In the case of SIA "CV-Online Latvia" v SIA "Melons" (C-762/19), AG Szpunar suggested that a search engine’s indexing of a database would only amount to infringement of the maker’s sui generis database right if it adversely affected the maker’s substantial investment.
CV-Online is a Latvian online recruitment company that publishes job vacancies. Its website contains a database of vacancy notices and meta tags that allow search engines to identify and index the website pages.
SIA "Melons" ("Melons") is a Latvian search engine specialising in job searches that allows users to locate vacancy notices through specific search criteria. Search results are displayed on Melons’ own website, along with hyperlinks to the original sources and their meta tags.
CV-Online issued proceedings for infringement of its sui generis database right under Art. 7(1) of the EU Database Directive (96/9/EC) (the "Database Directive"), on the grounds that Melons "extracts" and "reuses" a substantial part of its database.
Under the Database Directive:
- Art. 7(2)(a) provides that "extraction" means the permanent or temporary transfer of all or a substantial part of the contents of a database to another medium by any means or in any form; and
- Art. 7(2)(b) provides that "reutilisation" means any form of making available to the public all or a substantial part of the contents of a database by the distribution of copies, by renting, by online or other forms of transmission.
The Latvian court found that Melons had infringed CV-Online's database right by re-utilising it. Melons appealed and argued that because CV-Online’s website does not operate "in real-time”, it does not provide online transmission. Melons also claimed that CV-Online's meta tags do not form part of its database.
The appeal court referred two questions on the Database Directive to the Court of Justice for a preliminary ruling:
- Does the use of a hyperlink to redirect end users to the database maker’s website to consult the database constitute “reutilisation” under Art. 7(2)(b)?
- Does the reproduction of the information in database meta tags by a search engine constitute "extraction" under Art. 7(2)(a)?
AG Szpunar reformulated the referred questions and considered whether, under Art. 7(1) and (2) of the Database Directive, the maker of a database that is freely accessible on the internet is entitled to prevent the use of that database by an internet search engine that specialises in searching the contents of databases.
1. "Extraction" and "reutilisation"
The AG considered Innoweb B.V. v Wegener ICT Media B.V., Wegener Mediaventions B.V (Case C-202/12) ("Innoweb"), which established that the use of meta search engines has the potential to constitute "reutilisation" of the contents of a database under Art. 7(2)(b).
However, he distinguished Melons’ search engine as a “content aggregator” that works by regularly indexing websites and storing copies on its own server. Users carry out searches based on Melons’ own search forms and criteria, rather than based on those of the original websites. Many generalist search engines are content aggregators and typically index the entire world web. Melons’ search engine, however, only indexes specific websites with job vacancy notices.
As a content aggregator, the AG highlighted that Melons’ search engine allows users to explore the entire contents of original website databases. He therefore found that it "reutilises" the contents within the meaning given to Art. 7(2)(b) in Innoweb. Moreover, he held that by indexing and copying the contents of websites to its own server, Melons’ search engine also "extracts" the contents of databases under Art. 7(2)(a).
2. Adverse effect on investment
Despite the apparent infringement, the AG acknowledged that content aggregators have a significant role in the functioning of the internet and in the functioning of the digital economy. He considered that not only do content aggregators allow information on the internet to be more efficiently structured and searched, but they also contribute to the smooth functioning of competition and to the transparency of offers and prices.
As such, the AG considered that a balance must necessarily be struck between the interests of database operators whose contents are aggregated, and those of content aggregators and their users. He stated that this balance should be based on the adverse effect to the database maker’s substantial investment, specifically on the risk to database maker’s possibility of recouping their investment by normal exploitation.
In summary, the AG consideredthat Art. 7(1) and (2) of the Database Directive should be interpreted as follows:
- A search engine which copies and indexes the whole or a substantial part of the contents of databases that are freely accessible on the internet and then allows its users to carry out searches in those databases according to criteria that are relevant from the aspect of their contents, "extracts" and "reutilises" those contents under Art. 7(1) and (2); and
- The maker of a database may prevent the "extraction" or "reutilisation" of such contents only on condition that "extraction" or "reutilisation" adversely affects their investment in obtaining, verifying or presenting those contents.
Additionally, the AG noted that national courts must ensure that the exercise of this right does not result in an abuse of a dominant position under Art. 102 TFEU or applicable national competition law.
The opinion now goes to the Court of Justice which will render a final decision. AG opinions are often followed, but sometimes not.
This is an important ruling for operators of content aggregator search engines. The requirement of an adverse impact on the database maker’s substantial investment for infringement of sui generis database rights under Art. 7 of the Database Directive is new and not provided for by the wording of the Art. 7.
Also noteworthy is the fact that the AG made no mention of meta tags, despite their express citation in the second referred question. His view was that Melons' reproduction of information in the database meta tags was an external manifestation, of secondary importance, of the "extraction" and "reutilisation" of the database contents.
As is obligatory on reporting EU cases, Brexit needs to be mentioned. The eventual decision of the Court of Justice in this case will not be binding on UK courts interpreting the retained version of the Database Directive. It will, however, be persuasive. UK rights holders and aggregators will also be interested in the final decision.
"The protection conferred by the sui generis right should be granted only when the extraction or reutilisation in question adversely affects the investment in the creation or functioning of the database protection of which is sought, in the sense that it constitutes a risk for the possibilities of recouping that investment, notably by threatening the revenue from the exploitation of the database in question."