Information Property:

How far will the intellectual property regime expand?

GAO Fuping

Dear Professor Brian Fitzgerald, Justice James Douglas, ladies and gentlemen,
Good Afternoon!

It is a pleasure to be here to share with you some of my thoughts on in the future

of intellectual property law from the perspective of the rise of debates on whether
information could be property. My topic is Information Property: How Far will the
Intellectual Property Regime Expand?

1. Introduction: What Happens to Intellectual Property Law?

The scope of IP is always full of uncertainty. The reason is not only the fact that
IP has been always developing with the advances of technology and the evolution of
human’s society, but also that there is actually no universally accepted opinion on
what the intellectual property exactly is, what should be protected as intellectual
property and what should not be, and the extent to which it should be protected by law
it.

Recent years have saw two factors that fuel these debates and gives birth to
battles for or against the expansion of IP regime all over the world. The first factor is
globalization, and the other one is the prevalence of information and communication
technologies (ICTs).As a result, the IP law is now at crossroad.

(1) Firstly, the globalization

Globalization, arising after World War II, means economically, no country can
survive in isolation from the globalizing world, especially developing nations.
Globalization makes national legal system being internationalized.

While learning IP in law school, I was told was that one of the characteristics of

1
IP was that it was its territorial limitation, and it is protected mainly by state law.
However, along with the globalization, intellectual property has increasingly become
the subject of international trade and a key component of the global economy.
Accordingly, international legal systems are essential for the protection of intellectual
property.

This has not only changed the IP legal system itself (e.g. convergence of
intellectual property law and international trade policy), but also leads to a
weakened state sovereignty. A state, individually, can’t decide what is and what is not
protected, and can’t set their own standards of protection (harmonizing national
treatment of intellectual property rights). An individual state is faced with
restrictions on their capacity to use property rights to solve new external problems and
becomes more and more dependent upon IP-rich states. This has created lots of
political issues between states, especially between developed countries and
developing countries. Therefore, it has been argued by some scholars that intellectual
property is rich countries’ new way of exploiting poor countries.

(2) Secondly, ICT or the Internet

ICT has begun to change our society. We are undergoing a major cultural
revolution from an industrialized society towards an information society, a radically
new form of existence.

It enhances extremely the ability of information processing, of communication

and sharing of information. Now any information can be digitalized or stored in
digital form, and any digitalized information can be transmitted over the Internet.

In other words, Information technology makes any information be digitalized,

and communication technology (e.g. Internet) makes any digitalized information
being distributed or transmitted over the Internet.

Two models:

− Free access to information

− Information Transaction

On one hand, the Internet maximizes the capacity for people to share
information freely, on the other hand, it makes it possible for people to sell or
purchase information over the Internet.

This means information has been becoming a commodity or product. This

information-based product is:

2
 — Pure digital products, the buyer downloads the item without the need for
any physical delivery

—copyrightable or non-copyrightable, for examples: software, music,

movies, books, any valuable information etc.

The information transaction is not a sale but licensing. That’s to say, the subject
matter not the ownership of information products, but the right of the use of
information.

Information Transaction + Information Service =Digital Content Industry

Nicholas Negroponte, in his book Being Digital, suggests:

We are passing into a post-information age from information age. Chief among
these characteristics is the major shift that has occurred in terms of wherein lies the
value and resources of society. By and large today, in every industrial country and
many developing countries, the values that define the wealth of a society are shifting
from the tangible marketplace to the intangible realm of cyberspace and digital
systems. We have moved and are continuing to move from a world culture dominated
by a focus on atoms (tangibles) to one that focuses on bits of information
(intangibles).1

We are moving “from a product-based economy to an information and service

based economy”.

Question:

Commodities are entities that have intrinsic value;

Information is marketable commodities

Is what has been transferred information property?

2. How IP Law Treats Information

(1) General

Generally, intellectual property is related to information, but not all IP law

protects information itself. Copyright law protect expressions of ideas, trademark law
protects goodwill through protecting symbol (mark), the patent law protects the
exclusive use right of invention, and only trade secret law protect valuable
1
Nicholas Negroponte, Being Digita (1995). at 5

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information itself. In other words, information is under public domain in traditional
intellectual property law. Information is available for public. At least, it is reasonable
to say that information is not the direct subject matter of intellectual property right.2

(2) Copyright

(a) Limited Scope: Not all Information Work is Copyrightable

Not only do dichotomy of idea and express and other restrictions in copyright
law protect public interests, but also there is limited scope of copyright law
protection. First, only an original work is protected by copyright law or granted
copyright. That means that not all “expression” of idea or information is under
copyright law governing, the fact information or works lack of originality can’t
protect by copyright law; Second, many information works are excluded by copyright
law to be copyrightable work, e.g. news, statutes, etc.

