Opinion of the Advocate General — ECLI:EU:C:2018:796
Date: 2018-10-03
Language of the case: Swedish
Subject matter: Right of establishment;Intellectual, industrial and commercial property;Approximation of laws;Freedom to provide services
Procedure: Reference for a preliminary ruling
Origin: Sweden

Summary of the arguments of the parties 24. According to the Public Prosecutor, who confirms his position expressed before the referring court, the consequences that an overly narrow interpretation of the distribution right could have on the application of Directive 2004/48/EC should be taken into account. (9) He asserts that the procedural measures and penalties provided for in that directive presuppose that an infringement has been committed or will be imminently committed. 25. The Public Prosecutor considers that, when a trader stores goods bearing copyright-protected motifs on his premises, he is attempting to obtain an economic or commercial advantage. (10) The offer of goods in a shop is intended to encourage consumers also to purchase those identical goods stored in the warehouse. According to the Public Prosecutor, any other interpretation would be irreconcilable with the principles of Dimensione Direct Sales and would not ensure a high level of effective and rigorous protection. (11) 26. He therefore suggests that the answer to the questions referred should be that the goods at issue infringe the author’s exclusive distribution right, laid down in Article 4(1) of Directive 2001/29, it being irrelevant whether the goods are stored in premises adjacent to the shop or in other more distant premises. 27. The Commission proposes to turn first in the analysis of the questions to Dimensione Direct Sales, specifically to the principles that give copyright holders the right to prohibit any form of distribution of goods bearing their work, as well as the concept of distribution as an autonomous concept under EU law. (12) According to that judgment, this concept can cover both a contract of sale and delivery of the article purchased to the customer, as well as other operations prior to the contract, (13) including advertising measures. (14) 28. It follows from those principles that goods stored in premises other than the shop infringe the rightholder’s distribution right if it is proven that they are being offered for sale or advertised to consumers. However, this conclusion does not really answer the questions of the referring court, as its query is whether stored goods can be assimilated to those actually offered for sale in the shop, regardless of whether they are sold or advertised. 29. The Commission does not consider that such assimilation is possible, as this would involve adopting an a priori position with regard to the commercial purpose of stored goods solely on account of the fact that other similar goods have been sold to the public. Consequently, the intention of the person concerned with regard to the goods, from the commercial point of view, should be examined. 30. In this respect, the Commission proposes a number of criteria for determining the commercial purpose of the goods: (a) the identity of the goods with others that are protected by copyright and displayed for sale in the shop; (b) a physical, financial or administrative link between the warehouse and the shop; and (c) the regular supply of the shop with goods from the warehouse. IV. Analysis A. Preliminary observation 31. The questions referred have arisen in criminal proceedings against Mr Syed, which requires me to make a preliminary clarification. The Swedish legislature has chosen to criminalise the infringement of copyright over a literary or artistic work, through Paragraph 53 of the Law on copyright, by referring to other provisions of the same Law. Express reference is not made, at least in its wording, to Directive 2001/29. 32. The EU legislature has not used, in this respect, the possibility of defining criminal offences or of approximating or harmonising the criminal laws of the Member States (Article 83(1) and (2) TFEU). In the absence of such legislation, the Court of Justice can provide the referring court with an appropriate interpretation of Directive 2001/29, but cannot intervene in the dispute with regard to the criminal aspects of the law of one of those Member States, since, I repeat, there is no harmonising legislation in this respect. 33. Directive 2004/48 lays down only ‘civil and administrative measures, procedures and remedies’ (Article 16) to protect intellectual property rights. Although it states that ‘criminal sanctions also constitute, in appropriate cases, a means of ensuring the enforcement of intellectual property rights’, (15) such sanctions are not included within its scope. Moreover, Article 2(3)(c) states that ‘this Directive shall not affect … any national provisions in Member States relating to criminal procedures or penalties in respect of infringement of intellectual property rights’. 