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Court of Appeal refers questions to the CJEU on jurisdictional issues in on-line IPR infringement case

29/03/2011

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United Kingdom

Court of Appeal refers questions to the CJEU on jurisdictional issues in on-line IPR infringement case

This article was included in the spring 2011 issue of snIPpets - the intellectual property newsletter.

A recent case before the Court of Appeal highlights the jurisdictional issues that must be considered when alleging on-line copyright and database right infringement, and which has resulted in a reference to the Court of Justice of the EU seeking guidance on where the infringing act occurs in relation to the sui generis database right where there has been on-line use of data which has been uploaded and held on servers operated outside the UK (Football Dataco Limited & Others v Sportradar GmbH & another [2011] EWCA Civ 330).

The case involves allegations that the defendants had copied data from the claimants' Football Live database which contains statistics from UK football matches including goals scored, penalties, yellow and red cards and substitutions. The defendants, Sportradar GmbH and Sportradar AG, were German and Swiss companies who provided a competing service called Sport Live Data. The defendants’ data is stored in webservers in Germany and Austria and can be accessed via links from elsewhere, including the UK. The defendants have customers based in the UK which use Sport Live Data, including Bet 365, a UK company which provides online betting services to customers located in the UK. 

The claimants alleged that, in assembling the data for Sport Live Data, the defendants copied data from Football Live and were, therefore, liable for infringement of UK copyright and database right. An infringement claim was issued in the courts of England & Wales (the "E&W action") on 23 April 2010. Less than three months later, the defendants in the E&W action commenced proceedings in a German court seeking declarations that the activities of Sportradar GmbH do not infringe the English claimants' intellectual property rights. 

In the E&W action, the defendants denied copying data from Football Live. They also submitted that they had not performed any infringing acts in the UK and applied for an order that the courts of England and Wales no jurisdiction to entertain the claims of copyright and database right infringement brought against them and setting aside service of the claim form.

This application was considered by Floyd J in the High Court in London who held that the claimants had adequately pleaded allegations of joint copyright infringement between the defendants with the customers and that the particulars of claim alleged sufficient facts to make out a case of re-utilisation by the defendants' UK customers. Floyd J concluded that the claimants had not made out a good arguable case of primary infringement of sui generis database rights, but they had made out a good arguable case of joint liability with customers.

Both sides appealed this decision, with the defendants arguing that the proceedings issued in the E&W courts did not disclose a good arguable case against them so that the German court was the first seized with the dispute and should go on to decide the issues in Germany.

The Court of Appeal has handed down its judgment on the appeal less than four months after Floyd J's judgment, and has overturned part of the judgment.

In relation to the copyright infringement claim, the Court of Appeal ruled that what is alleged to have been copied is "mere data", whose recording may involve some skill, but not creative skill. Therefore the Court of Appeal held that, when proceedings were commenced, the E&W courts were not seized of a claim in copyright to the necessary standard. 

As for the allegations relating to sui generis database right infringement, the defendants argued that the claim as formulated when proceedings in the E&W courts were issued did not properly identify any cause of action which is justiciable in the E&W courts. They contended that their activities are carried out abroad outside the jurisdiction of the E&W courts: in Germany, Austria (where the server is located) and Holland (the location of the back-up server). The Court of Appeal dismissed this argument, ruling that the particulars of claim alleged sufficient facts to make out a case of joint tortfeasorship of the defendants through re-utilisation of the data by the defendants' customers who were based in the UK, including Bet 365 and Stan James (which operates their server within the jurisdiction, i.e. Gibraltar). 

The claimants also appealed the issue of whether the defendants have themselves committed an act of direct infringement of database right in the UK. They argued that the "transmission theory" should apply, whereby the defendants' act of making the data available to the UK public, including the act of the user in accessing it in the UK, is sufficient to give rise to infringement in the UK. In contrast the defendants relied on the "emission theory", submitting that the acts of transmission occur only in the place from which the data emanates. The Court of Appeal decided that the position is not "acte clair", remarking that it was not appropriate for them to form their own view about this "very important and difficult question". Therefore the Court of Appeal has referred a question to the Court of Justice of the EU seeking guidance on whether the transmission or emission theory should apply.

Pending a ruling by the Court of Justice on this reference, which is likely to take at least a year, the Court of Appeal has noted that the claims alleging that the defendants are directly liable for breach of database right should be stayed, whilst the claim of joint tortfeasorship can proceed.

In practice: This case demonstrates the territorial nature of the sui generis database right and copyright created by the implementation of the Database Directive 96/9 EC; both are national rights even though each right has the same scope in each case. This means that care must be taken when drafting a claim to ensure that infringing acts within the jurisdiction are alleged. Pending the outcome of the referral to the Court of Justice of the EU, it is unclear whether direct infringement of sui generis database rights by a defendant based in another EU member state will occur where there has been on-line use of data which has been uploaded and held on servers operated outside the UK. 

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