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EC Prepares Database Protection Rules

July 1992

One of the ways that the EC pursues its goal of a single market for Europe is by getting all its member countries to adopt the same laws in key areas of commerce. The EC does this by issuing “directives” which establish legal principles. Each country is then required to amend its laws to follow those principles.

In our January 1991 issue, we reported on the EC’s directive on legal protection for software. The EC has now turned its attention more specifically to the protection of databases, and has issued a draft directive on the subject. While not the final word, the draft gives a good indication of the direction in which the EC is moving.

The draft directive first requires that member states extend copyright protection to electronic databases, if they have not already done so. More interesting, however, is the way the directive deals with the question of the “extraction” of data from a database, as opposed to wholesale copying: here, the directive creates a new legal concept of “unfair extraction”. The owner of a database is protected against extraction of its data (without its permission) done for commercial purposes.

However, when the contents of the database cannot be independently created or obtained from any other source, the right to extract and re-utilize the data must be licensed by the owner on “fair and nondiscriminatory terms.” In this, the treatment of databases is somewhat akin to the treatment of musical works under U.S. copyright law, which are subject to mandatory licensing.

We expect developments with profound implications for U.S. companies doing business in Europe will continue to occur as the unified European marketplace evolves. We will follow these developments closely and report to our readers in future issues.