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The rapidly expanding role of digital data throughout society has brought the intellectual property law governing databases to a critical crossroads. Lawmakers face the problem of how to assure the availability of low-cost information and preserve incentives for database creation. These needs, along with the call for international regulatory harmonization, have set the stage for sweeping changes in U.S. database protection. But agreement on the exact parameters of change is proving elusive. Today, the United States extends copyright protection to compilations of pre-existing materials or data that are “selected, coordinated, or arranged in such a way that the resulting work as a whole constitutes an original work of authorship.” One of the key decisions framing that protection, Feist Publications Inc. v. Rural Telephone Service Co. (1991), tested a “sweat of the brow” argument that sought to extend copyright to compilations that were put together with great effort or investment. But the Supreme Court rejected the sweat-of-the-brow notion and affirmed that protection is available only to compilations that require an author’s creativity. The bottom line then is that copyright does not extend to many databases, which lack the indicia of creativity. As a result, information may be extracted from them without violating anyone’s copyright. But 2004 is a far different world from 1991. Huge digital databases sit at the heart of nearly every commercial and academic activity — from pharmaceutical research to computer programming to marketing management. And transferring and accessing the data stored in them has become much easier. Feist is looking a bit anemic. Meanwhile, in the European Union, much broader sui generis protection prohibits the extraction of a substantial portion of the data from any database. It may be the shape of things to come in the United States. PROPOSALS TO FIX Two bills introduced in the House of the Representatives this session have attempted to extend new copyright protections to databases. Under H.R. 3261 (reported to the House Commerce Committee in February 2004), “the unauthorized making available in commerce” of a “quantitatively substantial part of the information in a database” in a “time sensitive manner” would be prohibited where it “inflicts injury on the database or a product or service offering access to multiple databases” and where it “would so reduce the incentive to produce or make available the database or the product or service that its existence or quality would be substantially threatened.” Databases that are the product of a “substantial expenditure of financial resources or time” would be covered. In effect, the legislation would provide sui generis protection on a sweat-of-the-brow basis. H.R. 3872 (reported out of the House Commerce Committee in March 2004) takes a different tack by labeling “the misappropriation of a database” as an “unfair method of competition and an unfair or deceptive act or practice in commerce” under the Federal Trade Commission Act. The database in question must have been generated or collected at some cost; the information must be time-sensitive; and another person’s use of it must constitute “free-riding” on the first person’s efforts. Also, the second person’s use of the data must be in direct competition with a product offered by the first person; and the second person’s ability to free-ride on the efforts of the first must so reduce the incentive to produce the product that its existence or quality would be substantially threatened. Proponents of database protection will wait for the next Congress, however, because neither bill has gotten much traction. CONFLICTING INTERESTS This legislative inaction can be traced to the complexity of the problem. Stakeholders in IP laws governing databases are many. In fact, more and more entities are so deeply involved that they may harbor conflicting interests as both users and producers. Information producers argue that the existing patchwork of IP laws provides an insufficient safeguard in a digital world. Sui generis proponents include Westlaw, Lexis-Nexis, eBay, and other companies whose business relies on the gathering of large amounts of data in organized form. Without sui generis protection, their financial incentive to compile information is limited by the threat of free riders. Sui generis protection in the EU compounds their concerns, igniting fear that European data plunderers — limited in the information they can extract at home — will turn their eyes on U.S. targets. Information consumers, on the other hand, are resisting a sui generis law, contending that current statutes provide sufficient protection and that the threat of data extraction is not a strong disincentive to database creation because producers can technologically restrict access. The academic community and the American Library Association oppose sui generis protection and instead push for “fair use” provisions that allow some data extraction. Businesses that consume large amounts of data oppose a sui generis law for the most basic reason — that it would increase costs. And research-and-development entities worry that the expense of purchasing rights to access data would hinder their work. But what of the companies that need someone else’s data to conduct their experiments, but later want to shield databases relating to their discoveries? For this growing class of entities that are both information consumers and producers, sui generis protection would be a double-edged sword. While this legal puzzle has yet to be resolved, technology may ultimately step in. As databases grow ever larger and more complicated, IP-protected search engines and research tools may provide the true keys to preserving databases’ value: The information will be free, but the means to get at it will cost you. Thus, a problem created by technology may be solved by it. Gianna J. Arnold ([email protected]) is senior counsel in the D.C. office of Epstein Becker & Green, where she practices IP and unfair competition law, with a focus on life science industries. Uri Bilek was a summer associate at the firm.

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