(b) Dichotomy of idea and express results in the unprotectability of

information out of protection

Copyright law grants an author the exclusive right to reproduce the expression
contained in a copyrightable work, but excludes any protection for any of the ideas or
facts expressed [division between expression and content (idea or information)]. Once
a copyright work is sold in market, it is accessible for public and the copyright owner
has no right control the copy that user owns (the first sale principle). Under copyright
law, the information is in the public domain, e.g. information is free for the public.

Reason

Information is public goods in nature. 3 Without law granting right, it is difficult

for a person to privatize information and to protect it as his own things. (We, as users,
are not able to own information like we are able to own land or car. Information is
non-excludable and non-rival, without law granting right, information is difficult to
exclude anyone from enjoying its benefits, and one person’s use does not diminish its
usefulness to others)

For reason to provide an incentive to create works, law was created to grant
authors private property right (named copyright) for a period subject to restrictions in
law; Such limitation or restrictions preserves information as "public good" by
promoting public access to creative works. The restrictions in copyright law include:

2
In the words of Peter Drahos, however, "Intellectual property is a form of private sovereignty over a primary
good - information." Peter Drahos, "Decentring communication: the dark side of intellectual property," in Tom
Campbell and Wojciech Sadurski (eds.), Freedom of Communication (Aldershot: Dartmouth, 1994), pp. 249-279,
at p. 274.
3
Ejan Mackaay, Economic Incentives In Markets For Information and Innovation, 13 Harv. J L & Pub. Pol’y
867(Summer 1990), at 880 .

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 (1) limited duration, after that time, the work enter into public domain;

(2) the idea/expression distinction: ensuring information or idea in public

domain;

(3) the fair use doctrine: granting public reasonably use copyrighted work;

(4) the first-sale doctrine: limiting copyright owner’ right of controlling use of
their work after the first sale.

These restrictions in fact grant public or user rights or privileges for the progress
of education, science and research, for freedom of speech in general, and for the
development of new, value-adding information goods. So copyright law is not merely
grant copyright owner private right, it is an artful arrangement between rights of
copyright owner and rights of the public. So James Madison concluded that copyright
represented a unique nexus wherein the public good coincided with the interests of the
individual.4 Copyright is a useful adjunct to information policy.5

(3) Challenge arising from ICT or Internet

ICT has created a new revolution in how information is created, stored,

reproduced and disseminated; and with that has come new challenges to intellectual
property and how to protect it.

ICT makes the privatization of information or commodification of information

possible. Information is becoming commodified in this digital age.

DRM (Digital Right Management)

DRM is in fact a security measures to protect copyrighted material from

unauthorized use. Encryption, digital watermarking, and electronic fingerprinting
technologies etc. are used to limit use and track unauthorized copies distributed in
digital form. DRM or TPM has been recognized by many countries for copyright
protection function.

But, DRM technology has the potential to override copyright law. DRM
technologies could limit the access of the public to information and cultural goods.
Because it make possible for copyright owner to control the content of copyright work
that otherwise is available to public.
4
See Joshua S. Bauchner, Globalization and Democratization: The Reclaiming of Copyright, 4 Tul. J. Tech. &
Intell. Prop. 93, 93(Spring, 2002). There are similar assertions proposed by modern scholar. See e.g. See PETER
JASZI, TOWARD A THEORY OF COPYRIGHT: THE METAMORPHOSES OF "AUTHORSHIP", 1991 Duke
L.J. 455(April, 1991)(“On the one hand, copyright aims to promote public disclosure and dissemination of works
of "authorship"; on the other hand, it seeks to confer on the creators the power to restrict or deny distribution of
their works.” at 463).
5
See Jessica Litman, Copyright and Information Policy, 55 Law and Contemporary Problems 185, 186-87 (Spring,
1992).

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 Furthermore, DRM make it also possible to privatize or propertize the non-
copyrightable information work. The owner or controller of the information could
make money with licensing. Example is licensing of non copyrightable database.

It is clear that technical protection mechanisms currently being explored are

similarly a two-edged sword.

