Bingo for Binley's as fictional seeds bear fruit

This blog is delighted to host the following guest case note from Chris Sleep (Birketts LLP, which acted for the victorious claimants) on a point that will be really useful for prudent parties who seed their databases in order to identify their use in the hands of third parties.  Chris writes:

"Leading British healthcare information provider Binley's--part of the Wilmington Group Plc [owners of CLT, who run conferences on copyright and other IP rights, among other things] -- recently won an important decision in the Patents County Court, England and Wales, against a competitor which infringed its database rights. This ruling, Beechwood House Publishing Limited (t/a Binleys) v Guardian Products Ltd and another [2011] EWPCC 22, has important implications for the protection and enforcement of sui generis database right, particularly in relation to the practice of 'seeding'. It's a decision of Judge Birss QC and you can read it in full here.

Binley's has provided specialist healthcare databases for nearly 20 years, including its Database of GP Practices - widely used by the pharmaceutical industry. To monitor unlawful use of its databases, Binley's 'seeds' them by planting the details of fictional contacts and other unique indicators.

In August 2007 one of Binley's practice nurse 'seeds' received a medical catalogue from the Precision Marketing Group - a pharmaceutical mailing and marketing business. It transpired that the practice nurse data formed part of a larger database that Precision had purchased from another company, Bespoke Database Organisation Limited, in May 2006.

The 1709 Blog reported on the summary judgment hearing in this case held in October 2010. At that hearing, Judge Birss QC found that database right subsisted in the GP Practices Database, and that it was owned by Binley's. He also struck out those parts of the defendants' defences that the claim had already settled. However, the judge was then unwilling to decide the issue of infringement because it was not yet known how many seeds had been included.  This made it impossible to assess how much data had been taken (even though he considered it "highly probable" that the amount used by Precision was substantial).

The sole remaining issue to be decided at trial, therefore, was 'substantiality' -- did Precision extract and/or reutilise a substantial part of the Database (assessed either quantitatively or qualitatively).

The key question for data-owners, as alluded to in the previous post, is how a fictional 'seed' can be used as the basis (or starting point) to assess whether a substantial amount of 'genuine' data has been extracted. There must always be the possibility that genuine contact details could have been obtained from another source. It can never be entirely discounted that a defendant mailed only a single seed, however unlikely this might be. For that reason, there has long been uncertainty as to how the courts might treat evidence derived from 'seeding'.

The variations in the seed details used by Binley's over time enabled them to identify that the data must have derived from Edition 5 of the Database, available between February and September 1997. Binley's was then able to pinpoint the source to a dataset licensed to a business operated by Philip Bothwell - a director of Bespoke - in April 1997.

Following disclosure, it became clear that only two seeds had been included in the database in 1997 - both of which appeared in the data used by Precision in 2007. In fact, of 8,363 records supplied in 1997, 6,901 of them matched the 2007 data. The judge was willing to accept these differences, which he put down to processing of the data over time, and found that the data had derived from Binley's. This represented about 11% of the Database, which was found to constitute a substantial part. The Court also found it to be a substantial part on a qualitative basis, given the scale of investment made by Binley's in developing and maintaining the database. This suggests that Precision would have been found liable even if a lower percentage had been used.

The key to the approach taken by Judge Birss QC is that, in contrast with the test at the summary judgment hearing, he was now required to decide whether Precision had, on the balance of probabilities, extracted a substantial part of the Database. It is clear that he found the 'seed' evidence sufficiently compelling to find that the data must have derived from Binley's database, particularly given the nature of bulk mail-shot marketing. Given his comments at the time, had Judge Birss QC known in October 2010 that there had only been two seeds he might have been swayed to award summary judgment on infringement.

This decision is of huge benefit to the Wilmington Group, the data-publishing industry and for database owners generally, in that it underlines the role that a properly implemented 'seeding' strategy can play in the enforcement of rights in data. This judgment provides an invaluable insight into the approach that the Courts will adopt when considering what might constitute a 'substantial' part based on evidence determined through the analysis of seeds, shedding light on a previously uncertain area of the law, which should provide data owners with some confidence when it comes to enforcing their rights through the Courts in future".

"Cast your seeds upon the database ..."

Which one is the seed ...?

In Beechwood House Publishing Ltd (t/a Binley's) v Guardian Products Ltd and another [2010] EWPCC 12, Judge Colin Birss QC gave judgment in a database right dispute in the Patents County Court. In an application for summary judgment, in which the defence was that the dispute had already settled, the court persuaded the parties to agree to treat the application as the trial of the settlement issue and then decided it properly, achieving a substantial saving of both time and expense.

The database in which infringement was alleged was "Binley's Database of GP Practices", which began in 1994.  This consists essentially of the names and addresses of individuals (such as nurses and doctors) associated with general medical practices. The edition allegedly infringed apparently names 159,576 individuals, located at 11,480 general practices within the UK. In pre-database right days this would have been a traditional copyright infringement claim.  Anyway, as the judge, explained:

"4 In August 2007 the claimant found clear evidence that the first defendant was using information from the claimant's database. This was because the claimant puts a few seeds in its database. The seeds are dummy entries which do not correspond to real people. They are fictitious entries with addresses corresponding to the claimant's staff. Thus the claimant will find out if someone is using data from its database because a letter will be sent to one of the seed addresses. That is what happened in this case and this action ensued.

5 The underlying facts are not in dispute. The mailing to the seed entry took place in about August 2007. The letter was sent by the first defendant. The first defendant obtained the data it used from the second defendant and the second defendant in turn obtained the data in March 2006 from an organisation called Bespoke Database Organisation Ltd ("BDOL"). The data from BDOL included the seed entry. There is no doubt that the BDOL data includes at least one entry from the claimant's database, that is the seed. There is also no doubt that BDOL used the claimant's database as one of the sources for the BDOL data. There is however an issue as to the extent of that use  ... If ... the claimant has a good claim to ownership and subsistence of database right and if ... the BDOL mailing list includes or consists of a substantial part of the claimant's database then it is not in dispute that the defendants infringed the claimant's database rights".

But what evidential value can be placed upon the fact that one or more seeds received a mailing from the defendant? Does this raise an inference of substantiality of the degree of copying? How many seeds were there in relation to the database a a whole? And suppose the defendant mailed only to seeds and not to genuine entries. Anyway, the judge addressed the seed issue thus:

"75 I am ... struck by the claimant's statement that there are "a few" seeds in the database. The claimant has not stated how many "a few" means and has so far refused to tell the defendants how many there are. No doubt that is for the claimant's own good commercial reasons. However it seems to me that one way of gauging the number of entries derived from the claimant's database might be to ask what proportion of the seed entries ended up with the defendants. Such an exercise would no doubt have to be treated with caution but it at least might shed some light on the matter. For example just because only one seed came to light does not mean others were not present. However if only one seed from hundred was present that might suggest a lesser fraction derive from the claimant whereas if "a few" means only 3 or 4 seed entries then that might suggest a rather higher fraction. Although substantiality is not necessarily a purely quantitative matter, some idea of numbers would be a start".

The case will now continue. The 1709 Blog expects events to accelerate since Judge Birss has said plainly that he expects the case to be dealt with very quickly and economically.