Clifford Chance

The Judgment of the CJEU of 3 June 2021 deepens its analysis and provides relevant guidance on the use by search engines and hyperlinks of the content of databases and also represents a significant shift from the previous case law of the CJEU.

Introduction

Copyright aficionados will already know that the courts are used to handling proceedings involving job adverts. In fact, legal issues related to job adverts and their relationship with copyright are nothing new in Spain.

During the 90s, the well-known Spanish newspaper "La Vanguardia" filed a complaint against the editor of a weekly magazine that published job adverts released by various media outlets, including La Vanguardia, which claimed that its job adverts were protected by copyright. In April 1995, Barcelona Court of First Instance Number 25 upheld La Vanguardia's complaint. While the Court of Appeal revoked the Court of First Instance's decision, the Spanish Supreme Court reversed the decision of the Court of Appeal by concluding that the job adverts at stake were original and could therefore be copyrighted: "such advertisements, known as "job offers", are simply a creative activity involving a substantial element of originality, which cannot be pigeonholed into template clauses or typographical uses. [...] It should not be forgotten in this respect that a job offer, with the socio-economic burden it entails, requires intellectual activity at a certain level to make the offer attractive with the aim of obtaining a positive outcome that will benefit both the offeror and the future applicant, and also comprises the medium in which the offer is made, which therefore has the right to be protected in its creative endeavour"¹. In the same vein, some years later, the Court of Justice of the European Union ("CJEU") declared in 2009 that it is indeed possible that a text of just eleven words may be considered original².

As a result of digitalisation and the unstoppable rise of content aggregators, the battle for job adverts is now fought on the internet rather than on paper. Proof of it is that, in 2013, in Innoweb³, the CJEU was called on to decide a case in which the results produced by a dedicated meta search engine that enabled searches to be carried out on third party websites were found to be contrary to Article 7 of Directive 96/9/EC of the European Parliament and of the Council of 11 March 1996 on the legal protection of databases ("Directive 96/6/EC"), since the meta search engine unlawfully "re-utilised" the whole or a substantial part of the contents of a database that collected car sales adverts.

In the CJEU's judgment of 3 June 2021 in CV-Online v Melons, Case-762/19 (the "Judgment"), which is the subject of this article, the CJEU ruled on another case involving search engines and job adverts. Again, the admissibility of the "extraction" and the "re-utilization" of database content by a search engine was at the heart of the dispute. However, the novelty of this case lies in the fact that the Judgment not only deepens its analysis and provides relevant guidance on the use of database content by search engines and in hyperlinks, but also represents a significant shift from the CJEU's previous case law set out in 2013 in the Innoweb case.

Background to the dispute

The dispute the Judgment relates to dates back to 2019.

CV-Online SIA ("CV-Online") is a Latvian company that runs the website www.cv.lv, which includes a database⁴ containing job adverts published by employers. CV-Online's website is also equipped with meta tags that allow internet search engines to better identify the content of each page in order to index it correctly⁵. Those meta tags contain the following keywords for each job advertisement in the database: "job title", "name of the undertaking", "place of employment" and "date of publication of the notice".

In 2019, Melons SIA ("Melons"), a company incorporated under Latvian law, operated the website www.kurdarbs.lv⁶, a search engine specializing in job adverts, which made it possible to carry out a search on several job sites according to various criteria, including type of job and "place of employment". The www.kurdarbs.lv site used hyperlinks to refer users to the websites on which the information they were looking for was initially published, including CV-Online's site. Users could use the hyperlinks, inter alia, to access the website www.cv.lv, in order to view that site and its contents. The information contained in the meta tags inserted by CV-Online on its website were also displayed in the list of results obtained when using Melons' specialised search engine. The origin of the dispute was therefore essentially limited to the display by Melons, in the list of results generated by its search engine, of (i) a hyperlink to CV-Online's website and (ii) the meta tags inserted by CV-Online on its site.

Against this background, CV-Online brought an action against Melons in which it claimed that Melons "extracted" and "re-utilised" a substantial part of the contents of the database on the website www.cv.lv. In other words, that displaying the hyperlink to CV-Online's website in the list of results generated by Melons's search engine and displaying the meta tags should be considered a non-authorised "extraction" and "re-utilisation" of the contents of CV-Online's database.

