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Beyond Copyright: Protecting Databases

October 2002

Database owners beware: you can and should take special steps to protect your work in light of limits of copyright protection.

United States copyright law does not protect the raw facts contained in databases. Only the selection and arrangement of facts is protected by copyright. This means that it is usually copyright infringement to copy a database as a whole. But copyright law would not prevent extracting, copying and making further use of the data itself, all without the permission of the database owner.

In a 1991 decision interpreting the Copyright Act, Feist Publications, Inc. v. Rural Tel. Serv. Co., Inc., 499 U.S. 340, the United States Supreme Court made it clear that because facts are not protected by the Copyright Act, a compilation of facts can be protected only if their selection and arrangement involved at least a minimal amount of creativity. The Court held that a purely alphabetical arrangement of names with phone numbers did not have the minimum creativity required and that the white pages of a phone book are not protected by copyright. The Feist case rejected what was known as the "sweat of the brow" doctrine, under which some courts had held that data collections were protected by copyright because they required substantial effort to create, and because without copyright protection there would be less incentive to produce useful databases.

Cases since Feist have made it clear that only a very small amount of creativity is required to protect the selection and arrangement of facts. If, in creating a database, some professional judgment went into choosing what facts to include or how to present them, the database as a whole is probably protected by copyright. The raw facts contained in a database are not protected, however. If users can gain access to the database, they may be able to extract raw data from the database, and then reuse, repackage or resell that data.

Congress has considered legislation that would protect data, similar to the Database Directive adopted by the European Union. Several pieces of database protection

legislation have been introduced in Congress, but such legislation would be a major shift in U.S. intellectual property law, and no database protection bill has reached the floor of either house.

Even without specific database protection legislation, database owners have ways to supplement traditional copyright law to preserve their ownership of their data.

Keep it a secret. Databases that are made available to a limited number of users may be protected as a trade secret if the owner takes appropriate steps to limit access and prevent unauthorized disclosure. Under Wisconsin law, and that of most states, a trade secret is information that derives economic value from not being generally known, cannot be readily ascertained through proper means and is the subject of reasonable efforts to preserve its secrecy. If a database owner provides access to data to a limited number of users who sign a confidentiality agreement, the data may constitute a trade secret. The database owner can seek an injunction and damages against anyone who improperly acquires or discloses the protected information. Of course, trade secret law will not protect data that is provided to the general public.

Technological protection. Database owners should consider using technological means to prevent unauthorized access and copying of data, such as encryption and password protection. Under the Digital Millennium Copyright Act (DMCA), database owners may recover additional damages if these technological means are circumvented (see Sidebar at right). Technological means may also provide a reasonable means of preserving secrecy, a component of securing trade secret protection.

License, do not sell. Database owners should generally license, rather than sell, their databases. If the owner of a database or other copyrighted work sells a copy of his or her work, the owner gives up almost all control over that particular copy. The buyer can lend, resell, or, in the case of a database, extract and reuse the underlying data. With a license agreement, however, the owner of a database can specify how the licensee will use the database. The license can prohibit extracting and reselling the underlying data.

The license agreement can be in the form of a "shrinkwrap" agreement, which provides notice that the work is offered under a license on the outside of the package. The user agrees to the terms by opening the package and using the work after having an opportunity to review the terms of the license. Courts have enforced such shrinkwrap licenses so long as notice of the license is on the outside of the package, and the prospective licensee has the opportunity to return the work for a refund if he or she rejects the terms of the license.

The license agreement can also be in the form of a "clickwrap" agreement, in which the user gains online access to the work only after agreeing to the terms of the license by clicking on a box of a web site.

Although a license is a powerful tool to preserve control over databases, database owners should consult an attorney to ensure that the terms of any proposed license will be fully enforceable.

New Causes of Action Protect Copyright Owners
The Digital Millenium Copyright Act (DMCA), which amends U.S. copyright law, provides two new causes of action that may benefit the owners of copyrighted works.

Section 1201 of the Copyright Act now prohibits the circumvention of technological copy protection systems, subject to some limited exceptions. It also generally prohibits the manufacture, importation and sale of devices designed to circumvent copy protection systems.

Section 1202 of the Copyright Act now prohibits removing, altering, or providing false copyright management information, which is information included on a copy of a work about the owner of the work, the terms and conditions under which the work may be used, and other information about the work and its copyright. Copyright owners should ensure that all copies of their works include appropriate copyright management information, such as copyright notice or a Terms of Use statement.

Should a copyright owner discover an infringement of his or her work, the owner can recover for any violation of the DMCA as well as for the infringement. Infringers may defeat copyright protection systems in committing the infringement, and they often remove copyright management information to conceal it.

The DMCA provides statutory damages of $200 to $2,500 per violation of Section 1201, and $2,500 to $25,000 per violation of Section 1202.

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