Information licensing: Information as subject matter

Another legal measure is licensing-----contract.

− License as independent a Method of Information Product Transaction

whatever copyrightable or non-copyrightable work

− License as a Legal Arrangement between Information Creator and User so

that license instead of copyright law defines user’s rights.

Licensing as a method of distribution of copy, actually help licensor evade the

first sale doctrine applying to licensee. The license makes “copyright owner” own not
only copyright, but also information itself so that it put public access to information
under control by controlling copying.6 As a result, the balance between the author and
the public under copyright law has been broken.

Furthermore, the commodification of information is being explicitly encouraged

by legislation that recognizes the DRM and Licensing.

Therefore, some commenters become concerned on legitimizing information

license:

“The risk is that the contractual format for marketing information makes it
possible for the industry to write its own copyright law, in other words, to privately
legislate its own intellectual property rights.”7

(4) Summary

There is increasing needs to effectively protect valuable information against

6
See, generally, National Academy of Sciences, The Digital Dilemma: Intellectual Property in the Information
Age. Available at http://www.nap.edu/html/digital_dilemma/ (visited on May 15, 2003).
7
See Gail E. Evans, Opportunity Costs of Globalizing Information Licenses: Embedding Consumer Rights within
the Legislative Framework for Information Contracts, 10 Fordham Intell. Prop. Media & Ent. L.J. 267, 303-04
(Fall, 1999). See J.H. Reichman & Jonathan A. Franklin, Privately Legislated Intellectual Property Rights:
Reconciling Freedom of Contract with Public Good Uses of Information, 147 U. Pa. L. Rev. 875 (April,1999), Part
I.C.3 (describing non-negotiable licenses as equivalent to private legislation); see also Robert P. Merges,
Intellectual Property and the Costs of Commercial Exchange: A Review Essay, 93 Mich. L. Rev. 1570, 1611-13
(1995) (framing contracts of adhesion as "private legislation"); cf. Robert P. Merges, The End of Friction? Property
Rights and Contract in the "Newtonian" World of On-Line Commerce, 12 Berkeley Tech. L.J. 115 (1997)
[hereinafter Merges, The End of Friction?] (discussing the increasing importance of low transaction cost contracts
in the licensing of digitized intellectual property).

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unauthorized interference and use. We are encountering conflicts of different values
so that it is up to us to make decision. On one hand, we need to protect investment in
creation, distribution of valuable information through proprietary right. On the other
hand, free use and equal access to information, as a fundamental social value, must be
focused and maintained.

To sum up, with the application of ICT and the Internet for information
distribution, two legal problems are raised:

− Information in copyrightable work is being privatized, that balanced

arrangement has been and is being broken.

− Non-copyrightable information works are being privatized or propertized

and transacted over the Internet.8

“The balance must sustain the open discourse that defines a free culture and a
vibrant political system, but also sustain the investment and economic return that must
occur for the resources to be created, disseminated, and relied on for future
development.”9

We need to look for new balanced legal system to solve the confliction.

3. The Needs for Information Protection: Cases Studies

Information product-database is everywhere! Database exists in all industries and

entities. Therefore, the problems are: (a) Is it possible to adapt traditional doctrines to
regulate the changing forms of authorship; or should we create new forms of
intellectual property rights to protect valuable information products?

(1) Case Study 1: Protection of a List of Chinese

Publishers

Mr.Wang Vs. China Encyclopedia Publishing House

Defendant the Encyclopedia published a book “Video and Radio, Book,

Newspaper Publisher List China”, which used some parts of the book “10 Thousands
Publisher List of China” on which Mr.Wang has copyright.

In the case, the court held, Mr. Wang has no copyright on the list of publisher
(including name, address, contact information, etc.) for lack of originality, but Mr.
Wang has right to harvest his “seed” for his efforts and money investment. Based on
8
For example, some government-generated information is turned over to corporations that then sell it to whomever
can pay. Publicly funded information is "privatised" and thus not freely available.
9
see Raymond T. Nimmer, Information Law West Group (2001), at ¶1.02[2].

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the general principle of civil law “legal interest shall be protect by law”, the court
made judgment that Encyclopedia should be liable for infringing Mr. Wang’s
proprietary right in his book.10

This is a famous case that “sweat of the brow” was accepted in fact data
protection in China. It shows the ability of judges to make law in a civil law system.