Following the judgment's appeal to the court of first instance, which found that there had been a breach of CV-Online's sui generis database right on the grounds that there was a "re-utilisation" of its database, the Regional Court of Riga⁷ decided to stay the appeal proceedings and to refer two questions to the CJEU for a preliminary ruling.

Questions referred to the CJEU

The Regional Court of Riga referred the following two questions to the CJEU regarding the interpretation of Article 7(2)(b) of Directive 96/6/EC, which refers to the sui generis database right:

1. Should Melons' activities, consisting of using a hyperlink to redirect end users to CV-Online's website, where they can consult a database of job ads, be interpreted as falling within the definition of "reutilisation" contained in Article 7(2)(b) of Directive 96/6/EC, more specifically, as the reutilisation of the database by another form of transmission? 
2. Should the information containing the meta tags that is shown in Melons' search engine be interpreted as falling within the definition of "extraction" in Article 7(2)(a) of Directive 96/6/EC, more specifically, as 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?

The Regional Court of Riga was essentially asking the CJEU whether:

1. a specialised search engine displaying a hyperlink redirecting the user of that search engine to a third-party website (CV-Online) providing access to the contents of a job advert database fell within the definition of "re-utilisation" contained in Article 7(2)(b) of Directive 96/6/EC; and whether 
2. the information from the meta tags of that website displayed by that search engine was to be interpreted as falling within the definition of "extraction" contained in Article 7(2)(a) of the Directive. 

It is important to note in this regard that Article 7 of Directive 96/6/EC establishes in paragraph (1) the right of a maker of a database which shows that there has been qualitatively and/or quantitatively a substantial investment in either the obtaining, verification or presentation of the contents, to prevent "extraction" and/or "re-utilisation" of the (whole or of a substantial part, evaluated qualitatively and/or quantitatively, of the contents of that database⁸. For the purposes of Article 7(1) of Directive 96/6/EC, Article 7(2) of said Directive clarifies that:

(a) "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 that
(b) "re-utilisation" 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 on-line or other forms of transmission. 

Since the above-mentioned questions were interconnected, the CJEU decided to examine them together, as it understood that the Latvian court which referred them was asking, in essence, whether Article 7(1) and (2) of Directive 96/6/EC must be interpreted as meaning that an internet search engine specialising in searching the contents of databases, which copies and indexes the whole or a substantial part of a database freely accessible on the internet and then allows its users to search that database on its own website according to criteria relevant to its content, is "extracting" and "re-utilising" the content of that database within the meaning of that provision, and that the maker of such a database (i.e. CV-Online) is entitled to prohibit such extraction or re-utilisation of that same database.

Findings of the CJEU

Purpose of the sui generis database right and protection of the substantial investment made by the database maker

In order to decide the dispute at hand, the CJEU considered it necessary, first of all, to build up its reasoning by defining the scope and purpose of the protection of the sui generis right under Directive 96/6/EC.

In this respect, the CJEU adheres to the doctrine that it had previously established in the Innoweb case and restated that the purpose of the sui generis right is to ensure the protection of a substantial investment in the obtaining, verification or presentation of the contents of a database. That is, to ensure that the person who has taken the initiative and assumed the risk of making a substantial investment in terms of human, technical and/or financial resources in the setting up and operation of a database receives a return on his/her investment, by protecting him/her against the unauthorised appropriation of the results of that investment. Thus, a database, in the CJEU's opinion, is only eligible to be protected by the sui generis database right if there has been, qualitatively and/or quantitatively, a substantial investment in the obtaining, verification or presentation of the contents of that database. In this regard, according to the CJEU's settled case law:

1. investment in the obtaining of the contents of a database concerns the resources used to seek out existing independent materials and collect them in the database (and not the resources used for the creation of independent materials as such)⁹; 
2. investment in the verification of the contents of a database refers to the resources used, with a view to ensuring the reliability of the information contained in that database, to monitor the accuracy of the materials collected when the database was created and during its operation¹⁰; and 
3. lastly, investment in the presentation of the contents of the database includes the means of giving that database its function of processing information, i.e. those used for the systematic or methodical arrangement of the materials contained in that database and the organisation of their individual accessibility¹¹.

