Friday 12 August 2011

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".

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