Database Right - 77m Ltd. v Ordnance Survey Ltd.
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| Author Ordnance SurveyLicence OS OpernDaya Source Wikipedia Ordnance Surb=vet |
Jane Lambert
Chancery Division (Mr Justice Birss) 77m Ltd v Ordnance Survey Ltd [2019] EWHC 3007 (Ch) (8 Nov 2019)
Ordnance Survey Ltd. ("OS") is the national mapping service for the United Kingdom. Since the 18th century, it has published very accurate and detailed maps of the topography of the nation that are useful for all kinds of business as well as hikers, cyclists and other leisure users. More recently, OS has developed a product called AddressBase which matches 28 million Royal Mail postal address to unique property reference numbers. A startup company called 77m Ltd ("77") developed a similar product named Matrix using a variety of licensed or publicly available materials including some that OS had created. 77 contended that it had created Matrix without infringing any of OS's intellectual property rights ("IPR") but OS disagreed.
77 issued [roceedings out of the Intellectual Property Enterprise Court ("IPEC") for a declaration that it had acted lawfully and did not infringe any of OS's IPR on 13 Sept 2016. OS counterclaimed alleging infringement of copyright and database rights. OS applied unsuccessfully to Judge Hacon to transfer the action and counterclaim to the Chancery Division's Intellectual Property list in 77m Ltd v Ordnance Survey Ltd and others [2017] EWHC 1501 (IPEC) (15 June 2017). One of the sources that 77 used to create Matrix was data from Her Majesty's Land Registry (HMLR). 77 entered various contracts with HMLR to receive data from, or have access to, HMLR databases. HMLR stopped supplying data to 77 whereupon 77 sued OS in the Chancery Division for inducing a breach of contract. OS applied for summary judgment on the claim in 77m Ltd v Ordnance Survey Ltd [2018] EWHC 3524 (Pat) (14 Dec 2018). Mr Justice Arnold dismissed the application but limited any claim for inducing breach of conduct to acts after 12 Sept 2016.
The claim for a declaration of non-infringement and OS's counterclaim seems to have been consolidated with the action for inducing a breach of contract because those issues came on for trial before Mr Justice Birss in 77m Ltd v Ordnance Survey Ltd [2019] EWHC 3007 (Ch) (8 Nov 2019). By the time of the trial, OS had dropped its counterclaim for copyright infringement but maintained its claim for infringement of database rights (see paragraph [130] of the judgment). The judge also had to consider the procuring breach of contract issue (see paragraph [137]). The trial took place between the 17 and 26 July 2019 and judgment was delivered on 8 Nov 2019.
OS's counterclaim for database right infringement depended on whether 77 had exceeded the terms of various licences. The learned judge set out the steps by which he proposed to resolve that matter in the following paragraphs:
"[132] The first set of issues to deal with relates to the meaning and scope of various contractual licences entered into between 77m and HMLR (the INSPIRE Download Terms, the A1 Match Licence and the FAP terms) or RoS (the RoS Land Values Licence). The argument about the meaning of the INSPIRE Download Terms is important because those terms represent the licence given to 77m relating to the INSPIRE polygons, which are at the heart of what 77m did. The argument about the terms of the A1 Match Licence is important because those terms represent the licence given to 77m relating to most (but not all) of the A1 property descriptions held by 77m. The argument about the FAP terms relates to the issue of scraping and the outcome determines the relevant licence terms (if any) governing several million further A1 property descriptions. The argument about the RoS Land Values licence also involves looking a bit more closely at what 77m actually did with the relevant data.
[133] Once the scope of the licences is determined one can see whether 77m's actions fell within their terms or not. Even if the actions are within the licences there are also issues about alleged limits on the power of the bodies granting these licences (HMLR, Lichfield DC and RoS). OS contended that if the licences were so broad as to render lawful what 77m did then HMLR and RoS had no power to grant them and therefore they were not effective in law to grant such a licence.
[134] Once all that has been decided one can address whether 77m has infringed OS's database rights. At trial 77m took a further point, asking whether the acts which were carried out needed a licence at all. To deal with that one needs to identify exactly what rights OS has and then examine the scope of the definition of infringement in database rights law and the scope of various defences. OS did not accept that these points (or some of them) were open to 77m and I need to consider that."
