An Economic Analysis of the Contractual Protection of Databases

Abstract

This article deals with the contractual protection of databases which are publicly made available by their producers. The article reviews this issue in the European Union and the United States. It is useful to analyse database protection in this manner, especially in the United States where the primary form of legal protection is contractual. The article first concentrates on the issue in the European Union and then extrapolates the reasoning to the situation in the United States. The article attempts to answer two questions. First, it is concerned with the question whether a database producer can, and if so should, get additional protection for his sui generis right-protected database by contract. In other words, the question is whether he can and if so, should be allowed to override the limits of the sui generis right by contract (section 3.1). Second, it is concerned with the question whether a database not protected by the sui generis right, either because it was protected but is now fallen in the public domain or because it does not meet the requirements to be protected by the sui generis right can and if so, should, be protectable by contract (section 3.2). Similar questions arise in the United States (section 4). Although the United States does not have a specific intellectual property right protecting databases, the economic rationale behind protecting databases contractually is the same. The central question underlying these two questions is whether such use of contracts is over-protective of databases. To determine this, an economic analysis is followed (section 2). Over-protection is protection over and above what is efficient economically. This means that over-protection reduces social welfare. Where necessary, the human rights to information and to privacy are also taken into consideration. Before analysing database protection from an economic point of view, a brief overview of the protection of database contents in Europe and the United States is given (section 1).