Once it has been determined that a relevant database meets the "substantial investment" requirement in the expressed terms¹² and then the protection of the sui generis database right is granted, the CJEU goes on to analyse whether the display by Melons, in the list of results generated by its search engine, of (i) a hyperlink to CV-Online's website and (ii) the meta tags inserted by CV-Online on its site constitutes an "extraction" and/or a "re-utilisation" of the whole or of a substantial part of the contents of CV-Online's database under the terms of Article 7(2) of Directive 96/6/EC.

"Extraction" and "re-utilisation" of the contents of a database

As expected, the CJEU considers that the concepts of "extraction" and "re-utilisation" defined in Article 7(2)(a) and (b) must be taken as a starting point. However, the CJEU understands that, in light of the purpose of the sui generis database right, those concepts of "extraction" and "re-utilisation" must be broadly interpreted, "as referring to any act of appropriating and making available to the public, without the consent of the maker of the database, the results of his/her investment, thus depriving him or her of revenue which should have enabled him or her to redeem the cost of that investment"¹³.

Having said that, the CJEU then focuses on how Melons' specialised search engine works: it regularly indexes the websites – CV-Online's among them – on which it enables searches to be performed and keeps a copy on its own servers. Next, by using its own search form, the specialised search engine enables its users to carry out searches according to the criteria which it offers, such searches being carried out on the data that have been indexed. Moreover, by indexing and copying the content of the websites onto its own server, Melons' search engine transfers the content of the databases that comprise those websites, to another medium. Therefore, Melons' specialised search engine makes it possible to explore simultaneously, by means other than those provided by the maker of the database concerned (i.e. CV-Online), the entire content of several databases, including that of CV-Online, by making that content available to its own users. By providing the possibility of searching several databases simultaneously, according to criteria relevant from the point of view of jobseekers, Melons' specialised search engine gives users access, on its own website, to job adverts contained in those databases. Furthermore, making such data available is directed at the "public", as required by Article 7(2)(b) of Directive 96/6/EC, since anyone can freely use such a search.

It follows, according to the CJEU, that such transfer of the substantial contents of the databases concerned and making that data available to the public, without the prior consent of the maker of the database, constitute, respectively, acts of "extraction" and "re-utilisation" of those databases under the terms of Article 7(2) of Directive 96/6/EC.

Fair balance between the legitimate interest of the makers of databases and that of users and competitors of those makers

Notwithstanding the above, the CJEU considers that the "extraction" and "re-utilisation" of the content of a database without the consent of its maker is not sufficient per se. In order to prohibit these acts, as part of the infringement test, it is required that these acts "have the effect of depriving" the database maker "of income intended to enable him or her to redeem the cost of that investment"¹⁴. That is, having stated that the purpose of the sui generis right is to protect the substantial inversion made by the database maker in the obtaining, verification or presentation of the contents of his/her database, only those "extraction" and/or "re-utilisation" acts that cause significant detriment – evaluated qualitatively or quantitatively – to the investment of the database maker could be prohibited and be contrary to Article 7(1) of Directive 96/9/EC¹⁵.

This is because, in the opinion of the CJEU, it is necessary to strike a fair balance between, on the one hand, the legitimate interest of the makers of databases in being able to redeem their substantial investment and, on the other hand, that of users and competitors of those makers in having access to the information contained in those databases and the possibility of creating innovative products based on that information¹⁶. And, with the purpose of the sui generis database at the forefront of its mind, the main criterion in the CJEU's eyes for balancing the legitimate interests at stake must be the potential risk to the substantial investment of the maker of the database concerned, namely the risk that that investment may not be redeemed.

Thus, the CJEU understands that it is therefore for the national courts (in this particular case for the referring Latvian court, in order to rule on CV-Online's right to prohibit the "extraction" or "re-utilisation" of the whole or a substantial part of the contents of that database) to ascertain, in light of all the relevant circumstances, first, whether the obtaining, verification or presentation of the contents of a database – such as CV-Online's database – constitutes a substantial investment, and, second, whether the extraction or re-utilisation by a specialised search engine, such as Melons', constitutes a risk to the possibility of redeeming that investment.

