The European Court of Justice (ECJ) has ruled that the supply to the public by the downloading, for permanent use, of an e-book was covered by the concept of communication to the public.
Article 3(1) of the Copyright Directive (2001/29/EC) (the Directive) (Article 3(1)) gives authors the exclusive right to authorise or prohibit any communication to the public of their works, including the making available to the public of their works in such a way that members of the public may access them from a place and at a time individually chosen by them.
Authors have the exclusive right to authorise or prohibit any form of distribution of the original or copies of their works to the public by sale or otherwise (the distribution right) (Article 4(1), the Directive) (Article 4(1)). The distribution right in the EU may be exhausted, but only if the first sale or other transfer of ownership in the EU is made by the copyright owner or with their consent (the exhaustion principle) (Article 4(2)).
It is unclear whether Article 4 applies to the issue of electronic copyright works, for example, where electronic copies are issued to the public by being made available over the internet.
Associations acting on behalf of Dutch publishers (N), applied for an injunction stopping T from making e-books available to members of a reading club on its website or from reproducing the books.
N claimed that T’s activities infringed their members’ copyright in the e-books. N argued that, by offering second-hand e-books for sale in the context of the club, T was making an unauthorised communication of those books to the public contrary to Article 3(1).
T argued that the activities were covered by the exhaustion principle so, following the sale of the e-books, N would no longer have the exclusive right to authorise or prohibit the distribution of the e-books to the public.
The District Court of The Hague in the Netherlands referred the question of exhaustion of rights to the ECJ.
The ECJ ruled that the supply to the public by the downloading, for permanent use, of an e-book was covered by the concept of communication to the public within the meaning of the Directive, specifically by the concept of the making available to the public of authors’ works in such a way that members of the public might access them from a place and at a time individually chosen by them under Article 3(1).
The Directive was drafted in order to deal with the distribution of tangible objects, such as printed books. However, the application of the exhaustion principle to e-books would be likely to affect the interests of rights holders more than in the case of printed books, as dematerialised digital copies of e-books did not deteriorate with use and so were perfect substitutes for new copies on any second-hand market.
The concept of communication to the public should be understood in a broad sense covering all communication to the public not present at the place where the communication originated and therefore any transmission or retransmission of a work to the public by wire or wireless means. The concept involves two cumulative criteria: an act of communication of a work; and the communication of the work to a public.
The critical act was the making available of the work to the public by the offering of a work on a publicly accessible site, which preceded the stage of its actual on-demand transmission: it was irrelevant whether any person actually retrieved it or not. Therefore, the making available of the works concerned to anyone who was registered with the reading club’s website must be considered a communication of a work, irrespective of whether the person concerned availed themselves of the opportunity by retrieving the e-book from the website.
Account should be taken not only of the number of persons able to access the work at the same time, but also of how many of them might access it in succession. Here, the number of persons who might have access, at the same time or in succession, to the same work via the reading club’s platform was substantial. Consequently, the work was being communicated to a public.
Finally, to be categorised as a communication to the public, a protected work must be communicated using specific technical means, different from those previously used or, failing that, to a new public, that is, to a public that was not already taken into account by the rights holders when they authorised the initial communication of their work to the public. Here, as the making available of an e-book was generally accompanied by a user licence authorising the user who had downloaded the e-book only to read that e-book from their own equipment, the communication was made to a public that was not already taken into account by the rights holders and, therefore, to a new public.
The effect of this decision is that the exhaustion principle does not apply to the supply of e-books by downloading online for permanent use. Therefore, rights holders can, in principle, stop the reselling of their e-books that have been supplied in this way.
The decision demonstrates the court’s willingness to adapt and supplement the law on copyright and related rights in response to technological developments which have created new ways of exploiting protected works, and to ensure that rights holders obtain an appropriate reward for the use of their works.
Case: Nederlands Uitgeversverbond and Groep Algemene Uitgevers v Tom Kabinet Internet BV and others C 263/18.
First published in the January/February issue of PLC Magazine and reproduced with the kind permission of the publishers. Subscription enquiries 020 7202 1200.