Clifford Chance

According to Advocate General Szpunar's opinion in Case C-762/19 SIA CV-Online Latvia v SIA Melons earlier this month, quite possibly yes. There has been much criticism levied at the effectiveness of sui generis right since its creation, and the questions referred by the Latvian court in this case demonstrate, in part, some of the difficulties the sui generis right faces in the digital age.

The Case

The case concerned two Latvian companies operating in the recruitment market. CV-Online Latvia maintains a database of available jobs. The CV-Online website also uses meta tags to help job listing appear in general internet searches. Melons operates a search engine specialising in job advertisements. It allows a user to search multiple websites at the same time (including CV-Online's website). The results present hyperlinks to the websites searched. The results also display the meta tags in the search results.

The court of first instance in Latvia found that Melons' activities infringed CV-Online's sui generis database right on the basis that there was a reutilisation of CV-Online's database. Melons appealed and the Latvian court referred the following questions to the European courts:

"(1) Should the defendant’s activities, which consist in using a hyperlink to redirect end users to the applicant’s website, where they can consult a database of job ads, be interpreted as falling within the definition of “reutilisation” in Article 7(2)(b) of [Directive 96/9], more specifically, as the reutilisation of the database by another form of transmission?

(2) Should the information containing the meta tags that is shown in the defendant’s search engine be interpreted as falling within the definition of “extraction” in Article 7(2)(a) of [Directive 96/9], more specifically, as the permanent or temporary transfer of all or a substantial part of the contents of a database to another medium by any means or in any form?"

Advocate General Opinion

In the AG's opinion, however, the questions referred did not address the real issues with CV-Online's refusal to accept Melon's use of its database. In respect of the first question, he considered the real issue was not the hyperlinking but the way in which the advertisements were selected. This was done through Melon's search engine, which reproduces and indexes websites and then allows searches against those indexes; it is in effect a content aggregator. As for the second question, he considered that this should really focus instead on the broader question of the relationship between such search engines and the sui generis right.

Sui generis right and meta search

This reformulation of the questions, the AG noted, made the present case reminiscent of Innoweb (C‑202/12, EU:C:2013:85), in which the European court was asked to consider the relationship between the sui generis right and meta search engines. In that case the court found that meta search engines reutilised a whole or substantial part of the website searched. The key difference with the present case is that meta search engines translate the user's query so that it is understandable by the websites being searched. The meta search engine in effect uses the searched websites own search function. As such it gave users access to those databases through the meta search engine in a manner which was not intended by the makers of those databases. In the present case, the search engine did not "search" the CV-Online database, but the index made of CV-Online's website. This indexing is typical of how general search engines work. However, it still allowed for access to the contents of the CV-Online database, and the indexing process required a reutilisation of all or a substantial part of the CV-Online database.

The AG concluded, effectively, that if a search engine copies and indexes the whole or substantial part of a database, even a database freely available, this constitutes an extraction and reutilisation of that database. It follows that the maker of the database can prevent that extraction. It also follows that the activities of any search engine could be objected to by the maker of a database.

Adverse Effect

The AG, perhaps realising the potential ramifications of his opinion thus far, then proposed that the European courts should read into Article 7 a criterion that there must be an "adverse effect" on the database maker's investment as a condition of protection under the sui generis right. He reasoned that the sui generis right should not "have the effect of preventing the creation of innovative products which have added value". He considered it possible to apply such an approach based on the wording of Article 7(1) which provides for the right to prevent extraction or reutilisation of the whole or of a substantial part of the contents of that database "where the maker shows that there has been qualitatively or quantitatively a substantial investment in either the obtaining, verification or presentation of the contents". This, he considered, would balance protection of the investment of the database maker but also the positive economic benefits content aggregators can have. It would be for the national court to decide whether there was a risk to recouping the database maker's investment on the facts of any given case.

When intellectual property law and competition law collide

It will be interesting to see whether the Court decides to follow the approach of the AG. The AG's reasoning is based on the need for a "substantial investment" in the creation of the database, but it does not follow necessarily from that that only extractions or reutilisations which do not have a significant effect on that investment should be permitted. A maker must show a substantial investment as a condition for the sui generis right to subsist; the analysis then shifts to whether the alleged infringer has extracted or reutilised all or a substantial part of the database within the meaning of Directive 96/9/EC.

The AG has highlighted a significant issue with the sui generis right, in that it does not appear to be compatible with the (clearly beneficial) technological processes that search engines employ. The AG noted the economic benefit search engines, and more specialised content aggregators, bring and was clearly mindful of the potential anti-competitive effects a strict application of Article 7 might have in some case. The sui generis right was introduced in part to protect against parasitical competing products – but as the AG commented the perspective adopted when assessing if a competing product is parasitical can affect the conclusion significantly. This case is a perfect example of the difficulties when intellectual property law and competition law collide.

The Commission's "Big Data" initiative has as part of its remit to consider the ongoing suitability of the sui generis right, and it will be interesting to see whether specific steps are taken to address this issue. Equally, with the UK now able to determine its own approach to the protection of databases, it will also be interesting to see whether the EU and UK remain aligned on approach.