William Hill, the well-known British bookmaker, has gone to the European Court of Justice over its dispute With the British Horseracing Board.
Earlier this year, in the first decision of its kind in Britain, a court held that William Hill infringed the board's online database rights.
The board is the governing body for horse-racing in Britain and, as part of its operations, it maintains a database of runners; riders and other information on every race held in the country.
This is quite a task with about 1,200 race programmes being held annually, the information for which requires constant updating.
William Hill was supplied with the information from the board's database by one of the board's licensees, but without the board's permission. The information was then used on William Hill's online gaming Web site.
Although the concept of database rights was imported into Britain by a European directive in 1996, it remains alien to Hong Kong's legal system.
If similar circumstances applied in Hong Kong, the board would have to rely on copyright protection, which provides significantly narrower rights.
In Britain, it was sufficient for the board to demonstrate William Hill had used (or, to use legal database jargon, extracted or re-utilised) a "substantial part" of the database.
The judge interpreted this to mean that by repeatedly taking race data from the database, William Hill had used a sufficiently significant portion of the database to infringe the board's database rights.
From a legal and commercial perspective, it did not matter whether William Hill had copied the format of the database or if it had taken the information and then re-arranged it entirely.
By contrast, it would be possible to take action in Hong Kong only if the whole, or a substantial part, of the structure or layout of the database had been copied, as opposed to the individual items of data that form the database.
This puts Britain (and the rest of the European Union) more in line with the United States.
In a US case last year, a federal judge held that the extraction of data from auction site ebay.com for use in an auction aggregation site operated by Bidder's Edge was unlawful.
That case was decided on the basis that Bidder's Edge's action amounted to a trespass rather than an infringement of database rights.
However, the race is not yet fully run in Britain. William Hill's appeal to the European Court of Justice for consideration of the case means that it could be delayed by up to two years.
In the meantime, William Hill is paying a licence fee to the board for use of information contained in the database.
This fee is reported to be 1 per cent of William Hill's turnover on its Web site, which is a significant sum for a bookmaker which expects to repay most or its turnover to its customers as winnings.
As a result, William Hill has attacked the board on a separate front by lodging a complaint with the Office of Fair Trading.
It is making inquiries under the Competition Act to confirm whether the terms on which the board granted a licence were sufficiently excessive or discriminatory to amount to an abuse of a dominant position.
It may be some years before this dispute is resolved.
In the meantime, the moral of the story for users of databases, particularly operators of aggregation Web sites, is to consider whether a licence is required before proceeding.
Failure to do this could result in protracted and expensive litigation.
First published in South China Morning Post in August 2001.