Are databases capable of copyright protection? - the case of BHA vs Discovery

Although it has been known for many years that a collection of data is capable of being protected by the Copyright Act No. 98 of 1978, it is always difficult for an organisation to go down the road of initiating legal proceedings against a copyright infringer. One of the main aspects relating to this is that – unlike really “orginal” works, the “originality” in a database is often not the data itself (which can be freely available) but in the fact that the database puts it all together in one place. In addition the database often allows for the data to be cross-referenced in a manner that was not possible before.

It was in the light of this that the Board of Healthcare Funders v Discovery Health Medical Scheme and two others (Unreported, case no: 35769/2010 in the North Gauteng High Court) is of particular interest.

In essence what had occurred is that the Board of Healthcare Funders (“BHF”) had created a Practice Code Numbering System ("PCNS") which was used by all South African medical schemes and medical care or healthcare service providers – basically everyone in the healthcare business – and numbers 91 000 unique codes. This code system provides unique practice code numbers to all healthcare providers (such as doctors) so that they could be identified for the purposes of payment to them by the Medical Schemes and various other uses.

In 2010 Discovery resigned as a member of BHA (which meant that Discovery stopped paying the royalty of R1.30 per principal member to BHA) but nonetheless continued to use the PCNS. The BHA agreed that Discovery was able to resign but indicated that if it did then it must stop using the PCNS or pay the royalty fee.  When Discovery refused to do so BHA initiated copyright infringement action against Discovery in the North Gauteng High Court.

Discovery defended the action on several grounds, including:

1. No copyright could exist in the work;
2. BHF is not the author (this is not relevant nor a defence) nor the owner;
3. The state is the owner (if copyright is possible);
4. There is an implied perpetual licence;
5. Alternatively there is a continued licence in that they paid for it.

All of the above defences as raised by Discovery were dismissed. Obviously one of the most important aspects related to whether the database containing the PCNS was capable of enjoying copyright protection. In this respect Judge Jody Kollapen said:

"It would be cynical to suggest that no effort or skill was expanded in the development of the system over the years and in my view the respondents' stance that the work lacks originality must be dismissed in the light of the meaning that has come to be attached to the concept of originality in the case law developed over the years."

Judge Kollapen further refered to Ladbroke (Football) Ltd v William Hill (Football) Ltd [1964] 1 WLR 273 (HL) with approval where Lord Pearce at p479H-I states:

"The words 'literary work” included compilation. They are used to describe work which is expressed in print or writing irrespective of whether it has any excellence of quality or style of writing. The word 'original' does not demand original or inventive work but only that the work should not be copied and should originate from the author. In deciding therefore whether work in the nature of a compilation is original, it is wrong to start by considering individual parts of it apart from the whole as the appellants in the argument sought to do. For many compilations have nothing original in their parts, yet the sum total of the compilation may be original."

While the matter has been appealed (and we are still awaiting the outcome) it is notable that that the BHA was essentially completely successful in that it managed to get an order:

1. Preventing Discovery from using the PCNS without a written licence;
2. Interdicting (stopping) Discovery group companies from assisting to use the PCNS;
3. Ordering Discovery to provide all the records to the BHA which incorporate the PCNS;
4. Ordering Discovery to pay the BHA a royalty of R1.30 per principal member; and
5. Legal costs.

Should you be unsure about whether your computer program or database (there is a difference) is capable of being protected by copyright please contact us.