Auto-sync causes IP infringement


In the case of WEISS TECHNIK UK LTD v DAVIES [2022] EWHC 2773 (Ch), the Court held that four former employees and a company set up by one of them, had breached their contractual and equitable confidentiality obligations by using large amounts of the claimants’ confidential information to compete with their former employer. This included software, passwords, emails, technical documents and customer information. The claimants (former employer) also proved claims for copyright and database right infringement, as well as procuring or inducing breaches of contract.

The summary below only relates to the intellectual property aspects of the judgement and not the contractual or confidentiality breaches. The key legal principles used by the High Court to establish the legal rights of the claimant and to determine whether such rights were infringed by the defendants are as follows:

Breach of copyright: legal principles – The Copyright, Designs and Patents Act 1988 (CDPA) protects copyright in, amongst other things, original literary works, which are defined in s.3 to include computer programs.

Infringing acts could be:

  1.  copying the work by reproducing the work in any form, including storing the work in any medium by electronic means (s.17(2));
  2.  issuing copies to the public, putting into circulation copies not previously put into circulation by or with the consent of the copyright owner (s.18);
  3.  communicating the work to the public (s.20); or
  4.  possessing infringing copies in the course of business, knowing or believing the material to be an infringing copy of the work (s.23).

Breach of copyright: conclusion – D1 (Defendant one) had infringed copyright in two of the claimants’ software packages by downloading them. That was an infringement within the meaning of s. 17(2) CDPA and a primary infringement. D1 stated that the download happened automatically by virtue of the synchronisation function in Dropbox. The court however pointed out that a primary infringement of copyright is, however, a tort of strict liability, for which ignorance is not a defence.

D2 and D3 had infringed the claimants’ copyright in three software packages by storing the software in Dropbox (that was again an infringement under s. 17(2) CDPA, irrespective of the knowledge of how it got there).

D2 and D3 had further infringed the copyright in the software packages by copying it. The actions of the defendants providing the downloaded software to a software developer was considered by the court to be an act of copying within the meaning of s. 17 CDPA.

Breach of database rights: legal principles – Section s.3A of the 1988 Act defines a database as a collection of independent works, data or other materials, which are arranged in a systematic or methodical way, and are individually accessible by electronic or other means.

As per the Copyright and Rights in Databases Regulations 1997 Pt III reg.13(1), a database right exists if there had been a substantial investment in obtaining, verifying or presenting the contents of the database.

This database right therefore protects the collection and processing of data in a database, rather than the creation of the data in the first place. In Case C-203/2 British Horseracing Board v William Hill EU: C:2004:695 §31 the concept of “investment in obtaining the contents of a database” must be understood to refer to:

“… the resources used to seek out existing independent materials and collect them in the database, and not to the resources used for the creation as such of independent materials. The purpose of the protection by the sui generis right provided for by the directive is to promote the establishment of storage and processing systems for existing information and not the creation of materials capable of being collected subsequently in a database.”

Under reg.16, a person would infringe the database right in a database if, without the consent of the owner of the right, they extracted or reutilised all or a substantial part of the contents of the database. “Extraction” is defined in reg.12(1) as the permanent or temporary transfer of any of the contents of the database to another medium by any means or in any form.

The concept of extraction from a database was considered by the CJEU in Case C-304/07 Directmedia Publishing v Albert-Ludwigs-Universität Freiburg EU:C:2008:552 , from which the following principles in particular can be derived:

  1. The decisive criterion is the existence of an act of “transfer” of all or part of the contents of the database to another medium, whether of the same nature as the medium of the database or a different nature (§36).
  2. It is immaterial whether the transfer is effected through a technical process (e.g. electronic means) or by manual means (§37).
  3. It is also immaterial that the contents of the database are rearranged or adapted during the process of transfer (§§39—40).

An extraction of data could arise from data being uploaded onto and stored on a computer, even if the user of the computer had not read or accessed the relevant data, Football Dataco Ltd v Sportradar GmbH [2013] EWCA Civ 27, [2013] Bus. L.R. 837, [2013] 2 WLUK 158 followed (paras 221-226).

Breach of database rights: conclusion – D2, D3 and D4 had infringed the claimants’ database right by the taking and storing of extracts of the claimants’ database on D2’s systems (paras 234-237) as the taking of such extracts and/or storage of those documents unquestionably amounted to “extraction” within the meaning of Regulation 16.

The list had been compiled at least in substantial part by using the previous employer’s database to contact customers, whose details were then put into the defendants’ own database if they became their customers. This was similarly an act of extraction of a substantial part of the database, amounting to an infringement under Regulation 16 even if the resulting customer list rearranged or adapted the information obtained from the previous employer’s database.

One of the defendants also admitted in cross-examination that the company had used the previous employer’s database of customers to compile and send five direct marketing emails in 2017 and 2018. The extraction of substantial customer details for the purposes of those marketing emails therefore amounted to a further infringement of the claimants’ database rights.

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This reflects the law and market position at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought in relation to a specific matter.

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