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PREMIUM LEGAL RESOURCES LEGAL FORMS ASK A LAWYER

By James Love, Consumer Project on Technology, 11/12/96
[Note: There have been substantial and ongoing changes in the U.S. position on this matter since this was written. For the latest info contact CPT at the address at the end of this file. -- LLL Staff]

INTRODUCTION

Sports fans in the United States will be surprised to learn that U.S. Government officials are pressing for the adoption of an International treaty that will (if enacted) significantly change the ways sports statistics are controlled and disseminated. The treaty isn't specifically directed at sports statistics--it is a much broader attempt to create a new property right in facts and other data now in the public domain--but it will have an enormous impact on the legal rights exercised by the National Football League (NFL), Major League Baseball (MLB), the National Basketball Association (NBA), the National Hockey League (NHL) and virtually all other professional or amateur athletic leagues. (The same treaty will radically affect the way that stock prices, weather data, train schedules, data from AIDS research and other facts are controlled, but this note will focus on the issue of sports statistics, a topic that illustrates the broad impact of the treaty). This comes at the same time the NBA and other sports franchises are stepping up their efforts to control the real-time dissemination of sports statistics through the Internet or with wireless paging devices. The treaty, however, addresses different and much more fundamental issues regarding ownership of information.

If the treaty is approved and implemented, sports leagues will have far broader powers to dictate the terms and conditions under which sport statistics are reported and disseminated. Nolan Ryan's Earned Run Average (ERA), the number of tackles or quarterback sacks by Lawrence Taylor, Cal Ripken's career batting average, Bobby Hull's career assists, the number of steals by your favorite NBA point guard, and similar information will be "owned" by sports leagues. According to the proposed treaty (and legislation introduced in the 104th Congress to implement the treaty), the NFL, NBA, NHL and MLB will have the right to prevent anyone from publishing these and other statistics without express permission from the sports league. This will include the right to control access to the historical archives of sports statistics, and even to dictate who can publish the box scores from a game or print a pitcher's ERA on the back of a baseball card.

The proposals for a new legal environment for publishing facts are outlined in a draft treaty on "databases" that will be considered at a December 1996 meeting of the World Intellectual Property Organization (WIPO), in Geneva, Switzerland. The proposal would require the United States and other countries to create a new property right for public domain materials. "Texts, sounds, images, numbers, facts, or data representing any other matter or substance," will be protected. (See the appendix for a more complete definition).

The treaty seeks, for the first time, to permit firms to "own" facts they gather, and to restrict and control the redissemination of those facts. The new property right would lie outside (and on top) of the copyright laws, and create an entirely new and untested form of regulation that would radically change the public's current rights to use and disseminate facts and statistics. American University Law Professor Peter Jaszi recently said the treaty represents "the end of the public domain."

Copies of the proposed treaty, a federal register notice asking for public comment, and independent commentary can be found at: http://www.public-domain.org/database/database.html

WHO IS PUSHING FOR THE DATABASE TREATY?

In 1991, the US Supreme Court ruled (in the Feist decision) that the facts from a telephone "White Pages" directory of names, addresses and phone numbers were not protected under the copyright laws, and that in general, "facts" could not be copyrighted by anyone. The Feist decision alarmed several large database vendors, who crafted this new "sui generis" property right that would protect facts, and just about everything else. (The vendors have already succeeded in obtaining a directive on the database proposal from the European Union, although no European country has yet passed legislation to implement the treaty). The most active supporter of this new property right is West Publishing, the Canadian legal publisher. A West Publishing employee chairs a key ABA subcommittee which wrote a favorable report on the treaty. A number of very large British and Dutch database vendors are also lobbying hard for the treaty.

West wants the new property right to protect the "page numbers" and "corrections" it adds to the judicial opinions it publishes in paper bound books. Telephone companies want to protect the names, addresses and telephone numbers they publish, and other database vendors want to protect scientific data or other non-copyrighted government information they publish. In seeking to protect these items, the treaty was written to stamp "owned by" labels on a vast sea of information now in the public domain. Copyright experts J.H. Reichman and Pamela Samuelson say it is the "least balanced and most potentially anti- competitive intellectual property rights ever created."

