It’s all About the Data

Ievgen S. Antoniuk

There’s nothing new in the Information Rules. None of the Internet giants that currently exist owns material assets that are at least closely equivalent to their stock value. Today, structured and aggregated data is the main asset. One can find the 20th century to be a time of mining. We borrowed a lot of the Earth’s treasures and then had to move on to the next stage of the Renaissance’s values, where the human being should be a benchmark.

The rise of the digital economy and electronic commerce made lawmakers unaware of the new demands towards a swiftly changing environment and rapid speed in the formation of new business models. Fundraising and investment are now based on these two main terms — personal information and content aggregation. The first one provides us with social demand and the second one with social production. Whoever can redistribute production to targeted demand rules the economy in the digital age.

Being conservative, let’s start from production. Whoever is willing to collect another person’s content or data on the web will have to deal with copyright and database restrictions and the prospect of entering into negotiations with every single content-owner to settle all financial and attribution matters. This is rather time-consuming and is likely to require hiring a bookkeeper the moment several content-owners turn into one’s suppliers. Imagine you want to create the biggest factory for content collection — how many negotiations can you hold at once? Fancy the burden of accounting that you’ll have to cope with to meet the diverse requirements of hundreds of authors. Can the business environment handle this burden and is it possible to ensure the growth of startups and leadership of a country in the digital economy? In fact, there is no sense in waiting for content to be created for your exact business needs. It’s much easier to collect existing content from the open web and aggregate it to make one’s own database by using web search engines. Search engines are based on web scrapers or web spiders — an algorithm that crawls the web and creates indexed copies of all scanned web pages as well as copies of all the content on these pages. Thus, one can easily fill one’s database with relevant content: news, goods prices or services and any kind of artistic content too.

Legislative history provides us with a balance example embodied in a “Fair Use” principle introduced by the Fair Use Act (amended 17 U.S.C.). The Copyright Act was intended to promote creativity, thereby benefitting the artist and the public alike. To preserve the potential future use of artistic works for the purposes of teaching, research, criticism, and news reporting, the U.S. Congress created the fair use exception. It states that (i) limited and (ii) highly transformable use should not be treated as a copyright violation. The term “limited” should be interpreted as scope of appropriate use, and it also implies a few more principles. The first one is a “de minimus” principle. Courts apply it when a certain portion of copyrighted content is too small to become a citation. Thus, there is no strict criterion on determining what percentage of copyrighted original work should be scraped by a search engine to define that it is small and can be considered as “partial use”.   The second principle determines the marketing impact of possible copying. In Kelly v Arriba Soft Corp the court stated that Arriba didn’t operate its website for commercial purposes and that Kelly’s images were a part of the Arriba search engine’s database. While the use of Kelly’s images was commercial, it was more incidental and less exploitative in nature than more traditional types of commercial use. Arriba was neither using Kelly’s images to directly promote its website nor was it trying to profit by selling Kelly’s images. Instead, Kelly’s images were among thousands of images in the Arriba search engine database. Because the use of Kelly’s images was not highly exploitative, the commercial nature of the use is only slightly more crucial than fair use. In other words, courts will try to find out whether the web scraping of copyrighted data constitutes a market competition and is, therefore, harmful for the respective copyright owner or not and whether any kind of profit loss can occur as a result of scraping and redistributing of scraped information.

Under the “high transformable” principle courts define whether “the central purpose of this investigation is to see whether the new work merely supersedes the objects of the original creation, or instead adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message; it asks, in other words, whether and to what extent the new work is transformative”.

Copyright infringement in the USA

The Copyright Act protects unique materials (text, images, underlying code thanks to which users see everything on the website. Incidental usage of copyrighted content from the website may allow copyright liability and such usage can constitute a fair use of the copyrighted materials. Copyright doesn’t protect ideas and facts (commonly known information), numbers, federal government works, titles, names and slogans. However, they can be protected with a trademark.

Fair use is the thing that acts against the claim of copyright infringement. It allows legal usage of the materials without gaining the permission of the copyright owner. Judges take a decision whether a particular case is subject to fair use based on four factors: purpose and character of your use, nature of the copyrighted work, amount and substantiality of the portion taken, and effect of the use on the potential market.