Referring to the Supreme Court's judgments in Rainy Sky SA and others v Kookmin Bank [2011] CILL 3105, [2012] 1 All ER (Comm) 1, [2012] Bus LR 313, 138 Con LR 1, [2012] BLR 132, [2011] 1 WLR 2900, [2011] 2 CLC 923, [2011] UKSC 50, [2012] ICR 1, [2011] WLR 2900, [2012] 1 All ER 1137[2012] 1 Lloyd's Rep 34, Arnold v Britton and others [2015] 2 WLR 1593, [2015] UKSC 36, [2015] WLR(D) 247, [2016] 1 All ER 1, [2015] HLR 31, [2015] AC 1619 and Wood v Capita Insurance Services Ltd. 171 Con LR 1, [2017] 4 All ER 615, [2017] 2 WLR 1095, [2017] AC 1173, [2017] UKSC 24, [2017] CILL 3971, [2017] WLR(D) 220, his lordship noted that the relevant principles of contractual interpretation were well established and there was no need to restate them. Citing Lewison 5th Ed at [3.18] and Chitty 33rd Ed. at [13-051]. he added that where an agreement reflects a public standard form contract, factual evidence regarding the circumstances surrounding an individual instance of that contract will be of limited, if any, importance.
One of the databases that 77 used was the OS Topo database which Mr Justice Birss described at paragraph [27] of his judgment:
"A major OS database product is called Topo. Topo's full name is the OS MasterMap Topography Layer. Topo is a detailed vector spatial dataset of the whole land area of Great Britain and includes geometric representations of every feature and physical boundary. It contains over 117 million polygons, over 325 million line geometries showing boundaries of the polygons and other geographical features, and over 21.6 million cartographic text labels. Each of the geometries has been captured at some point in the history of OS from either ground or aerial survey. In other words Topo is a map of Great Britain. It is the most accurate, detailed and up to date map of Great Britain available. OS makes Topo available to the private sector on commercial terms. It is not available outside the public sector for free."
"A major OS database product is called Topo. Topo's full name is the OS MasterMap Topography Layer. Topo is a detailed vector spatial dataset of the whole land area of Great Britain and includes geometric representations of every feature and physical boundary. It contains over 117 million polygons, over 325 million line geometries showing boundaries of the polygons and other geographical features, and over 21.6 million cartographic text labels. Each of the geometries has been captured at some point in the history of OS from either ground or aerial survey. In other words Topo is a map of Great Britain. It is the most accurate, detailed and up to date map of Great Britain available. OS makes Topo available to the private sector on commercial terms. It is not available outside the public sector for free."
OS complained that 77 had infringed its database rights in the Topo database by the use of Inspire polygons. At paragraph [14] the judge defined a polygon and explained its importance:
"In electronic mapping, parcels of land are defined by polygons. An individual polygon is defined by the set of coordinates of its vertices. So a square parcel of land (or building) would have four vertices and the polygon would be defined by four pairs of X-Y coordinates. In order to give a place a single geospatial coordinate a common technique is to use the centroid of the relevant polygon."
"In electronic mapping, parcels of land are defined by polygons. An individual polygon is defined by the set of coordinates of its vertices. So a square parcel of land (or building) would have four vertices and the polygon would be defined by four pairs of X-Y coordinates. In order to give a place a single geospatial coordinate a common technique is to use the centroid of the relevant polygon."
In order to comply with regulations that transposed Directive 2007/2/EC of the European Parliament and of the Council of 14 March 2007 establishing an Infrastructure for Spatial Information in the European Community (INSPIRE) OJ L 108, 25.4.2007, p. 1–14 into English law known as "the INSPIRE Regulations", HMLR created and made available a set of polygons known as the "INSPIRE polygons." At [79] the judge stated that following discussions between OS and HMLR, HMLR promulgated a set of licence terms know as the "INSPIRE Download Terms" under which the INSPIRE polygons would be made available to the public for downloading for free. In order to decide whether 77 had infringed OS's database rights in the Topo database, Mr Justice Birss had to consider whether 77 had complied with those terms. Between paragraphs [139] and [175] he construed those terms taking into account the factual matrix and considered the parties' contentions. At [171] his lordship said that 77 had used the INSPIRE polygons internally to create Matrix but in doing so 77 was operating within the INSPIRE Download Terms. He rejected OS's case in favour of 77 at [175].
OS also complained that 77 had infringed its database rights in AddressBase by using centroids from the Registers of Scotland ("RoS") land values dataset and addresses from HMLR and Lichfield District Council. In order to determine that issue, the judge had to construe an agreement between 77 and HMLR known as the "A1 Match Licence", the terms of HMLR's "Find a Property" service and RoS Land Values Licence as well as those under which Lichfield District Council and RoS were allowed to use AddressBase. He construed the A1 Match Licence between paragraphs [176] and [207], the "Find a Property" terms between paragraphs [208] and [230] and RoS Land Values Licence between paragraphs [231] and [250]. His lordship found at [250] that 77's use of RoS Land Values data had not been licensed by RoS. At [258]. however, he found that 77 had been licensed to use the Linchfield data.
Following his findings at paragraph [250] and paragraph [258], the judge noted at [259] that the only allegations of the counterclaim that survived were infringement of database right in the Topo database or in AddressBase or its predecessors by the use of centroids from the RoS Land Values dataset; and the use of addresses from HMLR. He reviewed The Copyright and Rights in Databases Regulations 1997, Directive 96/9/EC of the European Parliament and of the Council of 11 March 1996 on the legal protection of databases OJ L 77, 27.3.1996, p. 20–28 and the relevant case law. He noted that the Court of Justice of the European Union had drawn a distinction between consulting a database which is permitted and extracting and reutilizing matter which is not.
In respect of the use of centroids, Mr Justice Birss concluded at [276]:
"In the end I have decided that what 77m have done is not consultation. The reasons are these. What is apt to confuse the issue is that in economic terms what OS is trying to stop is Matrix, but Matrix does not contain the relevant contents (the centroids). Matrix is not the "other medium". The fact that the process which involved the putative act of extraction by 77m of the centroids was ultimately something which led to another database being produced, is irrelevant to the analysis. If what 77m did is an act of extraction that must be true whatever it is 77m went on to do having used the centroids for its purposes and discarded them. This is I think what the court is referring to at [47] of BHB v William Hill. That case also used the term appropriation to refer to extraction, which has been picked up later (see [51]). Moreover while re-utilisation involves making available to the public, extraction does not have to."
He added at [278]:
"77m is using the centroids from the original database for information purposes in a sense (to draw an inference) and that chimes with the references to consultation in DirectMedia and Innoweb. Moreover 77m was given access to the database albeit what 77m then did was not licensed. However what I think deprives 77m's activity of the character of mere consultation is its scale. When a member of the public, or a commercial user, wishes to consult the database to learn something about a particular entry or to learn something about particular entries, they consult the database. By contrast someone who takes all or a substantial part of all the contents, and transfers them into another medium so that they can use them, is appropriating to themselves a substantial part of the investment which went into creating the database. Protecting that investment is what database right is for. That is what 77m did and that is why it is extraction not consultation. There may be a grey area between the sort of commercial consultation I refer to and wholesale activity of the kind carried out by 77m but the scale of 77m's actions puts them firmly on the extraction side of the line."
The judge then considered whether 77 had committed an act restricted by database right in using the addresses provided via A1 Match and Fina a Property function in order to match them with an existing address 77m already had in its Master Address List. To do that, the A1 Match or "Find a Property" address had to be copied into temporary computer memory. His lordship found that the matching activity amounted to extraction and not mere consultation. Although the data that 77 used had come from intermediaries, it derived ultimately from an OS database which OS continued to update. Database right is intended to protect investment in verification of the contents of a database. 77's activity amounted to an infringement of database right in such database.
Paragraph 3 of the Schedule to The Copyright and Rights in Databases Regulations 1997 provides a number of defences where a database is open to public inspection upon which 77 relied. This was the first case in which that paragraph had been considered. The judge considered each of those provisions and found that none of them applied. He also dismissed a defence of estoppel.
