March 5, 2004

Extraction of Public Domain Data From Proprietary Database Is Not Infringement

Holland & Knight Newsletter

In a case that emphasizes the difficulty of protecting proprietary databases, the U.S. Court of Appeals for the Seventh Circuit decided in Assessment Technologies of WI, Inc. v. WIREdata, Inc. that the extraction of public domain information from a computer database software program that is protected by copyright is not itself copyright infringement.

WIREdata, owned by Multiple Listing Services, Inc., wanted to obtain property data – address, owner’s name, the age of the property, its assessed valuation, the number and type of rooms, etc. – from the southeastern Wisconsin municipalities where the properties were located. The municipalities collected the data to assess the properties for tax purposes.

Ordinarily the municipalities were happy to provide the data to anyone who paid the modest cost of copying the data onto a disk. Three municipalities refused WIREdata’s request, however. The municipalities, or the contractors who do the actual tax assessment for them, were licensees of Assessment Technologies (AT), which had developed and registered a copyright in a computer program called “Market Drive” that the municipalities or their assessors used to store and access the real estate data at issue.

WIREdata was not seeking to obtain the Market Drive software program itself, but rather the data that was stored by it. This data was not collected by AT, but by the tax assessors hired by the municipalities. The assessors visited the properties and obtained information by talking to the owner and looking at the property. The assessors entered this data into a computer, and then the Market Drive program, in conjunction with a Microsoft Access database program, automatically allocated the data into 456 fields (that is, categories of information) grouped into 34 master categories known as tables. The structure of the data was fairly sophisticated: several types of data related to a property, each allocated to a different field, were grouped together in a table called “Income Valuations;” other data was grouped in a table called “Residential Buildings;” and so on. The municipalities stored the data in an electronic file and their tax officials would then use various queries in Market Drive or Market Access to view the data in the file.

WIREdata brought suit in state court to force these municipalities to release the data to them. AT, in turn, filed its own suit in federal court to enjoin the release of the data and to enforce its copyright. AT claimed that the requested data could not be extracted without infringing the copyright in its software via copying its data structure. A federal district court ruled in favor of AT and granted it a permanent injunction. On appeal, the U.S. Court of Appeals for the Seventh Circuit reversed, holding that the release of the data would not infringe AT’s copyright.

The appeals court first rejected WIREdata’s argument that AT’s software was not sufficiently original to be copyrightable. Under the Copyright Act, a work need only have minimal originality, enough to distinguish the work from similar works that are in the public domain, since without such a distinction, it would be impossible to determine whether a later work was copied from the copyrighted work or from a public-domain work. The court ruled that Market Drive met this modest requirement because no other real estate assessment program arranged the data collected by the assessor in the 456 fields grouped into 34 categories, and because this data structure was not obvious or inevitable – as it might have been if the data were simply compiled in alphabetical or numerical order.

The court then decided that extracting the data from the database would not infringe the Market Drive program. The court emphasized that the data at issue constituted simply “facts” that were in the public domain and not protected by copyright. The court held that the extraction of this data would not create a derivative work, but would involve only the copying of uncopyrighted information.

AT also argued that WIREdata did not need to obtain the data in digital form because it existed in analog form by means of the handwritten notes of the assessors. The parties had agreed these notes were not covered by the Market Drive copyright. The court found that WIREdata could not obtain the information it needed because some assessors no longer made handwritten notes to copy into a computer at a later time, but instead took their laptop to the site to input the information directly into the program. More fundamentally, the court ruled that AT had no ownership or other legal interest in the data collected by the assessor, and therefore, had no legal basis for making the acquisition of that data more costly for WIREdata. In the court’s view, AT was trying to use its copyright to sequester uncopyrightable data, presumably in the hope of extracting a license fee from WIREdata.

The court’s decision highlights yet again the difficulty of using copyright law to protect proprietary databases. There are at least three bills currently pending in Congress that are intended to establish legal protections for databases, but past proposals have failed to pass because of controversy over the scope of protection. In the meantime, publishers of proprietary databases must continue to take care to craft license restrictions that will protect their investments.

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