(2) Case Study 2 Project Database Protection

HuaXinJie Investment Consulting Company(the Company) Vs. Mechanical

Industry Research Institute (the Institute) 11

The Company created a database that collect national construction project

including project are processing and will be launched. The items include such
information as the projects’ title, location, constructor, investment amount, etc.

In September of 1998, the Company started to sell the database. Defendant the
Institute purchased the database. The Institute published project information in
Business Opportunity Column of “Bidding and Market Monthly Magazine”, then
published monthly separate issue, named “Project Information of China”, which
include title, purchase lists, constructor, contact information, etc. of each project.
About 90 % of the information comes from the database.

The Company brought litigation against the Institute for copyright infringement
on the database.

The Institute claimed that the Company has no any copyright in its database for
lack of originality. Project Information of China is compiled by the Institute according
to its standard and items from the information collected from different sources
including the plaintiff.

Judgment: the database created by the Company is not a work covered by

copyright law and has no copyright. The reasons are: project information is
information belonging to public domain that approved and published by various
authorities, and item list is also the common lists describing a project, therefore the
content and compilation of the database is not original. The Company has no any
other right to the database although the Company has invested labor and money in it
according to current law in China.

Furthermore, there is no evidence that prove there is competition relationship

between the Company and the Institute, according to the judgment, therefore the court
refused the claim of the plaintiff that the Institute constitutes anti-competition.

10
参见北京市第一中级人民法院知识产权庭编：《知识产权名案评析》，人民法院出版社 1996 年版。
11
参见北京华信捷公司诉机械信息研究院侵犯著作权及不正当竞争纠纷案，(2001)高知终字第 33 号民事判决书。

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 The judgment is arguable. At least it shows that there is uncertainty concerning
whether and how to protect the fact database. The protection should be based on
copyright law, unfair competition law or civil law?

(3) Case Study 3: How to Protect Equity Data

Shanghai Stock Exchange (SSE) Vs. FTSE Xinhua Index Limited (FXI) 12

FXI specializes in creating innovative indices for the Chinese market. FXI has
signed the Equity Data Licensing Contract (the Contract) with the SSE, which allows
FXI to use the equity index to launch derivative products. Based on the security
trading data of Shanghai Stock Exchange and Shenzhen, FXI creates the FTSE
Xinhua China A50 index futures, which will be listed in Singapore Stock Exchange

SSE brings a lawsuit against FXI for infringing on intellectual property and
breaching contracts. Whether SEE has right to license FXI to use the data was debated
in whole procedure, which means what right SSE has? Whether SSE has IPR or some
similar property right?

The defendant claimed that the plaintiff has no any intellectual property right to
equity data because it is published to the public and such has no right to license the
defendant to use it. So defendant filed an anti-claim to require court repeal the clause
in the Contract because it is illegal or unequal.

Judgment: the Contract entered into between SSE and FXI is effective and both
parties should implement it loyally. In this sense, the FXI broke the clause in the
contract: without permit from the SSE in writing, the FXI has no right to allow the
other party to utilize the data that the FXI acquire according to the Contract. Based
mainly on this reason the Court made a judgment that the Contract should be
terminated for the breach of the FXI and the FXI should compensate the SSE USD
20,000.00 for its breach.

The FXI appealed to the First Middle People's Court of Shanghai and the claim of
the FXI was rejected by the Court. 13

The favorable judgment of the case is based on the contract. However, if there is
no contract, it is difficult to stop the FXI to use the published data. Due to this reason,
the Shenzhen Stock Exchange has not filed the litigation to the FXI.

12
上海市第一中级人民法院新华富时指数有限公司诉上证所信息网络有限公司其他证券合同纠纷案，
(2007)沪一中民五(商)终字第 2 号 。
13
新华富时指数有限公司诉上证所信息网络有限公司其他证券合同纠纷案，(2007)沪一中民五(商)终字第 2
号 。

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 4. Possible Solution

Therefore, concerning the non-copyrightable information product protection,

there are three possible solutions:

(1) copyright: expand the scope of copyright or lowering threshold of

originality to make any information work (or product) protect. Formerly,
in United Kingdom and Ireland, non-original databases was qualified for
copyright protection under the “sweat of the brow” regime; there was
catalogue rule in Scandinavia countries.

(2) Sui generis right or database right: sui generis right, invented by EU
Directive in 199614, grants a creator of a database a right against
unauthorized extraction of the contents of a database for a term of
fifteen years from the date of creation of the database. It is a separate
intellectual right in parallel with copyright.

