Dutch court rejects claims for sui generis database protection of national company register

In the era of fake news, reliable sources of information are more valuable than ever. When it comes to official registers held on a governmental level, administrative bodies are often tasked to ensure such registers are accurate and complete. Accessing those registers usually comes at a cost, prompting some commercial parties to offer the same information at a lower price.

In a recent case before the Dutch (district) court of Midden-Nederland, the question arose whether database rights can be invoked to prevent third parties reusing and offering data retrieved from the national company register. For those Kats accessing a company register frequently, the decision is certainly worth the read.

A cat studying a shadow register with interest

Background of the case

The official Dutch company register is operated by the Chamber of Commerce (Kamer van Koophandel, ‘KvK’), an administrative body tasked by the Dutch government. The KvK is funded by the Dutch Ministry of Economical Affairs. All Dutch companies are by law required to register with the KvK.

Although generic information (e.g. the company name and address) is free to access within the register, the more detailed extracts and records are only accessible after payment. This has triggered the existence of so-called ‘shadow registers’, which offer the same information for reduced prices. In 2020, the KvK updated its user terms and stated that the company register qualifies as a sui generis database (in the sense of article 7(1) of the Database Directive 96/9/EC) whereby the KvK’s prior consent would be required for reusing and commercially offering information from the register. 

The claimant ‘Vereniging voor zakelijke b2b informatie’ (‘VVZBI’, a representative of parties offering commercial information) had a different view. It did not dispute that the company register qualified as a sui generis database, but challenged that the KvK could exercise any rights over it. 

According to VVZBI, database right protection is based on the ‘economical incentive theory’, entailing that database protection should only be granted to risk bearing investments in a database. Without database protection, so the theory assumes, the database would not have been created in the first place, as an economical incentive to do so would be missing.

Given that the KvK is statutorily tasked with creating and maintaining the company register, VVZBI argued that the investments could never qualify as risk-bearing economical investments. Consequently, the KvK had not substantially invested in the database in the sense of article 7(1) Database Directive, which is a prerequisite to exercise any rights over it.

The decision by the court

The court firstly considered what is to be understood as a ‘substantial investment’. Referring to the recently rendered CJEU case CV-Online Latvia, the court concluded that the investment should be qualitative and quantitative substantial, whereby non-financial investments should also be considered.

Given the KvK annually invests over €100 million in inserting data in the register, processing changes and keeping the register up to date, the court was satisfied that sufficient qualitative and quantitative investments had been made. The fact that these investments were made for the purpose of performing the KvK’s statutory tasks did not preclude them from being considered in the assessment of article 7(1) of Directive 96/9/EC, so the court remarked.

However, the court found that the latter circumstance could be of importance in identifying whether the KvK would also be entitled to actually exercise database rights over the company register. In accordance with article 5 and 7 of Database Directive, only the ‘maker’ of a database could invoke database rights. In assessment hereof, the court once more referred to the CV-Online Latvia case, where the CJEU had held that:

“ the purpose of the right provided for in Article 7 of Directive 96/9 is to ensure that the person who has taken the initiative and assumed the risk of making a substantial investment in terms of human, technical and/or financial resources in the setting up and operation of a database receives a return on his or her investment by protecting him or her against the unauthorised appropriation of the results of that investment “ (point 22)

The court proceeded, in line with the economical incentive theory brought forward by VVZBI, to consider that:

“It follows from the recitals of Directive 96/9/EC and the case-law of the CJEU that database rights seek to protect the substantial investments in setting up and operating a database, by means of providing the [legal] certainty to the person who has made such investments and who bears the risk thereof that he will be compensated for his investments, which in turn stimulates investments in modern data storage and processing systems which contribute to the development of the information society in the Member States. Database law is therefore based on the grounds of economic justification” (consideration 3.23, unofficial English translation)

Applied to the KvK, the court firstly considered that the setting up and operating of the company register is not done out of any economical motive, but to fulfill the statutory tasks assigned to the KvK. As such, even if the KvK would not be able to recoup any of its costs, it will still be statutorily required to maintain the register and invest therein.

Secondly, the court found that the KvK does not bear any risk to its investments. Due to the government funding the activities of the KvK, any potential loss would be fully covered by the government budget.

The court therefore concluded that the KvK cannot be the subject of database right protection: the maker of the database who makes risk-bearing investments based on an economical incentive. Subsequently, the KvK cannot exercise the database rights of article 5 of Directive 96/9/EC, since these rights are only conferred to the maker of the database. As the losing party, the KvK is ordered to pay €67.000 in costs.

Comment

Relying on the rationale of database right protection, the Dutch court strikes a blow for public sector bodies wishing to protect their registers.

The decision will not only be well received by those offering and using shadow registers, but also by the EU legislator. The new Open data and Public Sector Information Directive (2019/1024) specifically aims to overcome barriers that prevent full re-use of public sector information. The upcoming Data Governance Act also encourages commercial reuse of public sector data against no or limited costs.

For those Kats who pay in excess of €10 for a single record of a public register, this decision will surely be welcomed. 

Top picture is by Freddy2001 made available under a Creative Commons Attribution-Share Alike 4.0 International