As to whether OS had induced a breach of contract, the judge accepted that HMLR had ceased to supply date to 77 in 2015 which amounted to a breach of contract but 77 was precluded from relying on that breach by the terms of Mr Justice Arnold's order in the summary judgment application. Referring to the House of Lords' decision in OBG Ltd and another v Allan and others [2007] 2 WLR 920, [2007] Bus LR 1600, [2007] 4 All ER 545, [2008] 1 All ER (Comm) 1, [2007] 2 WLR 0920, [2007] UKHL 21, [2007] EMLR 325, [2007] IRLR 608, [2008] 1 AC 1, [2007] EMLR 12, [2007] 19 EG 165, [2008] AC 1, [2007] BPIR 746, his lordship noted that a breach of contract must have been induced by the defendant. The judge could find no evidence that OS had induced a breach after 12 Sept 2016.
Mr Justice Birss set out his conclusions at paragraph [342] of his judgment:
"i) 77m has not breached the INSPIRE Download Terms. Therefore the claim for infringement of OS database right relating to 77m's use of INSPIRE polygons or data derived from INSPIRE polygons fails.
ii) 77m has breached the A1 Match licence.
iii) 77m scraped 3.5 million addresses from HMLR's Find a Property Service and breached the applicable terms.
iv) 77m's use of the centroids breached the RoS Land Values licence.
v) 77m's use of the centroids from the RoS Land Values dataset and the addresses acquired from HMLR via the A1 Match licence and scraping the FAP service amounted to acts of infringement of database right held by Ordnance Survey or GeoPlace in the Topo database and the NAG/AddressBase database respectively.
vi) 77m's use of the addresses manually downloaded from FAP, which were about 480,000 in number, was within paragraph 3(1) of Schedule 1 of the Database Regulations (the authorised extraction defence) and therefore did not infringe any OS database rights. 77m's other activity did not fall within any of the defences in paragraph 3 of Schedule 1 of the Database Regulations.
vii) No estoppel by representation relating to 77m's actions arises.
viii) No issue about authority to grant licences arises.
ix) The claim for procuring breach of contract fails."
In view of his lordship's conclusions, 77's claims for a declaration of non-infringement of OS's IPRs and inducing a breach of contract have failed and OS's counterclaim for infringement of database right has succeeded in part. For that reason, the judge declared at [343] that the real winners of the litigation were the claimants in the counterclaim even though 77 had achieved some success.
Anyone wishing to discuss this case note or database right and the other issues in this case generally may call me on 020 7404 5252 during normal office hours or send me a message through my contact form.
Following his findings at paragraph [250] and paragraph [258], the judge noted at [259] that the only allegations of the counterclaim that survived were infringement of database right in the Topo database or in AddressBase or its predecessors by the use of centroids from the RoS Land Values dataset; and the use of addresses from HMLR. He reviewed The Copyright and Rights in Databases Regulations 1997, Directive 96/9/EC of the European Parliament and of the Council of 11 March 1996 on the legal protection of databases OJ L 77, 27.3.1996, p. 20–28 and the relevant case law. He noted that the Court of Justice of the European Union had drawn a distinction between consulting a database which is permitted and extracting and reutilizing matter which is not.
In respect of the use of centroids, Mr Justice Birss concluded at [276]:
"In the end I have decided that what 77m have done is not consultation. The reasons are these. What is apt to confuse the issue is that in economic terms what OS is trying to stop is Matrix, but Matrix does not contain the relevant contents (the centroids). Matrix is not the "other medium". The fact that the process which involved the putative act of extraction by 77m of the centroids was ultimately something which led to another database being produced, is irrelevant to the analysis. If what 77m did is an act of extraction that must be true whatever it is 77m went on to do having used the centroids for its purposes and discarded them. This is I think what the court is referring to at [47] of BHB v William Hill. That case also used the term appropriation to refer to extraction, which has been picked up later (see [51]). Moreover while re-utilisation involves making available to the public, extraction does not have to."
