ECJ for sale of “used” e-books

By today’s judgment, the Court of Justice has held that the release of an e-book for permanent use to the public by downloading falls within the concept of ‘communication to the public’ within the meaning of Directive 2001/291.

What is it all about?

Nederlands Uitgeversverbond (NUV) and Groep Algemene Uitgevers (GAU), two associations whose aim is to represent the interests of Dutch publishers, brought an action before the Rechtbank Den Haag (Court of The Hague, Netherlands) and, inter alia, requested that the Company Tom Kabinet to prohibit members of the “reading club” he founded from making e-books available on his website or to reproduce these books.

NUV and GAU claim that these activities infringe the copyrights of their members in those e-books. By offering “used” e-books for sale in the context of this reading club, Tom Kabinet makes an unauthorised public representation of those books.

Tom Kabinet, on the other hand, submits that those activities are subject to the distribution right which is subject to a rule of exhaustion in that directive where the subject-matter in question, in the present case the e-books, is applied by the rightholder or by his consent were sold in the Union. That rule would mean that, following the sale of the e-books in question, NUV and GAU would no longer have the exclusive right to allow or prohibit their distribution to the public.

The ECJ sees it differently

The Court has held that the provision of an e-book for permanent use by downloading does not cover the right of ‘distribution to the public’ within the meaning of Article 4(4) of the Treaty. 1 of Directive 2001/29, but rather under that of Article 3(3) of the 1 of that directive, the right of ‘communication to the public’ falls, for which exhaustion is required under Article 3(3) of the Directive. 3 is excluded.

The Court based that finding, in particular, on the fact that it inferred from the copyright law of the World Intellectual Property Organisation (WIPO), which was the basis of that directive, and the preparatory work for that directive, that the The EU legislature intended to reserve the exhaustion rule of the distribution of physical objects, such as books on a material carrier.

On the other hand, the application of the exhaustion rule to e-books could have a far greater impact on the interests of rightholders in obtaining an appropriate remuneration for their works than in the case of books on a material medium, since the non-physical digital copies of e-books do not deteriorate through use, and thus represent a perfect replacement for new copies in a possible second-hand market.

As far as the concept of ‘communication to the public’ is to be understood, the Court states in more detail that it must be understood in a broad sense, namely that it includes any communication to the public which does not take place at the place where the communication originates. and thus includes any appropriate wired or wireless public transmission or redistribution of a work. That concept combines two cumulative elements, namely an act of reproduction of a work and its communication to the public.

As regards the first feature, it is clear from the explanatory memorandum to the proposal for Directive 2001/29 that:

“the critical act is the making available of the work to the public, i.e. the offering of a work in a publicly accessible place, which precedes the stage of its actual ‘transmission on demand’

”
, and that it is

‘It is irrelevant whether a person has actually retrieved it or not’.

Therefore, in the Court’s view, making the works in question available to any person registering on the Reading Club’s website must be regarded as a ‘reproduction’ of a work, without it being necessary for the person concerned to have that by actually retrieving the e-book from this website.

As far as the second feature is concerned, account must be taken not only of how many persons can have access to the same work at the same time, but also of how many of them can have access to the work one after the other. In the present case, the Court considers that the number of persons who may have parallel or successive access to the same work via the reading club’s platform is significant. Thus, subject to an investigation by the referring court, the work in question must be regarded as reproduced in public, taking into account all the relevant circumstances.

Moreover, the Court has held that, in order to be classified as a communication to the public, it is necessary for a protected work to be classified using a technical procedure which differs from the ones previously used, or otherwise for a new it is reproduced to the public, i.e. to an audience which the copyright holders had not already thought of when they allowed the original communication to the public. Since, in the present case, the making available of an e-book is generally a licence to use the e-book, which only permits the reading of the e-book by the user who downloaded the e-book in question with his own device, it must be assumed that a Reproduction, as carried out by the company Tom Kabinet, is made for an audience that the copyright holders had not already thought of, i.e. for a new audience.

Conclusion

The ruling is likely to be highly relevant for many similar suppliers who want to resell or offer digital products.

Author: Marian Härtel

Marian Härtel ist Rechtsanwalt und Fachanwalt für IT-Recht mit einer über 25-jährigen Erfahrung als Unternehmer und Berater in den Bereichen Games, E-Sport, Blockchain, SaaS und Künstliche Intelligenz. Seine Beratungsschwerpunkte umfassen neben dem IT-Recht insbesondere das Urheberrecht, Medienrecht sowie Wettbewerbsrecht. Er betreut schwerpunktmäßig Start-ups, Agenturen und Influencer, die er in strategischen Fragen, komplexen Vertragsangelegenheiten sowie bei Investitionsprojekten begleitet. Dabei zeichnet sich seine Beratung durch einen interdisziplinären Ansatz aus, der juristische Expertise und langjährige unternehmerische Erfahrung miteinander verbindet. Ziel seiner Tätigkeit ist stets, Mandanten praxisorientierte Lösungen anzubieten und rechtlich fundierte Unterstützung bei der Umsetzung innovativer Geschäftsmodelle zu gewährleisten.