Contractual breach

Terms of use are published on the majority of commercial websites. Here users can see what acts they are allowed to commit and what are prohibited. After users read the terms of use they need to agree to them, and only then they will be able to proceed to use the website. Usually users have to click “I accept” below the terms of use. Those clickwrap agreements are considered to be valid, since users confirmed their awareness. Browsewrap agreements are also considered to be valid.

Some terms of use may include prohibition against use of web crawlers on a particular website.

Trespass to Chattel

The illegal use of someone’s movable or immovable property, also referred to as chattel, was also recognized by courts as one that can take place quite frequently. Simply put, “trespass to chattel” means unlawful interference with another person’s possession by means of web crawling or scraping tools causing damages to the owner.

It can be illustrated with the prominent case involving the widely known eBay, Inc. which accused an auction aggregation service, Bidder’s Edge, Inc., of having scraped the eBay auction information by applying web spiders. By doing so, Bidder’s Edge illegally gathered the data from the eBay website, visiting it almost 100,000 times a day. The court asked eBay to show that Bidder’s Edge interfered with eBay’s possessions intentionally without having appropriate permission and also prove that illegal actions on the part of Bidder’s Edge greatly damaged eBay. The court took into account the fact that the web spiders used by Bidder Edge consumed a large part of the eBay’s server capacity and stopped eBay from using its own possessions for its own purposes. Based on the evidence collected, the court issued an initial injunction against Bidder’s Edge asking to cease use of automated programs and tools in order to access and copy any part of eBay’s database.

In practice a plaintiff is often required to prove that during the trespass he or she owned a considerable possession. Additionally, it should be proved that there was a direct unauthorized breach of one’s property rights. Though damage caused is not an obligatory constituent element of trespass to chattel as in Kirschbaum v. McLaurin Parking Co., 188 N.C. App. 782 (N.C. Ct. App. 2008) According to the information provided by USLegal, Inc.: “A person may be said to have possession of a chattel if s/he has physical control of the chattel with the intent to exercise such control on one’s own behalf, or on behalf of another”.  

In trespass to chattel, measures of damages play the key role, since only they can help to distinguish violation of one’s property rights.

Countries of the European Union have a different approach towards web scraping. This approach is based on database protection. Under the “Database Directive” two main points should be be taken into consideration: data extraction and data re-cycling.

The Database Directive also provides two forms of protection. Article 3 (1) involves the first form: “databases which by reason of the selection or arrangement of their contents, constitute the author’s own intellectual creation, shall be protected as such by copyright”. Article 7 involves the second one, which “has been qualitatively and/or quantitatively a substantial investment in either the obtaining, verification or presentation of the contents [of a database]”.

Database Directive has a few exceptions to these created rights. Thus, Article 6 allows users to make a copy of a copyright-protected databases. Article permits users of a publicly available database to reuse some parts of the content, if their use does not conflict with normal use of databases or does not interfere with the interests of the database’s author.

Database nature

A database is actually a scope of data arranged by a compiler. There are two types of databases — creative and non-creative, and they are dealt with under different legal regulations. Those facts collected in a database cannot be copyrighted, however, its arrangement made by the compiler can be protected.

Creative databases are those that have unique algorithms and were created with some sort of originality. Non-creative databases are those that are not unique, but they were created with time or resources investments. The level of creativity required for copyright protection has not been defined internationally, so this issue is rather complex. For example, the US doesn’t protect non-creative databases. However, some non-creative databases in European countries created a sui generis right (special right) in order to protect them. Furthermore, we shall admit the “disruption” principle, which is akin to trespassing prohibits any interaction with one’s database in a way that can be harmful for the database’s operation.

To underline the above-mentioned if one is planning to work with data aggregation one should, first of all, perceive the scope of use of one’s end product, find a market niche and estimate the possible impact of his system’s functions to third party rights. Accordingly, no country or international formation will prevent new businesses from appearing, however the US and EU legal systems are prohibiting web-based business models that could have a negative impact on existing market players, regardless of whether it’s an individual content creator or a holder to an entire web index database.