(3) Anti-competition Protection or Business Torts: it is common practice

database protection in U.S. and has been proposed as a bill in House of
Representative (H.R. 3261)15; H.R. 3261 seek to prohibit the
misappropriation of certain databases (e.g. to take a "quantitatively
substantial" part of the information in a database) and make it
commercially available in the same market without the authorization of
the database owner if the database was created and maintained through
"substantial expenditure of financial resources". Having attributes
similar to the Database Directive, the bill grounded in unfair
competition principles as a complement to copyright, rather than a new
form of sui generis protection

The common foundation of the above solutions is the principle of “sweat of the
brow” or “protection of investment”.

Which one is better?

In December 1996, the World Intellectual Property Organization (WIPO), held a

diplomatic conference to discuss changes to the Berne Convention involving three

14
Directive 96/9/EC on the Legal Protection of Databases (the Directive) by the European Union (EU)
15
the Database and Collections of Information Misappropriation Act (H.R. 3261) in 2003; there also another
bill,Consumer Access to Information Act(H.R.3872), submitted and discussed.
Since 1996 (EU Directive issued), there were several bill following the EU Directive was proposed in 104th, 105th
, 106th, 108th Congress, but there no any bill has been passed. Former bill are:
104th Congress the Database Investment and Intellectual Property Antipiracy Act of 1996(H.R. 3531)
105th Congress Collections of Information Antipiracy Act(H.R.2652)
106th Congress: Collections of Information Antipiracy Act (H.R. 354) and Consumer and Investor Access to
Information Act, originally introduced (H.R. 1858)

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proposed treaties. One of them is Database Treaty16. The Treaty was in an attempt to
introduce the sui generis right in EU Directive to international IP system. Although
the agenda also included negotiations on a database treaty, the WIPO Draft Database
Treaty was not passed, even not discussed in-depth. Until today the Database Treaty is
still not put on the agenda of WIPO.

Frustration of the Draft Treaty shows that there is no common understanding on

the necessity of creating a sui generis system to protect databases outside of the
copyright framework.

Although developing countries had negative attitude on the Database Treaty, the
main opponent is USA. There is strong opposite voice against any database right in
national or international level. The reasons from opponents are: constitutional
limitation on Congress Legislation Power of IP protection. Moreover, it is believed
that the freedom of speech and flow of information is a foundation of modern
civilization society.

In 2005, COMMISSION OF THE EUROPEAN COMMUNITIES issued First

evaluation of Directive 96/9/EC on the legal protection of databases.17 According to
the Report, the economic impact of the “sui generis” right on database production is
unproven. The empirical evidence, at this stage, casts doubts on this necessity for
thriving database industry. On the other hand, there is no similar legislation. USA
continues to be the leading power for the future of database industry. This empirical
result, at least, cut down the favor of adhering step of EU and transplanting the
Directive.

With regard to harmonization effective, although all 25 Member States have

transposed the Directive into national law,18 national courts and authorities have had
difficulties in applying the Directive. There have been certain controversial judgments
throughout the Community in relation to the notion of “substantial investment” 19.
Other controversial judgments concern “spin-off” databases – that is databases which
are by-products of a main or principal activity - especially where the database is a

16
The other two are copyright treaty and a treaty on the production and performance of sound recordings.
17
See, COMMISSION OF THE EUROPEAN COMMUNITIES: DG INTERNAL MARKET AND SERVICES
WORKING PAPER：First evaluation of Directive 96/9/EC on the legal protection of databases （Brussels, 12
December 2005）
18
Germany, Sweden and United Kingdom met the deadline of implementation (1 January 1998); Austria and
France adopted in 1998 laws whose provisions apply retro-actively as of 1 January 1998. Belgium, Denmark,
Finland and Spain implemented in 1998; Italy and the Netherlands in 1999; Greece and Portugal in 2000; Ireland
and Luxembourg in 2001. Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia
and Slovenia implemented between 1999 and 2003. Also the EEA countries (Iceland, Lichtenstein and Norway)
have implemented the Directive. See COMMISSION OF THE EUROPEAN COMMUNITIES: EVALUATION
OF DIRECTIVE 96/9/EC ON THE LEGAL PROTECTION OF DATABASES (Brussels, 9.8.2005), footnotes 13
at 10.
19
See, for instance, District Court of The Hague, 12 September 2000, NVM v. De Telegraaf, where the court ruled
that the costs of collecting and maintaining up-to-date information concerning several thousands of real estate
properties amount to substantial investment; see, contra, Court of Appeal of Düsseldorf, 29 June 1999, where the
court held that there has been no demonstration of substantial investment in a database containing information
pertaining to the construction of buildings.