He added at [278]:
"77m is using the centroids from the original database for information purposes in a sense (to draw an inference) and that chimes with the references to consultation in DirectMedia and Innoweb. Moreover 77m was given access to the database albeit what 77m then did was not licensed. However what I think deprives 77m's activity of the character of mere consultation is its scale. When a member of the public, or a commercial user, wishes to consult the database to learn something about a particular entry or to learn something about particular entries, they consult the database. By contrast someone who takes all or a substantial part of all the contents, and transfers them into another medium so that they can use them, is appropriating to themselves a substantial part of the investment which went into creating the database. Protecting that investment is what database right is for. That is what 77m did and that is why it is extraction not consultation. There may be a grey area between the sort of commercial consultation I refer to and wholesale activity of the kind carried out by 77m but the scale of 77m's actions puts them firmly on the extraction side of the line."
The judge then considered whether 77 had committed an act restricted by database right in using the addresses provided via A1 Match and Fina a Property function in order to match them with an existing address 77m already had in its Master Address List. To do that, the A1 Match or "Find a Property" address had to be copied into temporary computer memory. His lordship found that the matching activity amounted to extraction and not mere consultation. Although the data that 77 used had come from intermediaries, it derived ultimately from an OS database which OS continued to update. Database right is intended to protect investment in verification of the contents of a database. 77's activity amounted to an infringement of database right in such database.
Paragraph 3 of the Schedule to The Copyright and Rights in Databases Regulations 1997 provides a number of defences where a database is open to public inspection upon which 77 relied. This was the first case in which that paragraph had been considered. The judge considered each of those provisions and found that none of them applied. He also dismissed a defence of estoppel.
As to whether OS had induced a breach of contract, the judge accepted that HMLR had ceased to supply date to 77 in 2015 which amounted to a breach of contract but 77 was precluded from relying on that breach by the terms of Mr Justice Arnold's order in the summary judgment application. Referring to the House of Lords' decision in OBG Ltd and another v Allan and others [2007] 2 WLR 920, [2007] Bus LR 1600, [2007] 4 All ER 545, [2008] 1 All ER (Comm) 1, [2007] 2 WLR 0920, [2007] UKHL 21, [2007] EMLR 325, [2007] IRLR 608, [2008] 1 AC 1, [2007] EMLR 12, [2007] 19 EG 165, [2008] AC 1, [2007] BPIR 746, his lordship noted that a breach of contract must have been induced by the defendant. The judge could find no evidence that OS had induced a breach after 12 Sept 2016.
Mr Justice Birss set out his conclusions at paragraph [342] of his judgment:
"i) 77m has not breached the INSPIRE Download Terms. Therefore the claim for infringement of OS database right relating to 77m's use of INSPIRE polygons or data derived from INSPIRE polygons fails.
ii) 77m has breached the A1 Match licence.
iii) 77m scraped 3.5 million addresses from HMLR's Find a Property Service and breached the applicable terms.
iv) 77m's use of the centroids breached the RoS Land Values licence.
v) 77m's use of the centroids from the RoS Land Values dataset and the addresses acquired from HMLR via the A1 Match licence and scraping the FAP service amounted to acts of infringement of database right held by Ordnance Survey or GeoPlace in the Topo database and the NAG/AddressBase database respectively.
vi) 77m's use of the addresses manually downloaded from FAP, which were about 480,000 in number, was within paragraph 3(1) of Schedule 1 of the Database Regulations (the authorised extraction defence) and therefore did not infringe any OS database rights. 77m's other activity did not fall within any of the defences in paragraph 3 of Schedule 1 of the Database Regulations.
vii) No estoppel by representation relating to 77m's actions arises.
viii) No issue about authority to grant licences arises.
ix) The claim for procuring breach of contract fails."
In view of his lordship's conclusions, 77's claims for a declaration of non-infringement of OS's IPRs and inducing a breach of contract have failed and OS's counterclaim for infringement of database right has succeeded in part. For that reason, the judge declared at [343] that the real winners of the litigation were the claimants in the counterclaim even though 77 had achieved some success.
Anyone wishing to discuss this case note or database right and the other issues in this case generally may call me on 020 7404 5252 during normal office hours or send me a message through my contact form.
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