34. Mr Syed has expressed his fear before the referring court that, as a result of using civil law instead of criminal law to define the criminal offence, the Court of Justice will interpret the concept of ‘distribution’ too loosely, by including goods stored but not yet sold, contrary to the principle that criminal offences should be clearly and precisely defined. 35. I do not believe that this argument is tenable. The Court of Justice has to interpret Article 4(1) of Directive 2001/29 regardless of the consequences that may be determined by the referring court from the point of view of Swedish criminal law. (16) That interpretation is limited to examining the scope of protection of the author’s right to authorise or prohibit the distribution of his works. If, in accordance with Swedish law, it is sufficient for that right to have been infringed in order to incur criminal liability, that is something that does not depend on Directive 2001/29 or its interpretation by the Court of Justice. 36. Mr Syed’s observation actually stems from a criticism of how the criminal offence laid down by Paragraph 53 of the Law on copyright is defined. This criticism censures a possible infringement of the principles of legality and legal certainty, as the provision allegedly does not respect the requirement that offences and penalties should be previously prescribed by law. 37. Such an argument is, I repeat, outside the scope of these proceedings, for which reason it must not be taken into account. The Court of Justice will have to confine itself, within the preliminary ruling dialogue maintained with national courts, to providing the referring court with an interpretation of the distribution right under Article 4(1) of Directive 2001/29. B. Questions referred 38. It is evident from the account set out in the order for reference that Mr Syed works with goods bearing reproductions of works protected by copyright, without authorisation from their rightholders. In order to better understand the specific facts behind the questions of the referring court, it must be clarified that: – some of the pirated goods were offered for sale in the shop of Mr Syed, who has been convicted of this act at both first and second instance, with regard to which the appeal court has no doubts; – other such goods (namely 599 items of clothing identical to those displayed in the shop) were found in Mr Syed’s warehouses; – the rest of the pirated goods were also found in the warehouses, but were not offered for sale and were not identical to the clothing displayed in the shop. 39. Therefore, the referring court is asking whether the distribution right extends to the second category of articles, namely those which bear the same ‘protected motifs’ as those sold in the shop but which are stored on other premises. It also wishes to know whether the greater or lesser proximity of the warehouses (one adjacent to the shop and the other located in a suburb to the south of Stockholm) has any bearing on the answer. 40. The referring court’s questions are best understood by referring to the case-law of the Court of Justice to date, which I will summarise below. 41. The Peek & Cloppenburg (17) judgment determined whether the distribution right in Article 4(1) of Directive 2001/29 was infringed when a chain of clothing shops placed, in a rest area for customers of one of its shops and in the window of another shop, armchairs and sofas designed by Charles-Édouard Jeanneret (Le Corbusier) and protected by copyright, but manufactured without the consent of their rightholder (an undertaking engaged in the production of upholstered furniture). 42. The Court of Justice replied, in essence, that ‘only acts which entail a transfer of the ownership of that object’ fall within the concept of distribution to the public of the original of a work or a copy thereof otherwise than through sale, within the meaning of the provision at issue. (18) 43. However, in two subsequent judgements, it broadened the concept of distribution by including acts that go beyond mere acts of transferring ownership. 44. Accordingly, in Donner, (19) a question was asked with regard to the behaviour of a carrier who acted as an accomplice in the unauthorised distribution of reproductions of furniture protected by copyright, which an Italian company supplied to its customers in Germany. (20) 45. On the basis that distribution to the public is characterised by ‘a series of acts going, at the very least, from the conclusion of a contract of sale to the performance thereof by delivery to a member of the public’, the Court of Justice held that a trader ‘in such circumstances bears responsibility for any act carried out by him or on his behalf giving rise to a “distribution to the public” in a Member State where the goods distributed are protected by copyright. Any such act carried out by a third party may also be attributed to him, where he specifically targeted the public of the State of destination and must have been aware of the actions of that third party’. (21) 46. In Dimensione