Hands off my database!

What is wrong with a content aggregator harvesting content from third parties’ database and using it to provide its own service? This is – in a nutshell – the question that, on 14 January 2021, Advocate General Szpunar tried to answer with his opinion on Case C-762/19 (full text available here).

The case brought to the attention of the CJEU concerns the scope of the sui generis right established by Article 7 of Directive 96/9/EC, following the request for a preliminary ruling issued by the Regional Court in Riga, Latvia. The dispute was established between two Latvian companies active in the internet job-advertising market: SIA CV-Online Latvia (hereinafter, “CV-Online”) and SIA Melons (hereinafter, “Melons”).

CV-Online is an internet job-advertising company that operates through a website where employers post job offers upon payment of a fee. Once submitted, the offers are collected and organized in a database, which uses microdata meta tags (a sort of key words for search engines) in order to simplify searches and indexation. Melons, on the other hand, is a specialized search engine that accesses existing job advertising websites and gathers all relevant job posts for specific users searches. In doing so, Melons includes hyperlinks to the original ads on the website of first publication and also integrates the same meta tags used, so as to be able to take advantage of better positioning results on generalist search engines.

A.G. Szpunar suggests that the violation of the sui generis rights pertaining CV-Online is apparent, as the copying and indexing of databases fall within the definition of extraction and reutilization under Article 7(1) of Directive 96/9/EC. However, the question underlined by the A.G. is: how far can the right-holder go in preventing such extraction and re-utilization?

In order for a right-holder to lawfully exercise such rights, two elements should be met: one deriving from the protection afforded by the sui generis right, the other stemming from certain specific aspects of competition.

The first condition is due to the economic connotation of the sui generis right accorded by Article 7(1) of Directive 96/9/EC. Indeed, the protection afforded by the sui generis right may be granted only to those databases which can be proved to have required a substantial investment and only if the extraction or reutilization activities negatively affect such investment.

The second condition stems from the rationale of the sui generis right, that is closer to unfair competition, rather than to intellectual property rights. Indeed, its scope is not only to ensure the recovery of the investments made by the database creators, but it is also to protect them from commercial parasitism.

That said, A.G. Szpunar stresses the importance to consider that both the conduct of third parties (like Melons) as well as the very exercise of the sui generis right could amount to an unfair competition practice. Indeed, there could be a risk that database makers, rather than intending to prevent the creation of parasitical third parties products, may aim at establishing a dominant position in a relevant market.

Consequently, A.G. Szpunar suggests that the referring court should verify whether (i) the extraction or reutilization of the database has indeed taken place; (ii) it is proved that the database required a substantial investment; and (iii) such extraction or reutilization integrates a threat to the possibilities of recovering such investment. Should all the above conditions be met, the national court should also verify whether the exercise of these rights could result in an abuse of a dominant position under EU or national laws.

Giovanni Rindi

Advocate General Szpunar, opinion of 14 January 2021, Case C-762/19, SIA ‘CV-Online Latvia’ v SIA ‘Melons’

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