Order Code RS21662
Updated January 29, 2004
CRS Report for Congress
Received through the CRS Web
Protecting Noncreative Databases: H.R. 3261,
108th Congress, First Session (2003)
Robin Jeweler
Legislative Attorney
American Law Division
Summary
Copyright law protects works of authorship that exhibit original, creative
expression, including creativity in the selection, arrangement, or coordination of both
traditional and automated databases. Noncreative databases are not subject to protection
against copying under existing copyright law. Database producers seek new legal
protection against piracy of collections of information that result from the investment
of substantial amounts of money, time, or other resources. The protection they seek
would be based on industrious effort rather than on creativity. This report examines the
pending legislative proposal, H.R. 3261, which, if enacted, would create a
misappropriation-style of protection against the copying of all or a substantial part of
such collections of information.
Background. The U.S. Copyright Act protects “compilations†which include
qualifying databases. A compilation is defined as “a work formed by the collection and
assembling of preexisting materials or of data that are selected, coordinated, or arranged
in such a way that the resulting work as a whole constitutes an original work of
authorship.â€1 To be a “work of authorship,†the database must exhibit at least a modest
amount of original, creative expression on the basis of the selection, organization, or the
overall coordination of the data elements. The data elements may themselves be original
works of authorship or may be uncopyrightable facts or similar items.
As a consequence of the U.S. Supreme Court decision in Feist Publications v. Rural
Telephone Service Co.,2 databases that lack at least a modest amount of original, creative
expression are not constitutionally eligible for copyright protection. In Feist, the Supreme
Court held that “white pages†of standard telephone directories lack the modest degree
of creative expression required by the Constitution to sustain a copyright. Prior to Feist,
many appellate courts had applied a “sweat of the brow†or industrious effort standard to
1 17 U.S.C. § 101.
2 499 U.S. 340 (1991).
Congressional Research Service ˜ The Library of Congress
CRS-2
justify copyright protection for fact-based compilations. A related concept, that of unfair
competition and misappropriation, was also applied.3
In the aftermath of Feist, database producers became concerned about the lack of
protection for databases that are the result of industrious but noncreative effort. That
concern has been exacerbated by post-Feist court decisions.4
International developments added to the concerns of database producers. The
European Union issued a directive mandating a new form of protection for noncreative
databases by its member States. Effective January 1, 1998, EU members must protect
noncreative collections of information through an “extraction†right. This sui generis
form of protection is available to non-EU nationals only on the basis of reciprocity (unless
the database producer essentially maintains a subsidiary within an EU member State).
That is, American database producers will be able to enjoy this new form of protection
in Europe only if they establish European subsidiaries, or if the United States reciprocates
by providing essentially the same protection for European-origin databases in the United
States as the EU States provide in their countries under the new sui generis protection for
noncreative databases.
Legislative Background. In response to the concerns of the database producers,
legislation was introduced in the 105th Congress which would have created a
misappropriation-based protection for noncreative databases under the authority of the
Commerce Power. The House passed a bill twice. It passed H.R. 2652 as a free-standing
bill, and later incorporated closely similar provisions as Title V of H.R. 2281. Although
H.R. 2281 was enacted, the proposal concerning noncreative databases was dropped from
the bill before final passage.
A similar database proposal was reintroduced in the 106th Congress as H.R. 354, the
“Collections of Information Antipiracy Act,†but with significant modifications. The
three major changes in H.R. 354 in comparison with the database bills of the 105th
Congress were: 1) a new exception from protection for “individual use†of the database
for teaching, research, or explanation, under a reasonableness standard; 2) a specific
exclusion from subject matter coverage in the case of products or services that include
collections of information used to transmit or store, or provide access to, digital online
3 International News Service v. Associated Press, 248 U.S. 215 (1918)(Where one news service,
INS, took stories published by the AP and wired them to INS subscribers, the practice constituted
a common-law misappropriation of the latter’s property, notwithstanding the general rule that no
one owns “the news.â€)
4 See e.g., National Basketball Assoc. v. Motorola, Inc., 105 F.3d 841 (2d Cir.
1997)(Misappropriation claim under state law brought by the NBA against Motorola for hand
held pagers that provided real-time information about NBA games was preempted by copyright
law ); Warren Publishing v. Microdos Data Inc. 115 F.3d 1509 (11th Cir)(en banc), cert. denied,
522 U.S. 963 (1997)( Warren Publishing’s Directory of Cable Systems, the standard reference
work in classifying cable systems by the communities served, was not infringed by reproduction
of the data in a new format by a competitor); and, Bellsouth Advertising and Publishing Corp.