There is an active debate within the Clinton Administration over the proposed treaty. Bruce Lehman, the controversial head of the Patent and Trademark Office (PTO) is pushing for adoption of the treaty this December. Most administration officials don't have a clue what the database treaty does. Some people think it is a minor tinkering with the current copyright law. No one in the government has sought to understand the significance of the proposal in terms of the new rights to "own" facts, and until recently no one was aware that the treaty was so broad that it would change the way sports or financial statistics were controlled.

HOW WILL THE TREATY WORK?

In Feist, the Supreme Court noted:

(a) Article I, Sec. 8, cl. 8, of the Constitution mandates originality as a prerequisite or copyright protection. The constitutional requirement necessitates independent creation plus a modicum of creativity. Since facts do not owe their origin to an act of authorship, they are not original and, thus, are not copyrightable.

Since facts cannot be copyrighted, the supporters of the treaty have framed this as a new "sui generis" property right, which will have a separate statutory framework. "Originality" or "authorship" will not be required. "Texts, sounds, images, numbers, facts, or data representing any other matter or substance," will be protected. The information can be stored in "all forms or media now known or later developed." Both published and confidential information will be covered. The only thing required is a "substantial investment in the collection, assembly, verification, organization or presentation of the contents" of the protected work. The "rightholder" will have extremely broad powers to "authorize or prohibit the extraction or utilization" of the information from the protected database.

It takes a while for the implications of this new system to sink in. Some facts can be independently gathered, like the number of baseball games played in a year, the winners or losers of a tennis match, or the scores of a football game. For these data, there may exist several sources for the data. However, other facts are, by their very nature, only available from a single source, and will be controlled by monopolies. For example, baseball leagues employ scorekeepers who determine if a batter is credited with a hit or if a fielder committed an error, if a hit is reported as a single or double, or if an errant pitch is scored as a wild pitch or a passed ball. The league makes a "substantial investment" in the collection and maintenance of this data, which it disseminates to the press, and also stores and maintains in a database, through an arrangement with the Elias Sports Bureau. These data cannot be independently collected - and under the proposed database treaty, the league would own the facts themselves, and could dictate the terms under which these facts are published or redisseminated.

The NFL employs four persons who keep track of the play-by- play action for each game. They write up four separate reports, which are used to create a single official "box score." The final product is supervised by the Elias Sports Bureau, as a "work for hire" product, which is owned by the NFL. The NFL box score is very detailed, and includes analysis of each play. It records the league's statistics for the number of yards gained (or lost) on each play, who is credited with a tackle or a quarterback sack, or the number return yards on a kickoff or pass interception, and many other items. While someone who attended a football game could make an independent estimate of these items, it would likely be different from the official statistics, due to the inherent difficulty in measuring or assigning credit for performance on the field. The NFL's box score is given to the press, which uses the data to create its own news media reports.

An attorney who represents the National Football League (NFL) told us that the NFL has an interest in ensuring that there is an "official" source of the statistics, which are gathered with an appropriate standard of care and that the NFL "protects the official designation" of its statistics. These data are used for making decisions on the Hall of Fame, and to create special reports and information products, which the NFL provides to third parties, often for a fee.

Virtually all of the major league sports leagues have some system for creating statistics, disseminating the information to the press, storing the historical data, and marketing the statistics commercially. Major League Baseball, the NFL, and the NBA work with Elias, while the NHL has its own in-house system. There is little doubt that the process by which these statistics are generated will qualify for protection, under the treaty's minimal requirement that the league demonstrate it has made a "substantial investment in the collection, assembly, verification, organization or presentation of the contents" of the database. The work- for-hire "media sheets," "box scores," and other press handouts which report the statistics would be considered database elements, and reporting of statistics from these products would be subject to an entirely new type of licensing and control by the leagues which is far stronger than that which exists under copyright law. (See appendix).