Decision

In light of all the foregoing, the CJEU decided to answer the questions referred to it as follows:

"Article 7(1) and (2) of Directive 96/9 must be interpreted as meaning that an Internet search engine specialising in searching the contents of databases, which copies and indexes the whole or a substantial part of a database freely accessible on the Internet and then allows its users to search that database on its own website according to criteria relevant to its content, is "extracting" and "re-utilising" the content of that database within the meaning of that provision, which may be prohibited by the maker of such a database where those acts adversely affect its investment in the obtaining, verification or presentation of that content, namely that they constitute a risk to the possibility of redeeming that investment through the normal operation of the database in question, which it is for the referring court to verify."

Conclusion

In its Judgment of 3 June 2021, the CJEU deepens the analysis done in its previous doctrine on the use of search engines and hyperlinks and their relationship, from a copyright perspective, with databases. Yet this Judgment represents an important shift with respect to its previous case law. The CJEU confirms that, to be prohibited, the existence of an "extraction" and "re-utilisation" of the content of a database without the consent of its maker is required but it is not enough. It is also necessary that such acts deprive the database maker, or endanger its right to redeem the cost, of his/her investment. Moreover, while considering this risk, national courts must balance the interest of the database maker and of the other parties, as part of the infringement test.

In short, the CJEU seems to have redefined the sui generis database right with respect to the Innoweb case. Database makers and players eager to use third-party data in the digital arena must keep an eye on whether the CJEU confirms such doctrine in the future.

¹ Judgment of the Spanish Supreme Court (Civil Chamber) of 13 May 2002 (judge rapporteur: Mr Ignacio Sierra Gil de la Cuesta).

² See the judgment of the CJEU of 16 July 2009, Infopaq, C-5/08.

³ Judgment of the CJEU of 19 December 2013, Innoweb, C 202/12.

⁴ This database is developed and regularly updated by CV-Online.

⁵ These tags, of the microdata type, are not visible when CV-Online's internet page is opened.

⁶ At the time of writing this article, this webpage is still operative.

⁷ Rīgas apgabaltiesas Civillietu tiesas kolēģija.

⁸ In the case of Spain, this article has been transposed by Article 133 of the Spanish Copyright Act (Royal Decree 1/1996, of 12 April).

⁹ See judgments of 9 November 2004, The British Horseracing Board and Others, C 203/02, EU:C:2004:695, paragraph 31 and Fixtures Marketing, C 338/02, EU:C:2004:696, paragraph 22.

¹⁰ See judgment of 9 November 2004, The British Horseracing Board and Others, C 203/02, EU:C:2004:695, paragraph 34.

¹¹ See judgments of 9 November 2004, Fixtures Marketing, C 338/02, EU:C:2004:696, paragraph 27; Fixtures Marketing, C 444/02, EU:C:2004:697, paragraph 43; and Fixtures Marketing, C 46/02, EU:C:2004:694, paragraph 37.

¹² Technically speaking, the CJEU understands that, since the questions referred for a preliminary ruling are based on the premise that CV-Online’s database satisfies the "substantial investment" condition, it is for the referring national court to examine, where appropriate, whether the conditions laid down in Article 7 of Directive 96/9 are satisfied for the grant of protection by the sui generis right.

¹³ See paragraph 31 of the Judgment and the judgment of 9 November 2004, The British Horseracing Board and Others, C 203/02, EU:C:2004:695, paragraph 51.

¹⁴ See paragraph 37 et seq. of the Judgment.

¹⁵ See the judgment of 9 November 2004, The British Horseracing Board and Others, C 203/02, EU:C:2004:695, paragraphs 45 and 46. In this regard, Article 7 of Directive 96/9 protects the maker of the database against acts by a user which go beyond the legitimate rights of that user and thereby harm the investment of the database maker.

¹⁶ The CJEU has held, relying in particular on recitals 39, 42 and 48 of Directive 96/9, that the objective pursued by the EU legislature through the introduction of a sui generis database right is also to stimulate the establishment of data storage and processing systems which contribute to the development of an information market, against a background of exponential growth in terms of the amount of information generated and processed annually in all sectors of activity (see the judgment of 19 December 2013, Innoweb, C-202/12, EU:C:2013:850, paragraph 35).