v. Donnelley Information Publishing, 999 F.2d 1436 (11th Cir. 1993)(en banc), cert. denied, 510
U.S. 1101(1994)(No copyright infringement where advertising directory was copied to create a
database to solicit advertising for a competing directory).
CRS-3
communications; and 3) new language to clarify further that protection for revised
databases was limited to a 15-year period.
A related bill, H.R. 1858, the “Consumer and Investor Access to Information Act of
1999,†was introduced on May 19, 1999 and referred to the House Commerce Committee.
It was similar to H.R. 354 in that it created a Commerce Clause-based right against
prohibited duplication and commercial distribution of a noncreative database. It was
unlike H.R. 354 in several respects, for example: 1) the bill provided only civil, not
criminal penalties against violation; 2) enforcement was vested solely in the Federal Trade
Commission; no private right of action was created; 3) it did not have a fixed 15-year
term of protection; and, 4) it applied only to databases created after enactment.
In the 105th and 106th Congresses, arguments in favor of new legal protection against
copying noncreative databases were based on three main points: 1) databases have
enormous economic importance; appropriate laws are needed to encourage the creation
and dissemination of new and updated databases by protecting the investment in their
development against unfair, predatory conduct; 2) there is a “gap†in appropriate forms
of legal protection in the aftermath of the Supreme Court decision in Feist Publications
v. Rural Telephone Service Company; and 3) the creation of a new database extraction
right within the European Union means that the United States must reciprocate by creating
an equivalent form of protection for databases within the United States, in order for
United States database producers to compete effectively in the lucrative European market.
Opponents of bills asserted: 1) the new protection would have a negative impact on
science and basic research; 2) it would contribute to the spiraling costs of access to online
databases; and 3) the proposals were anti-competitive and overbroad.5
No legislation was introduced in the 107th Congress.
H.R. 3261, 108th Cong., 1st Sess. (2003), the “Database and Collections
of Information Misappropriation Actâ€. On September 23, 2003, prior to the bill’s
introduction, a joint hearing was held before the House Judiciary Subcommittee on
Courts, the Internet, and Intellectual Property and the House Energy and Commerce
Subcommittee on Commerce, Trade, and Consumer Protection to discuss a draft version
of the bill. H.R. 3261 was introduced on October 8 and reported favorably with an
amendment in the nature of a substitute by the House Subcommittee on Courts, the
Internet, and Intellectual Property on Oct. 16, 2003. The full Judiciary Committee
approved the bill on January 21, 2004.
Like its predecessors, the bill is premised on the Congress’ power to regulate
interstate commerce under the Commerce Clause rather than asserting authority under the
Copyright Clause of the Constitution. It creates a new federal right of private action
against misappropriation of databases, enforceable through a civil suit by a database
owner against an infringer. Many of the factors which constitute misappropriation under
5 For more background on legislative proposals from the 105th and 106th Congresses, see CRS
Rep. 98-902A, Intellectual Property Protection for Noncreative Databases by Dorothy Schrader
and Robin Jeweler (Updated Sept. 15, 1999). See also U.S. Copyright Office Report on Legal
Protection for Databases (August 1997) at [http://www.copyright.gov/reports/dbase.html].
CRS-4
the bill are those identified by the U.S. Court of Appeals for the Second Circuit in
National Basketball Assoc. v. Motorola, Inc.6 In that case, the basketball league sued the
manufacturer of hand-held pagers that provided real-time information about professional
basketball games alleging, among other things, copyright infringement and commercial
misappropriation under New York law. The Court of Appeals ruled against the NBA.
