U.K. betting firm William Hill has succeeded in getting its race database case against the British Horseracing Board (BHB) referred to the European Court of Justice.
This is only the latest twist in the long-running battle between the two. Legal proceedings in the case began in March 2000 when the BHB filed suit against William Hill for posting pre-race data from the group's database on its betting site.
 |
"Ultimately this is a test case for much more than just bookmakers versus racing. On it hinges Europe's ability to harmonize some very conflicting approaches to copyright and intellectual property across Europe."
- David Harding
William Hill
|
|
The case, according to notes British Betting Offices Association Chairman Warwick Bartlett, "is highly significant and has worldwide repercussions"
He added, "It is the first time someone has used the new database law to sell the contents of that database for commercial use. Lawyers in Europe have been inundated with work from database holders on how they can best exploit their property."
Or, as William Hill CEO David Harding says, "Ultimately this is a test case for much more than just bookmakers versus racing. On it hinges Europe's ability to harmonize some very conflicting approaches to copyright and intellectual property across Europe."
Who Should Pay?
To better understand this groundbreaking case, one needs to take a look at its more humble beginnings. It all began last year with the BHB asking Internet bookmakers to pay for posting the racing information, something that nearly all e-bookies refused to do, except for Victor Chandler and Sportingbet.com
"BHB spends over £4 million annually in compiling and maintaining the database which ensures that the information on race fixtures, race participants and races generally is accurate and reliable. Licenses for the use of this pre-race data (such as the name of the horse and its number running races) are granted as a way of recovering this cost for the benefit of racing," BHB CEO Tristram Ricketts explained.
The payment becomes especially important since the racing industry, which the BHB represents, will lose its levy payments, about £60 million annually. This money, which accounts for about 1.5 percent of horseracing turnover, is paid by British bookmakers' customers, along with a tax on turnover. The levy was instituted in 1963 upon the legalization of betting shops, to compensate the racing industry for the potential loss of course attendance.
A British High Court ruled against William Hill, the world's second largest bookmaker, in February 2001, saying that the use of the database information without payment is unlawful. The court ruled that loading the information onto William Hill computers for use on websites is an unlicensed act of extracting and re-utilizing a substantial part of the Board's database. William Hill was forced to sign a licensing agreement with the BHB to continue posting the racing data online.
In response, the betting firm began looking at its options. "The terms of the license were non-negotiable and we've complained to the Office of Fair Trading that they represent an anti-competitive abuse of monopoly on a number of accounts," Harding told IGN in February.
The bookmaker has appealed the court decision, citing that the tests for how a breach of database law were unclear. Harding explained that there are similar cases in Sweden and Holland where the judge had taken a different interpretation of the law and how it should be tested.
For legislation to be fairly applied across the board, how judgment should be applied must be perfectly clear, according to the "Act Clair" principle. When "Act Clair" isn't present, the case lands before European Court of Justice (ECJ), which then clarifies the matter and provides guidance on how the law should be interpreted. Once this occurs, the appeal court reconvenes for review of the judgment. In the William Hill case, the appeals court determined that the database law was not "Act Clair" and forwarded the case to the ECJ for its input, something that could take up to two years time.
The court cautioned, however, that "if the interpretation question to which this case gives rise had to be determined without the luxury of a reference, we think it likely what we would support the conclusions of the fudge for the reasons for which he explains."
Despite this caveat, Harding remains convinced that the case is far from over.
"If the ECJ follows the U.K. approach, it will convey very broad rights to database rights holders," Harding said. "For example, stock exchanges who have databases which compile indices (e.g., Nasdaq, S&P 500) could demand a license fee from mutual funds who base investment decisions on the indices."
"At it's most ridiculous extreme, if I had a database with all the months of the year and days of the week, I could charge a license fee to everyone who publishes a diary or calendar!" he added.
"BHB will continue to progress its levy replacement strategy in the wake of the government's decision to abolish the levy," Ricketts said, "and to pursue those bookmakers who make unlicensed use of its data.."
"While the continuing delay in settling the matter is much regretted, we concur with the Court of Appeal's view that, if a reference to the ECJ is to be made, it is quicker, and therefore preferable, for the matter to be referred now, rather than by the House of Lords," he added.
Refer to related stories for background on the William Hill/BHB case: