complexity of the data kept by BHB have grown with time. The judge said that there was no substantial challenge to the pleaded assertions by BHB that the establishment of the database, at considerable cost, has involved, and its maintenance and development continue to involve, extensive work including the collection of raw data, the design of the database, the selection and verification of data for inclusion in the database and the insertion and arrangement of selected data in the database, the annual cost of continuing to obtain, verify and present its contents being approximately £4,000,000 and involving approximately 80 employees and extensive computer software and hardware.

There is a huge amount of data accumulated over the years in the database, including details of over one million horses. The database contains pre-race information for each race, covering the place and date on which the meeting is to be held, the distance over which it is to be run, the criteria for eligibility to enter the race, the date by which entries are to be made, the entry fee payable, the initial name of the race and the like. Close to the day of a race, that information is expanded to include the time at which the race is provisionally scheduled to start, the final name of the race, the list of horses entered, the owners and trainers and the weight each horse has been allotted to carry. The final stage of the pre-race information contained in the database includes the list of declared runners, their jockeys, the weight each will carry (which may differ from the allotted weight for a number of reasons), its saddlecloth number, the stall from which it will start and the owner's racing colours. After the race, details of the outcome are recorded. An estimated total of 800,000 new records or changes to existing records are made each year.

A painstaking process of verification of the pre-race information is undertaken to ensure its complete accuracy and reliability. Thus in the case of declarations made by trainers by telephone, the conversations are tape-recorded and replayed and checked by an operator other than the one who took the call against an audit report produced by the computer.

The cost of running the database is a little over 25% of BHB's total annual expenditure of £15,000,000. BHB is self-funding. Part of its income is derived from fees charged to third parties for use of information contained in the database, currently yielding an annual income of £1.2 million. Thus only a little over one third of the cost of maintaining the database is recouped by fees.

The racing information contained in the database is of interest to a wide variety of persons. First, essential extracts are made available to the participating elements of the racing industry, such as racecourse owners, racehorse owners, trainers, jockeys and their agents, by way of a Weatherbys/BHB internet website, by a database site on the Prestel network and by BHB's official journal, the Racing Calendar. The information is of interest to radio and TV broadcasters, to publications such as the Racing Post and other newspapers, to information services such as Ceefax and Teletext and to members of the public who follow horseracing.

The information, or selected parts of it, is also supplied to other interested parties such as bookmakers. Two methods of distribution are of relevance. First, data are made available to Racing Pages Ltd., a company controlled and owned by Weatherbys and the Press Association jointly. On behalf of BHB Racing Pages Ltd. makes available to subscribers in electronic form, normally on the day before a race, a Declaration Feed containing a list of races, declared runners and jockeys, distances and names of races, race times and numbers of runners in each race together with other information. Second, an independent company, Satellite Information Services Ltd. ("SIS"), is allowed to use data from the database for certain purposes including for transmission to SIS's own subscribers. SIS provides two relevant services. One is called FACTS (Full Audio and Captions Television Service) comprising television coverage, audio and captions for horserace meetings, the captions usually consisting of the race details and the racecard number of the runners in the first three places. The other is called Raw Data Feed ("RDF"), being information as to details of meetings, races and the list of runners and other related information, all supplied in electronic form.

William Hill is one of the largest bookmakers in the United Kingdom operating some 1,526 licensed betting offices ("LBOs"), as well as telephone betting services and, more recently, internet betting services. In May 1999 it started internet betting on horseracing, originally in limited form, but a comprehensive service was offered on 3 February 2000 from an overseas site and from an English site on 13 March 2000. 12. William Hill has a licence in writing dated 26 July 1996 from Weatherbys for the Declarations Feed, which it uses for its telephone betting and shop sampling systems and for publication on Ceefax, and pays a monthly fee for this service. It also has a licence in writing from SIS for SIS's FACTS service for which it pays SIS substantial fees. It uses FACTS in displays on TV screens in its LBOs, itself adding information such as betting odds which it produces. It also puts up on the walls of LBOs the betting office display edition of the Racing Post, containing even more information than is displayed on the TV screens. A copy of the news-stand edition of the Racing Post is also available in each LBO. It also pays SIS for and receives RDF. No formal contract has been entered into between SIS and William Hill, which pays SIS's invoices when presented to it. Thus there is no contractual term limiting the use to be made to William Hill of the RDF. However SIS has not purported to sublicense William Hill to use the RDF on its internet site and the judge recorded that...