In doing so, it examined the relationship between copyright law and state-law
misappropriation actions that could survive preemption by the Copyright Act. Citing the
Supreme Court’s decision in International News Service v. Associated Press,7 the court
identified five factors supporting a “hot news†misappropriation claim:
We hold that the surviving “hot-news†[International News Service]-like claim is
limited to cases where: (i) a plaintiff generates or gathers information at a cost; (ii) the
information is time-sensitive; (iii) a defendant’s use of the information constitutes free
riding on the plaintiff’s efforts; (iv) the defendant is in direct competition with a
product or service offered by the plaintiffs; and (v) the ability of other parties to free-
ride on the efforts of the plaintiff or others would so reduce the incentive to produce
the product or service that its existence or quality would be substantially threatened.8
These criteria, with the exception of (iv) above, are the basis for those set forth in H.R.
3261.
Prohibited Acts. Specifically, the bill prohibits making available to others,
without authorization, a substantial part of information in a database maintained by
another person, if
! the database was generated through a substantial expenditure of financial
resources or time;
! the unauthorized appropriation of the database and its dissemination in
commerce occurs in a time-sensitive manner and inflicts injury; and
! the ability of other parties to “free ride on the efforts of the plaintiffâ€
would reduce the owner’s incentive to produce the database and
substantially threaten its quality or existence.9
Permitted Acts. Among the activities expressly permitted by the bill are:
! independent gathering of information obtained by means other than
extraction from a protected database and making the information
available in commerce;
! making available in commerce a substantial part of a database by a
nonprofit scientific or research institution for scientific or research
purposes, if a court determines that making the information available is
“reasonable under the circumstancesâ€;
! hyperlinking to a database; and
6 105 F.3d 841 (2d Cir. 1997).
7 248 U.S. 215 (1918)
8 105 F.3d at 845.
9 H.R. 3261, § 3.
CRS-5
! making the information available for news reporting, including news and
sports gathering, dissemination and comment, unless the information is
time sensitive and has been gathered and made available by the news
reporting entity as part of a consistent pattern for the purpose of direct
competition.10
Exclusions from Coverage. The newly created protection against
misappropriation would not extend to databases gathered and maintained by a federal,
state, or local employees pursuant to their jobs, or to those required to be maintained
pursuant to federal law or regulation. Also excluded from protection are computer
programs used in the manufacture, production, operation or maintenance of a database.11
Remedies. The bill creates a civil right of action for persons injured by
misappropriations in a U.S. district court. Among the remedies available are temporary
and/or permanent injunctions; actual and punitive damages; impoundment and/or
destruction of all copies of a database found to be in violation of the law; and costs and
attorneys fees.12
Accredited nonprofit post-secondary educational institutions and nonprofit research
laboratories have qualified immunity from liability. They are excluded from liability
unless they make available “substantially all of a database in direct commercial
competition†with a protected database.13 And Internet service providers are not liable
for making available information that is provided by another content provider.14
Injunctions and impoundment are not available remedies in suits against the U.S.
Government. Relief is available against state governmental entities only to the extent
permitted by applicable law governing sovereign immunity.
The Federal Trade Commission, the U.S. Patent and Trademark Office, and the U.S.
Copyright Office have oversight responsibilities to monitor implementation of the law and
to identify instances in which judicial interpretation materially or adversely impacts the
laws and policies within their purview. They will report their findings to Congress.
Effective Date. The Act would apply prospectively to existing databases. Acts
extracting a quantitatively substantial part of the information in a database that were legal
and occurred prior to the effective date are exempt from liability.
10 Id. § 4.
11 Protection under the act may adhere to a database of a federal, state, or local educational
institution maintained in the course of engaging in education, research or scholarship or by a
federal employee acting outside the scope of employment. Id. § 5(a),
12 Id. § 7.
13 Id. § 9.
14 Id. § 7(h).