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single source database.20 Another area of controversial case-law concerns the
exploitation of on-line databases and Internet-related activities such as “hyper
linking” or “deep-linking” using search engines.21

On the 9 November 2004, the ECJ handed down its decisions in four cases
dealing with the database sui generis right.22 The ECJ in November 2004
significantly curtailed the scope of “sui generis” protection.23

The effect of the ECJ’s judgments is to narrow database rights, particularly in

relation to the subject matter of protection. No database right is available where
investment is solely directed at creating the contents of a database. Only where you
can demonstrate that you invested substantially in obtaining, verifying and presenting
contents independently from their creation, can you be qualified for protection.

In summary, there is no convictive reason to persuade people to accept the

directive as a model in database protection. Maybe, business torts or anti-competition
is more feasible and acceptable.

5. Conclusion

As neutral communication tool, ICT and the Internet, on the one hand, free
information and promote innovation and productivity. On the other hand, they create a
new industry (data industry) which is profiting from collecting, processing and
distributing information commercially. As commercial activities, investment and
effort in database creation look for return, and this then requires law protection
against misappropriation of the information. It is obviously necessary to grant some
proprietary right to database creator.

However, we must another thing in mind. The freedom of information flow and
the free access to information are also important to our culture, wealth-generating
activity, and the progress of society.
20
The “spin-off” theory has been developed by the doctrine and case law of certain Member States (in particular,
the Netherlands); under such theory, “spin-off” databases do not enjoy sui generis protection.
21
Linking occurs when a connection is made between pages within a single web site or another website by the use
of hypertext mark up language i.e. highlighted to identify the link. Clicking on a link transfers the user from the
website to that of the linked page and the Uniform Resource Locator (URL). A "deeplink" bypasses the homepage
of the URL to link directly with embedded web site pages. It is noteworthy that some national judges have recently
questioned (Algemeen Dagblad a.o. v. Eureka, President District Court of Rotterdam, 22 August 2000) or have
refused (“Paper Boy”, German Federal Court of Justice, 18 July 2003) the applicability of the sui generis
protection to newspapers.
22
Four cases are: Fixtures Marketing v Veikkaus, Fixtures Marketing v OPAP, Fixtures Marketing v Svenska Spel
and The British Horseracing Board v William Hill
23
The ECJ agrees and adopts a view that any investment in creating data is to be disregarded in determining
whether a database maker has made a substantial investment in obtaining, verifying or presenting the contents of
the database. Based on this judgment, the Court held that the substantial investment must be in the obtaining,
verification or presentation of the contents of a database and not in the creation of the data.
This is very key point in ECJ’ Judgment. The ECJ held that the investment in the obtaining, verification or
presentation of the contents of the database is distinguished from the investment in the data itself which cannot be
taken into account when considering whether the investment has been substantial.

12
 Many scholars, including me, agree that the development of the information
industry in the digital era is in demand of a new form of protection for database
producers. Whether or not information can or should be treated as property, we must
construct a basic legal order for database industry or content industry. The balance
between the freedom of information flow and the profits-chasing information
transaction in the current digital environment is an essential policy issue while making
intellectual property law and information law in this information century.

It is also obvious that the desired range and balance of protection depends on a
lot of social factors, such as industry situation in database services, the culture of the
country, legal systems, ideologies, political and societal systems, and others. I argue
that the balance should be defined and implemented by individual state, and if we
look for any international measure (such as database treaty), we must consider
differentia and diversity of each state.

In summary, if we are going to create a new intellectual property regime in

international level, there are two balances that must be stricken. Firstly, the balance
between what should be protected and what should not be; Secondly, the balance
between developing and developed countries. It is difficult to figure out an easy
solution; however we have no other choice.

That’s all what I want to talk today. Thank you very much. Please feel free to ask
questions.

13
 Material

EU Case

Fact: the British Horseracing Board (‘BHB’) organises horse races and maintains a database
which comprises a lot of information including the names of the horses, the date, place and time of
each race. William Hill (‘WH’), a UK bookmaker, took information from BHB’s database for use
on its betting web site. BHB brought an action in the English Courts for infringement of its sui
generis right in its database.

