The Explanatory Note to Contract 25 highlights the reasons why a data owner/supplier would prefer to license, rather than sell, data in order to protect its copyright interests in and control use of the data. A data purchaser on the other hand, would prefer to buy data outright if at all possible, especially where data is its main asset and distributing data its main business activity.
In Contract 26, the database owner is purchasing data for the purposes of creating and refreshing a database which is subscribed to by end-users. The database owner may either provide the data to end-users in the form in which it is supplied (i.e. “raw” data) or as part of a larger “added value” service to its end-user subscriber customers, the latter being the example in this Contract.
The data can be supplied by the data supplier to the database owner in any number of ways: transmitted, downloaded, access providedor any other form of communication. Whatever the mode of delivery the importance rests in its completeness, accuracy and reliability. If the data does not arrive, is delayed, is incomplete or is inaccurate, potentially every subscriber to the database can be affected. Accordingly it is prudent for the database owner not only to have effective support services from the data supplier specifying response times and priority levels for “fixes” but also to have a liquidated damages clause covering non-delivery, lateness of delivery and stringent liability provisions for inaccuracy of data.
In addition to the quality and timely delivery of data, the next most important factor for a database owner is consistency, especially if the database owner is using the data within added value services. For example, if the database owner has had a specific software program written to receive the data, to reformat it into a particular layout (e.g. creating graphs or charts from numeric data) and then to “locate” it into a particular part of the database which provides a specific service to, perhaps, a specific sector of subscribers who are only able to access that particular part of the database, then any change the data supplier may make to the method of delivery (e.g. transmission/download/data feed which cannot be read by the software program) or to the format (e.g. instead of being supplied with a particular numerical layout, the data is supplied in graphic format), may well require the database owner to adapt any software used in its processing. This will result, not only in additional expense to the database owner, but also delay in the availability of that data and indeed, the service in which it is to be incorporated to subscribers. Therefore any changes which the data supplier is proposing to make must be notified in good time to the database owner to allow the database owner to modify or adapt its software or method of processing the data.
Where the database owner obtains data from many sources whether by purchase or license, it is important to protect its database rights in the selection and arrangement of the database as a compilation (see Commentary for database rights). Also, if the database owner re-works, re-formats or otherwise modifies the original source data into a new dataset, for example, where the average is taken between two sources of financial data) then the resultant new value can be the copyright of the database owner (if original). Thus, the database owner can own copyright as well as database rights.
Each subscriber to the database should also be made aware of the proprietary nature of the information being accessed, therefore, similar copyright and database provisions should also be included in the end-user/subscriber agreement. (See Contract 27) and in the data itself (see Contract 50).