DRSP Holdings Ltd & Anor v O'Connor & Anor

A database right subsists where there has been substantial investment in obtaining, verifying or presenting the database contents. Investment in ascertaining and recording pre-existing facts, collecting independently sourced material, verifying accuracy and developing bespoke database software may qualify. Extraction includes a permanent or temporary transfer of contents to another medium, including between electronic media, but lawful consultation carries an implied consent only to transfers necessary for that consultation. Whether extraction is authorised depends on the scope of the parties’ express or implied agreement. A commercially realistic construction of an informal agreement may be required where literal wording produces an unintended result.

DRSP Holdings Limited and DRSP Limited claimed that Thomas O’Connor and Octax Limited had infringed database right in DRSP’s Slate database, misused confidential information and breached fiduciary and contractual duties. The claim also included restitution of a payment made under an invoice. The defendants denied infringement and counterclaimed for fees under an Introducer Agreement.

The court decided whether database right subsisted, whether the alleged transfers and searches constituted unauthorised extraction, whether statutory protection applied, and how the Introducer Agreement should be construed.

1. Database right. Slate was a database within the statutory definition. There had been substantial investment in obtaining its contents by acquiring leads and identifying and recording existing facts concerning potential claims. There had also been substantial investment in verifying names, addresses, contact details and potential claims. The development of bespoke software and the Slate system constituted substantial investment in presenting the contents. Database right therefore subsisted.
2. Extraction. The statutory concept of extraction was broad. A transfer between electronic media could constitute extraction even where the material remained in the original database. Temporary transfer for on-screen consultation could be authorised by implication, but the alleged transfers, searches and reports were capable of amounting to extraction if unauthorised. Repeated and systematic extraction of insubstantial parts could also amount to extraction of a substantial part.
3. Consent and authority. The court rejected the sharp distinction advanced between Mr O’Connor’s consultancy role and his role for Octax. His continuing access to the DRSP consultancy account was authorised where its use reasonably served the joint interests of DRSP and Octax in implementing the Introducer Agreement. The evidence showed that DRSP managers, acting with Ms Taylor’s knowledge or within delegated authority, participated in searches and transfers. None of the alleged acts of infringement was therefore proved to be unauthorised.
4. Statutory defence. Alternatively, the innocent-infringement defence would have been unavailable. Mr O’Connor’s detailed knowledge of Slate and his involvement in its development meant that he knew, or had reason to believe, that database right subsisted.
5. The claims for misuse of confidential information, breach of fiduciary duty and breach of the Consultancy Agreement stood or fell with the issue of consent and authority. It was unnecessary to decide them separately.
6. Contractual counterclaim. Applying the principles in Wood v Capita Insurance Services Ltd [2017] UKSC 24, the Introducer Agreement covered two work streams: new leads introduced by Octax and existing leads referred by DRSP to Octax for reheating and referral back. Clause 3.3 and Schedule 1 entitled Octax to 50% of fees actually received by DRSP in respect of the latter work. Clause 5.1 was construed as addressing competing introductions and not referrals back under clause 3.6.1.
7. DRSP was not entitled to deduct its own costs and expenses before calculating the 50% fee. DRSP breached the Introducer Agreement by refusing to perform it between 1 September and 1 October 2018. The claim was dismissed. Octax was entitled to an account and an inquiry as to damages.