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Contractual restrictions on use of online databases permitted

Contractual restrictions on use of online databases permitted

It seems obvious that contracts may contain restrictions on the use of content made available online. But it is not. Ryanair and PR Aviation have been conducting a court case on this for more than 5 years. On 15 January 2015 the Court of Justice of the EU (CJEU) handed down a decision which contains an answer to this question.

The facts
PR Aviation operates an online comparison site for budget airline tickets. The website uses a specialised search engine to take data from third-party websites, including that of Ryanair. In order to be able to consult data on Ryanair’s website, the user must first accept the website’s terms and conditions of use. These terms and conditions state that these data may not be used commercially. PR Aviation did make commercial use of these data, however, by using them on its comparison website.
Ryanair started proceedings and demanded that PR Aviation be prohibited from using its data and that it be ordered to pay damage compensation. It asserts that PR Aviation is infringing its database right and the copyright to its website’s database. It also asserts that PR Aviation has acted in breach of contract, namely by violating the agreed terms and conditions of use of Ryanair’s website.

The proceedings before the Dutch court
It was determined in the proceedings that Ryanair cannot enforce any database right or copyright to the database on its website made accessible via its website. The question remained of whether PR Aviation was guilty of breach of contract by putting these data to commercial use even though the terms and conditions of use of Ryanair’s website, which PR Aviation had accepted, state that this is not permitted.

PR Aviation argued that this contractual restriction on the use of Ryanair’s data is null and void on grounds of article 15 of Directive 96/9/EC (the EU Database Directive). This article states that a contractual restriction on normal use of a protected database is null and void. In the Netherlands this provision has been taken over in section 24a (3) of the Copyright Act and section 3 (2) of the Databases (Legal Protection) Act.

Although there is no protected database of Ryanair, PR Aviation argued that this provision applies in this case as well and that the restriction on the use of the contents of Ryanair’s website in the terms and conditions of use of the site is therefore null and void. PR Aviation’s argument was that otherwise an undesirable and illogical difference in contractual protection for protected and unprotected databases would arise. After all, this would mean that protected databases would not be able to contractually restrict the use of content and unprotected databases would indeed be able to do this.

The Dutch Supreme Court felt that there were indeed arguments to treat protected and unprotected databases equally on this point and to find that contractual restrictions on normal use are null and void for both categories. The Supreme Court submitted this question, which touches on a topic that has been harmonised in a European context, to the CJEU.

The CJEU’s judgement
The CJEU has now ruled that the prohibition on contractually restricting the use of content applies exclusively for protected databases (paragraph 39). According to the CJEU, Directive 96/9/EC does not preclude the author of an unprotected database from stipulating contractual restrictions on the use thereof by third parties. The CJEU did not follow the Supreme Court’s thinking, therefore.

But the CJEU also considers that the author of a protected database can indeed agree with the user on such restrictions for the use thereof: (paragraph 43) ‘If the author of a database protected by Directive 96/9 decides to authorise the use of its database or a copy thereof, he has the option, as confirmed by recital 34 in the preamble to that Directive, to regulate that use by an agreement concluded with a lawful user which sets out, in compliance with the provisions of that Directive, the “purposes and the way” of using that database or a copy thereof.’

My reading of paragraph 43 of the CJEU’s decision is that article 15 of the Directive has a different (narrower) meaning than evidently ascribed to it by the Dutch court.
It appears that article 15 of the Directive must be interpreted such that a user who has been given (implicit) permission by the author to use (part of) a protected database may not be limited in that ‘authorised use’ by means of a contractual provision (such as the terms and conditions of use of a website). If the permission for use is based on a licence agreement (terms and conditions of use), this too can contain restrictions on use. This seems obvious, in and of itself.

However, articles 6 and 8 of the Directive give a kind of guaranteed minimum right of use for protected databases, which may not be detracted from contractually. The point is that the author has made the database available to the user (online or otherwise). The purpose of this will be to allow a certain normal use of that database. In that case the author may not contractually prohibit the user from performing the actions that are necessary for normal use (article 6 of the Directive), for instance by prohibiting copying or saving while it is necessary to copy and save the online database in order to be able to call it up and/or gain access to it. Such a contractual restriction would render the right of use meaningless. The calling up and re-use of non-substantial parts of a database that has been made available to the public may, in this context, also not be prohibited contractually (article 8 of the Directive), provided the normal operation of the database or justified interests of the author are not harmed. The background of these provisions must, in my view, be found in the European legislator’s striving for a balance between the interests of authors and users of protected databases.

What must be defined as normal use, however, will differ from case to case. According to my understanding of the CJEU’s decision, there is a domain in which the parties are free to contract, but this domain is limited by the minimum preconditions mentioned above.
What does this decision mean for the concrete case of Ryanair and PR Aviation?
Because Ryanair’s database is not a protected database, Ryanair has a fully free scope for contracting, without being bound by the limits of articles 6 and 8 of the Directive. If the Dutch court finds that the terms and conditions of use of Ryanair’s website are part of a contract concluded with PR Aviation (a point which has not yet been decided in the proceedings), the restriction on use contained therein will apply fully.

This decision teaches that in the European Union it is certainly possible and advisable for an author of a database to limit the right of use of that database if he has an interest in doing so. Regardless of whether the database is protected or unprotected under the Directive. Ryanair has just such an interest, since its tickets can only be ordered via its website and because it tries, via its website, to sell extra (paid) services to the buyers of its tickets.

By Jaap Kronenberg

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