The leagues have various methods of selling their "official" branded statistics. There are also many competitors who build databases from a variety of sources, including the published box scores that appear in daily newspapers, and probably the books and reports published by the leagues. The leagues do not currently assert "ownership" in the statistics directly, even as they try to prevent others from referring to the data as "official" statistics, but they are trying to prevent real time reporting of game statistics and situations over Internet or paging technologies.

The NBA told us that it permits accredited journalists to report scores from NBA games three times each quarter, and that it considers the minute to minute reports a "misappropriation" of its ability to sell performance rights for the event. The NFL takes a similar position with respect to its games. STATS, Inc. is a firm that provides real time scores and play-by-play descriptors to a variety of online and wireless information services. According to the NFL and the NBA, STATS, Inc. hires people to watch television broadcasts of the games, and type the play-by-play information into personal computers, which are linked to the STATS, Inc. computer network services. An example of this type of service that uses STATS, Inc. as a supplier of statistics is Instant Baseball, available at http://www.InstantSports.com/. Disputes over the real time Internet broadcasts of game situations and scores could well end up before the U.S. Supreme Court, as a test of the first amendment. In the NBA case involving Motorola, STATS, Inc. and America Online, the NFL and other leagues have filed amicus briefs in support of the NBA position, while the New York Times has filed a brief in support of Motorola, STATS, Inc. and America Online.

About two weeks ago the NBA discovered HR 3531, a version of the database protection proposal that was introduced in the U.S. Congress last spring. The NBA is looking at HR 3531 to see if it would provide a legislative remedy for their dispute with Motorola, et. al. (Like the other leagues, the NBA wasn't aware of the database treaty until last week.)

At present, none of the leagues currently prevent anyone from publishing statistics after a game is over, because it is assumed that the statistics (facts) are in the public domain, once the broadcasts are over. But this would likely change if the database treaty is enacted. One league official told me, "no matter how appalled I am at this proposal personally, as a civil libertarian, my client may have interests as a rightholder that it will want to exercise." A lawyer for the NFL said that the NFL might not want to do anything--he thought the free dissemination of statistics brought its own benefits, in terms of increased fan interest. But he also said, the treaty would allow the NFL to "do quite a bit of stuff," in terms of new licensing arrangements or other ventures, if it wanted to.

As a "sui generis" property right, the database proposal does not incorporate the fair use principles from copyright that reporters and value-added publishers often take for granted. The leagues would be able to require license to publish box scores or other statistics in any media. One can imagine a world where the leagues wouldn't require licensing of box scores to print based periodicals like daily newspapers, but that a much more controlled regimen would evolve on the Internet. The leagues could require licensing of box scores and other statistics for Internet publications, or linking to the leagues own web sites, such as www.nba.com, www.nfl.com, or www.nhl.com. The Internet is, after all, a very easy place to locate and police violations of intellectual property rights--through a simple AltaVista search. This would also likely lead to major changes in the market for baseball (and other sports) cards, which typically feature key statistics on the flip side of the card. The new database extraction rights would prohibit any unauthorized extraction or reuse of data that had economic value to the leagues (See discussion in Appendix).

PS

Of course, this treaty deals with a lot more than sports statistics. It will do the same thing for information on stock prices that is generated by a stock exchange. It will radically change the market for weather information. There is concern in Europe over the control of train schedules. Private Schools could use the new data extraction right to prevent unauthorized publication of data about its student's test scores or post graduate placement statistics (both generated from a database). The treaty would radically change the rights to use information from gene sequencing, or hospital cost-benefit studies. It will obviously do much much more.

Since I have tried to keep this note simple, a lot has been left out. But consider this: The treaty, which was designed to protect West Publishing's legal reporters, has been written so broadly that it will define even the daily newspaper as a "database" element. Since the new property right is additive to all rights claimed under copyright, every publisher will claim the additional protection, by saying each issue of the newspaper is a database element. (Virtually all newspapers today are archived in databases). The consequences of this are astounding, since every fact and article in every newspaper will have the new stronger form of protection, which will not include any public fair use rights.

