IP in Data and Algorithms – Betting on a bundle of rights?

20th May 2019

Data may be the oil of the digital economy but its legal protection is fragmentary and complex.  First it’s generally understood there is no such thing as “property” in information as such – so for example an electronic database of information cannot be said to be property in the way that the server on which it sits is property.

The law says that you need to distinguish between the information/data itself (in which there is no right of property), the physical medium on which it is recorded (which is tangible property – it can be exclusively “owned” and “possessed”) and the intangible intellectual property rights (copyright, database right and rights in confidential information) that may nevertheless still protect the information.

The EU has been thinking about a new legal right that would protect data – a “data producer’s right” – but such a right is a long way off.  Because of the uncertainty surrounding how the law protects data contracts are often used to deal with the matter even though the legal basis for the protection of the data may be unclear.

A recent case involving horse racing data illustrates some of conundrums around protecting data – The Racing Partnership Limited and others v Done Brothers (Cash Betting) Limited and others [2019] EWHC 1156.  The case concerned rights to valuable pre-race data generated at racecourses which was then supplied to bookmakers and others off-course – to betting shops for example.

The “owners” of the data sought to protect their rights in a number of ways – through breach of copyright, breach of database right and breach of confidence and also an overarching claim in conspiracy – the defendants it was alleged had conspired to use unlawful means (based on claims of breach of contract and IP infringement) to injure the data “owners”/claimants.

At trial the claimants/ data “owners” failed in all their claims apart from in relation to breach of confidence – here the court held the pre-race data was commercially valuable and as the claimants had sought to prevent its distribution off-course they were entitled to protect it – even though the information was potentially publicly available.

What is also interesting is that the court rejected any argument that the relevant data was protected by copyright – it was not “original” enough – it was generated by an algorithm by “pure routine work” not involving sufficient skill, labour and judgment to merit copyright protection.  As for database right the use made of the data did not amount to database right infringement.

The case illustrates the challenges that can arise in protecting data.  The data “owners” here had to make a number of arguments only one of which – breach of confidence – succeeded at trial.  Also the fact that the output of an algorithm had no copyright protection is surprising – this may have been due to the simplicity of the algorithm  and the simplicity of the output – a “Betting Show”  – a single representative price for each horse in race.  Also the judge seemed swayed by a much earlier case involving greyhound racing data which had come to a similar conclusion.

The case also involved an analysis of a contract used to assign the IP in the data to the claimants which the defendants alleged was ineffective – the judge however held it was effective – notwithstanding that he had to carry out a detailed analysis of the contract as a whole and its relevant clauses and Schedules to come to this conclusion.  This highlights the importance of getting contract drafting right in such cases.