Why does a shift away from IPR matter?

Hans Graux

This is the fourth article in the series of opinion pieces that dive into data sharing as a service. Will data services remove intellectual property rights from the picture, and at what cost?

In the previous article of this series, we zoomed in on data sharing as a service and found that the shift to services is clearly happening for data as well. The emphasis in new legal and policy initiatives is universally on dynamic access to data as a service, which opens the floor for greater flexibility in defining user rights. Why does a shift away from IPR matter?

The role of intellectual property rights in organising and communicating the rights and obligations in relation to data is well documented, and more importantly, it is well regulated. The legislation mentioned above (such as the InfoSoc Directive, the Software Directive, the DSM Directive, and the Database Directive) in each case clarifies what the intellectual property rights entail, how they apply to specific types of data, and perhaps most importantly: what rights lawful users or the general public have. This can include important protections, such as the right to use (extracts of) the data for the purpose of illustration for teaching or scientific research, for public security, for private non-commercial purposes, for reporting and journalism, criticism and review, and so forth. When intellectual property rights do not apply, the relevant exceptions also do not apply.

This is the main reason why a move away from intellectual property rights is significant. When data is not protected by intellectual property rights, or more generally when it is offered as a service on the basis of a subscription agreement, then there is full contractual freedom, and the data provider is able to set the terms of use at their own discretion, without any mandatory consideration for the public interests, including any exceptions granted by copyright or database rights. In more explicit terms, a move towards data as a service allows data holders to erode the careful balance struck by existing intellectual property rights legislation.

This issue has been examined by the European Court of Justice, specifically in the 2015 case of Ryanair v PR Aviation (Case C 30/14). Simplifying the matter significantly, the case fundamentally revolved around a company’s access to Ryanair flight data, which it then used to create a website that allowed consumers to search for flights. Ryanair shared the data based on its own bespoke terms and conditions, which prohibited the use of automated systems or software to extract data from the site for commercial purposes (‘screen scraping’).

Ryanair’s claims that the use of its data infringed copyright law and the database right were quickly dismissed by the Court of Justice. As might have been expected, this data qualified neither for copyright protection (not being in any way original) nor for database rights (since it was a by-product of Ryanair’s principal activities). However, the Court also affirmed that Ryanair was, therefore, free to lay down contractual limitations on its database’s use by third parties. Contractual freedom prevailed, and there was no need to consider the exceptions created by the Database Directive, as the database in question simply was not eligible for copyrights or database rights. In basic terms, in such cases, the data sharing party to a large extent writes its own laws contractually.

This ruling is not the only example of the importance of intellectual property rights as a safeguard of the public interest. In a well-documented case, the 2012 UsedSoft GmbH v Oracle International Corp. ruling (Case C-128/11), the Court of Justice ruled that owners of software licences had the right to resell these licences to third parties, regardless of whether they were purchased in a physical form or downloaded from the Internet. While the ruling related specifically to software, the logic reasonably should apply to any copyright licence, including for e.g. digital data: once lawfully bought, the owner of the licence may resell their licence, thus increasing the economic value of the data. Conditions apply, of course, including notably the requirement that the buyer of the ‘second-hand’ licence must meet the requirements imposed by the licence (e.g. a company cannot buy a licence that allows private use by individual citizens only). Nonetheless, flexibility exists when copyright licences are used.

Inversely, when digital data is made available purely on the basis of a subscription agreement, the data holder is again free to impose any constraints, including the non-transferability of the data itself, based on the general principle of contractual freedom. In these cases, a shift to data-as-a-service removes a protection that existed on the basis of intellectual property rights. This is the main reason why a shift away from an intellectual property rights-based approach matters.

Stay tuned for the next article in the series: Will data services remove intellectual property rights from the picture, and at what cost?

Why does a shift away from IPR matter?
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2017, Giammarco Boscaro via Unsplash

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