You might ask your member of Congress what the heck is going on with the treaty, and see if they understand it.

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APPENDIX

Extracts from James Love, "A Primer On The Proposed WIPO Treaty On Database Extraction Rights That Will Be Considered In December 1996", October 29, 1996, (http://www.essential.org/cpt/ip/cpt- dbcom.html)

WHAT IS A DATABASE? WHAT ISN'T A DATABASE?

The treaty would protect "any database that represents a substantial investment in the collection, assembly, verification, organization or presentation of the contents of the database." This term should be understood "to include collections of literary, musical or audiovisual works or any other kind of works, or collections of other materials such as texts, sounds, images, numbers, facts, or data representing any other matter or substance" and "may contain collections of expressions of folklore." The "protection shall be granted to databases irrespective of the form or medium in which they are embodied. Protection extends to databases in both electronic and non- electronic form" and "embraces all forms or media now known or later developed. . . Protection shall be granted to databases regardless of whether they are made available to the public. This means that databases that are made generally available to the public, commercially or otherwise, as well as databases that remain within the exclusive possession and control of their developers enjoy protection on the same footing."

WHAT ARE EXTRACTION AND UTILIZATION RIGHTS?

"The maker of a database eligible for protection under this Treaty shall have the right to authorize or prohibit the extraction or utilization of its contents." What is "extraction"? Extraction is defined 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." "Extraction . . . is a synonym for `copying' or `reproduction' . . . by `any means' or `any form' that is now known or later developed."

"Utilization" is defined as "making available to the public all or a substantial part of the contents of a database by any means, including by the distribution of copies, by renting, or by on- line or other forms of transmission," including the right to control the use of the data "at a time individually chosen by each member of the public."

WHAT IS A "SUBSTANTIAL PART" OF THE DATABASE?

The treaty sets out tests for determining if an extraction is "substantial," and these tests are both highly anticompetitive, and extremely broad in scope.

The "substantiality" of a portion of the database is assessed against the "value of the database," and considers "qualitative and quantitative aspects," noting that "neither aspect is more important than the other . . . This assessment may also take into account the diminution in market value that may result from the use of the portion, including the added risk that the investment in the database will not be recoverable. It may even include an assessment of whether a new product using the portion could serve as a commercial substitute for the original, diminishing the market for the original."

Then the treaty adds that a "substantial part" means any portion of the database, "including an accumulation of small portions . . . In practice, repeated or systematic use of small portions of the contents of a database may have the same effect as extraction or utilization of a large, or substantial, part of the contents of the database."

In the U.S. implementing legislation, the only types of data use that would not be regulated would be "insubstantial" parts, "whose extraction, use or reuse does not diminish the value of the database, conflict with a normal exploitation of the database or adversely affect the actual or potential market for the database." Under this language, a database owner could say that it might in the future want to charge for each transmission of a fact or an element of a database as part of its "normal exploitation" of the database. With the Internet and digital cash this claim is likely to be made. The public would not have "fair use" rights, since fair use is only defined in matters involving copyright.

FOR HOW LONG? 15 YEARS, 25 YEARS, OR FOREVER?

The Treaty would require a minimum term of protection (15 years in the EU proposal, and 25 in the United States proposal) for the database. But this is extended each time the database is revised or enhanced. According to the draft treaty, "any substantial change to the database, evaluated qualitatively or quantitatively, including any substantial change resulting from the accumulation of successive additions, deletions, verifications, modifications in organization or presentation, or other alterations, which constitute a new substantial investment, shall qualify the database resulting from such investment for its own term of protection."

The provision on revisions raises the specter that protection for many databases will be perpetual. This could indeed be the case if the original versions of the database are only "licensed" by the vendor for a limited period of time, so that the only available versions would be the new ones, which would have a new term of protection. (Database vendors write these restricted use licenses now).
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First published in INFO-POLICY-NOTES
James Love is Director of the Consumer Project on Technology, one of Ralph Nader's pinko plots [just kidding], and can be reached at: 202/387-8030; love@tap.org

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