French Court rules to protect horse-racing database and prevent unlawful extraction

23 October 2007

Sandrine Rambaud

On 20 June 2007, the First Instance Court of Paris (Tribunal de grande instance) issued an important and interesting ruling in a case involving database rights – offering protection by way of sui generis database rights and preventing unlawful extraction of information by third parties. This was the first major French court decision regarding a database similar to those examined by the European Court of Justice in its decisions dated 9 November 2004 (in particular British Horseracing Board.v. William Hill, Case C-203/02).

In France, the “Paris Mutuel Urbain” (PMU) is an economic interest group which coordinates French companies which are authorized to operate horse races and to gather bets at their racecourses. The PMU has a monopoly over betting on horse races and has created a database containing a large amount of information regarding the name, place and date of the races, as well as the names of horses and their owners, race results and betting odds.

Over the course of several years, Eturf extracted information (information transmitted to in particular the website Zeturf.com) from the PMU database, in particular information relating to race results and odds, this information being available exclusively from the PMU database. Eturf also passed this information on, including transmitting it to the website Zeturf.com.

1. Protection of the PMU database

In the earlier ECJ cases, the court had rejected the application of the “spin off theory” pursuant to which a database which is created ancilliary to a principal activity should not be protected. The ECJ underlined that a database could qualify for protection but that in order to do so, the database owner must prove that it made substantial investment in the database itself and that resources spent in creating the data in the database could not be taken into account in assessing the investment made. The ECJ concluded that “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 Paris court also rejected the “spin off theory” but concluded that, in practice, such a distinction between the purpose of investment would be difficult to make. Instead, it referred only to the existence of substantial investment in the constitution and presentation of the database, without providing more details on the type of investments taken into account.

The Paris court added that the proof of substantial investments is sufficient to demonstrate that the database owner has taken a risk in the constitution of the database. This criterion of “risk” is included only in the recitals of the Directive 96/9/EC dated 11 March 1996, but is nevertheless also found in the French Intellectual Property Code, as a criterion for eligibility for protection.

2. Unlawful extractions by the Defendants

Regarding Eturf’s use of information from the database, the Paris court considered that the extraction of data by Eturf was “qualitatively substantial” and therefore unlawful. In arriving at this conclusion, the Paris court analysed the intrinsic value of extracted data. The Paris court held that as the information, such as the odds and the results of horseracing, was only available in the PMU database and was necessary for the carrying on of Eturf’s activities, the information was necessarily accorded a significant value.

On this question (as with the first question), the French court did not follow the ECJ line of argument, by which extracted information is “qualitatively substantial”, if the investments spent to collect, verify and present such data are substantial.

This is an important victory for PMU because it is involved in separate litigation with Eturf and Zeturf over its monopoly over betting on horseracing. On 10 July 2007, the French Supreme Court annulled part of an earlier decision of the Court of Appeal preventing Zeturf from gathering horseracing bets, but is still to rule on whether this French monopoly over betting on horseracing is compliant with European regulation.