Databases can be extremely valuable to companies. They might include various facts, figures, prices, and customer information, sometimes maintained in large spreadsheets. Copyright protection for databases is limited, however.
Some databases do not qualify for any protection at all. As a result, the owners of valuable databases often use other ways to protect their creations. These means are used not only to protect the selection and arrangement of the data (which would be a copyright-style approach to the protection of visual art), but rather the data itself.
A database license is a contract restricting what a person can do with the data. These licenses are commonly used to protect databases that are not made freely available to the public. People who use the database must agree in advance to the terms of the license.
Database licenses can take many forms. Some are form contracts, while others are negotiated agreements tailored to particular individuals or institutions. They may appear in traditional print form, under the shrinkwrapping of a DVD, on a computer screen as part of software, online, or in a combination of these formats.
The terms of database licenses also vary, but they generally restrict or limit how the database can be used. For example, an online license typically dictates when the database can be downloaded or disseminated to others. These restrictions put limits on a user’s ability to use the contents of the database beyond what copyright law allows.
Licenses also usually establish enforcement procedures and remedies should the licensee violate the terms of the license. Such terms can include terminating a subscriber’s access, suspending services, or suing the subscriber for damages. For example, imagine that a seller of widgets licenses its customer database to a nonprofit seeking to fundraise. The terms of the database license might require the nonprofit to use only customer emails during a narrow period for a specific reason. Any use of the customer data beyond that would violate the terms of the license.
Databases receive extremely limited copyright protection or, in many cases, none at all. For this reason, database owners often use state trade secret laws to protect their works. Trade secrets are any formula, pattern, device, or compilation of information that is used in business, not generally known to the public, and gives the owner an opportunity to obtain an advantage over competitors who do not know it.
For example, electronic databases that are maintained by companies on their internal—that is, nonpublic—computer networks are usually protected as trade secrets.
This form of legal protection may be used to supplement copyright protection. If the database cannot be protected by copyright, it may be the owner’s main line of defense.
Not everything can be a trade secret. The database owner must take reasonable steps to keep the data in the database secret—for example, carefully restrict access by keeping it in a password-protected computer system. Databases that are published or otherwise made available to the public cannot be protected as trade secrets; nor can databases that contain information that is generally known in the industry involved. Data that everybody knows cannot provide anyone with a competitive advantage. However, the information in a database need not be novel or unique to qualify as a trade secret. All that is required is that the information not be generally known by people who could profit from its disclosure and use.
Another form of protection for electronic databases is encryption—that is, encoding the data in an unreadable form that can be “unlocked” and read only with the proper key. This is not a legal protection, but it makes it difficult or impossible to obtain access to a database.
The government has been encrypting its sensitive data for years. Powerful encryption technologies for databases are now commercially available. Moreover, relatively recent changes to the copyright laws make it illegal, in most cases, for anyone to obtain access to a database or other work by circumventing technological measures such as encryption. Thus, encryption software might be able to protect your confidential databases more efficiently than legal principles.