Board of Healthcare Funders v Discovery Health Medical Scheme and Others , Copyright Protection of Databases, Discovery SA, European Community Database Directive, Feist Publications Inc v Rural Telephone Services Co, Haupt t/a Softcopy v Brewers Marketing Intelligence (Pty) Ltd, idea expression dichotomy, non-original databases, original databases, Sweat of the Brow
In a recent decision by the South African High Court in Board of Healthcare Funders v Discovery Health Medical Scheme and Others , Discovery Health South Africa was found guilty of copyright infringement in respect of a database developed by the Board of Healthcare Funders (BHF) known as Practice Code Numbering System (PCNS). PCNS is a set of numbers or codes which identify all of the medical practitioners and medical service providers in RSA together with related data. As Darren of Afro-IP explains:
“The PCNS is a tool for facilitating payment under the medical aid schemes and assists in preventing fraud by, for example, verifying that a claimant is claiming an amount from the scheme within his or her scope of practice and discipline”
Prior to 2010, Discovery was a member of the BHF, and by virtue of this membership it received data from the BHF on a weekly basis. This information related to changes of medical practitioners and associated data. Discovery was accused of extracting substantial portions of this information from BHF’s PCN system and importing it into the relevant fields within its own database. Meanwhile, sometime in 2010, Discovery cancelled its BHF membership. Thereafter, BHF went to court claiming that Discovery was infringing BHF’s copyright because it was using the PCNS without a license, in addition BHF sought to have Discovery deliver up all the infringing material in its possession, and BHF also claimed royalty payments against Discovery. Discovery challenged BHF’s claim in court on five grounds which were all dismissed by the court. However, for purposes of the present discussion, the focus shall be on the first issue raised by Discovery namely that no copyright exists in respect of PCNS.
The court defines PCNS thus: ” a compilation in so far as it consists of the combination of a series of digits to form the PCN coupled with the data which then in its totality forms the PCNS”. It is therefore clear that PCNS is a database. A database is commonly defined as a collection of independent works, data or other materials arranged in a systematic or methodical way and individually accessible by electronic or other means. In terms of S1(1)(g) of South Africa’s Copyright Act, “literary work” includes: “tables and compilations including tables and compilations of data stored or embodied in a computer or a medium used in conjunction with a computer but shall not include a computer program”. Therefore PCNS may fall within the category of literary works and be protected along with other compilations, provided certain requirements are met.
There are two inherent requirements for copyright protection namely originality and material embodiment. The latter requirement means that the work must be reduced to material form in order to attract copyright. The former requirement namely originality requires that a work must emanate from the author himself and not be copied from another source. In South Africa, the test for originality is as follows: if an author has expended labour and skill in creating the work, it will enjoy copyright protection, notwithstanding the bland nature of the work . This test is based on the ‘sweat of the brow’ doctrine and was applied by South Africa’s Supreme Court of Appeal in the leading case of Haupt t/a Softcopy v Brewers Marketing Intelligence (Pty) Ltd . The court in this case made it clear that although originality requires that the work must originate from the author and not be copied from an existing source, this is not to say that every work which is not copied would qualify for protection in terms of the Act:
“Save where specifically provided otherwise, a work is considered to be original if it has not been copied from an existing source and if its production required a substantial (or not trivial) degree of skill, judgment or labour.”
At paragraph 30 of the Discovery Health judgment, the court cites with approval the reasoning in the Haupt case as adopted from the British case of Ladbroke (Football) Ltd v William Hill (Football) Ltd :
“In deciding therefore whether work in the nature of a compilation is original, it is wrong to start by considering individual parts of it apart from the whole as the appellants in the argument sought to do. For many compilations have nothing original in their parts, yet the sum total of the compilation may be original.”
The South African Courts’ decision to apply the sweat of the brow approach in interpreting the Copyright Act’s requirement of originality means that local database owners (like BHF) enjoy the copyright protection of both original and non-original databases. However it has been argued elsewhere that this advantageous position enjoyed by database owners should be weighed against the short-comings inherent in the sweat of the brow doctrine. The Feist Publications Inc v Rural Telephone Services Co  case, a seminal U.S copyright law decision, provides the strongest criticism of this doctrine. The court in Feist stated that:
The “sweat of the brow” doctrine had numerous flaws, the most glaring being that it extended copyright protection in a compilation beyond selection and arrangement — the compiler’s original contributions — to the facts themselves.
This criticism stems from the existence of a long-standing principle that copyright should not be extended to cover basic information or “raw” data. This well established principle is based on the idea that only the elements of a work that are original to the author will attract copyright. Therefore, in the case of facts, they are merely discovered but not created which means that no one may claim originality because facts do not owe their origin to an act of authorship. But in South Africa, under the sweat of the brow doctrine, the sheer industrious collection of facts is sufficient to attract copyright.
This central flaw in the sweat of the brow approach offers a glimpse of the serious consequences that South Africa could face. First and foremost, the very low threshold of originality ultimately discourages both large scale local and foreign investment in database creation. Also, given the growth in the protection of information all over the world, those South Africans that end up developing creative databases targeted for both local and international use will opt for jurisdictions that offer more comprehensive protection of their work. These negative economic consequences as a result of the sweat of the brow doctrine, call for a consideration of other approaches to database protection in existence in order to be able to determine which of these would be applicable in and suitable for South Africa. Nevertheless it is readily conceded that raising the standard of originality for databases will not necessarily encourage more investment in the database industry; such is the lesson from the European Community’s sui generis protection: the 1996 EC Database Directive.
This Discovery Health case provides important insight into the nature and scope of protection enjoyed by databases under South African copyright law. As noted, the sweat of the brow approach adopted by South Africa rewards the hard work of individuals involved in compiling of data without segregating between factual compilations and other more ‘creative’ literary works. However, it is argued that this low originality threshold for database protection is tantamount to providing copyright protection over raw facts/data themselves and distorting the long established idea/expression dichotomy. In this connection, it is possible that Discovery Health’s database would also be copyrightable and BHF may find itself back in court again only to discover the current copyright law regime works both ways!