The expression-- a substantial investment in either the obtaining, verification or presentation

of the contents of a database in Article 7(1) of the Directive must be understood to refer to the
resources used, with a view to ensuring the reliability of the information contained in that
database, to monitor the accuracy of the materials collected when the database was created and
during its operation. The resources used for verification during the stage of creation of materials
which are subsequently collected in a database do not fall within that definition.

The resources used to draw up a list of horses in a race and to carry out checks in that
connection do not constitute investment in the obtaining and verification of the contents of the
database in which that list appears.

The ECJ agrees and adopts a view that any investment in creating data is to be disregarded
in determining whether a database maker has made a substantial investment in obtaining, verifying
or presenting the contents of the database. Based on this judgment, the Court held that the
substantial investment must be in the obtaining, verification or presentation of the contents of a
database and not in the creation of the data.

The consequence is that BHB’s databases are not protected by the sui generis right and
therefore the betting companies do not need to pay licences fee to extract or re-utilise the data.

By making a distinction between ‘created’ and ‘obtained’ data, the ECJ embraces one of the
main arguments underlying the so-called ‘spin-off doctrine’, which has been particularly popular
among Dutch courts and commentators.24 According to the spin-off doctrine, the database right
accrues only in investment that is directly attributable to the production of the database. There
would appear to be no reason to grant protection to data compilations that are generated
quasi‘automatically’ as by-products of other activities.25
24
P. Bernt Hugenholtz, ‘Program Schedules, Event Data and Telephone Subscriber Listings under the
Database Directive - The ‘Spin-Off’ Doctrine in the Netherlands and elsewhere in Europe’, paper presented
at Eleventh Annual Conference on International IP Law & Policy, Fordham University School of Law, New
York, 14-25 April 2003, available at http://www.ivir.nl/publications/hugenholtz/spinofffordham.html;
D.J.G. Visser, ‘The database right and the spin-off theory’, in: H. Snijders and S. Weatherill (eds.),
Ecommerce
Law. National and transnational topics and perspectives, Kluwer Law International, 2003; E. Derclaye,
‘Databases sui generis right: should we adopt the spin-off theory?’, EIPR 2004, 26(9).
25
Stephen M. Maurer, P. Bernt Hugenholtz and Harlan J. Onsrud, ‘Europe’s Database Experiment’, 2001 Science
789-790, see note 11 Mark J. Davison & P. Bernt Hugenholtz: Football fixtures, horse races and spin-offs: the ECJ

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 Some view intellectual property rights as the necessary appurtenants to products
of individual creativity; others consider that intellectual property rights have
developed into a tool to serve economic and monopolistic interests of corporations
and information-rich states; still others view them as an outmoded concept having no
relevance in a digital age.26

In the Future of Ideas (2001)27, Lessig argued that the expanding scope of
intellectual property protection threatens the Internet as an innovational playing field.

Professor Litman also argued that copyright law is too complicated and too restrictive
Litman (2001). 28 Both authors agree that the overprotecting intellectual rights
nowadays cause blocked creativity.

ICT created new opportunities to expend information and knowledge in our

society. However, this break through is hindered by legal and authoritarian protections
of intellectual property. Social and technological opportunities created by ICT are
threatened by far reaching IPR protections and may slow down the overall creation of
knowledge in society.

 General Meaning of Information

Information is a resource on its own, as well as an asset to others. It falls within

the resource hierarchy which starts with data, which leads to information, coming
together as knowledge, and resulting in wisdom.

Data can be defined as the undigested observations, or unvarnished facts.

Information follows as the organized form of data.

domesticates the database right. European Intellectual Property Review (EIPR) 2005, Issue no. 3.
26
Kim Nayyer: Globalization of Information: Intellectual Property Law Implications
http://www.firstmonday.org/ISSUES/issue7_1/nayyer/
27
Lessig, L (2001), The Future of Ideas, Random House, New York
28
Litman, J, (2001), Digital copyright, Prometheus Books, Amherst, New York

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 Knowledge is then the organized information which is internalized by its user
and integrated with other bits and fields resulting from experience, study, or intuition.

The final step is the integration of the knowledge into wisdom, which is
information which has been made useful by theory relating the bits of knowledge to
each other (chart).

Wisdom is a source of innovation or creation activities, from which IP comes

Data may be transformed into information, which, in turn, may be transformed

into knowledge and wisdom.

In this common sense, information is any information spread in the society as air
in the sky.

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