Direct Sales, it was debated ‘whether Article 4(1) of Directive 2001/29 must be interpreted as meaning that it allows a holder of an exclusive right to distribute a protected work to prevent an offer for sale or an advertisement of the original or a copy of that work, even if it is not established that that offer or advertisement gave rise to the purchase of the protected object by an EU buyer’. (22) 47. Based on previous case-law, the Court of Justice accepted that the copyright holder was entitled to object to the seller’s advertising (which offered counterfeit items on its website, in newspapers and magazines, as well as in an advertising brochure). It stated in particular that: – ‘as regards an invitation to submit an offer, or a non-binding advertisement for a protected object, those also fall under the series of acts taken with the objective of making a sale of that object’; (23) – ‘it is irrelevant, for a finding of an infringement of the distribution right, that such advertising is not followed by the transfer of ownership of the protected work or a copy thereof to the purchaser’. (24) 48. Consequently, the Court of Justice rejected the argument that an act subsequent to the advertising, involving the transfer of ownership of the protected work or a copy thereof to the purchaser, was necessary in order to find that the distribution right had been infringed. 49. It follows from this case-law that the Court of Justice has expanded the concept of distribution contained in Article 4(1) of Directive 2001/29. It has evolved from the mere act of transferring ownership to include acts preparatory to the sale of the object, such as the trader’s offer (directly or via its website) or other acts for the purpose of making such a sale, including transport of the goods by a third party. 50. Of course, the solutions provided by the Court of Justice (25) are to be viewed in the context of those cases, which must also occur here. It only remains to determine whether the storage of clothing in warehouses, where this is identical to the clothing displayed for sale in the shop, forms part of the series of acts aimed at its marketing. 51. In order to determine the scope of the author’s exclusive right to prohibit any form of distribution to the public within the meaning of Article 4(1) of Directive 2001/29, it may be useful to refer to the economic background of the concept of ‘distribution’ of a product. In commercial practice, this is defined as all actions, processes and relationships by which a product is taken from its manufacture to its final use, either in a further production stage or by delivery to the final consumer. (26) 52. It is doubtful, however, that, from the legal perspective that is relevant in this case, the exclusive right to authorise or prohibit distribution referred to in Directive 2001/29 has such a wide scope. Contrary to the view that even the first transfer (from the producer to a wholesaler) falls within the scope of that right, it may be that this prerogative of the copyright holder only applies to the transaction between the retailer and the final consumer. (27) 53. In the light of international agreements concluded by the Union, (28) the Court of Justice has opted for the second view, interpreting the term ‘distribution to the public by sale’ in Article 4(1) of Directive 2001/29 as a synonym for the ‘making available to the public … through sale’ contained in Article 6(1) of the CT. As a result, ‘public’ is taken to mean the consumer or end user, but not the intermediaries in the distribution chain, in particular wholesalers, despite the fact that the CT does not define the term ‘public’, which leaves the legislature or courts of the Contracting Parties to clarify this term. (29) 54. It is not disputed that Mr Syed is a retailer selling to final consumers. He therefore operates in the final segment of the distribution chain to which the author’s right to authorise or prohibit the distribution of his protected works applies. On that basis, the scope of that right must be examined where goods identical to those displayed for sale in the shop are stored in the seller’s warehouses. 55. I have already indicated that the case-law includes, among distribution acts, ‘at the very least’ the contract of sale and delivery of the purchased good to the purchaser, (30) as well as the offer for sale and non-binding advertising. (31) I also believe that the offer for sale is not limited solely to goods displayed in a given commercial establishment, but also applies to those that, where identical, are temporarily stored in a warehouse of the seller, in readiness to replace those that are sold. 56. Goods are displayed inside the shop or in its window with the aim of selling the highest possible number of articles, which can of course be presumed for any trader. Clothing (in this case, T-shirts with rock music motifs) that is situated inside the shop represents pars pro toto the rest of the stock. They have a direct link with each other, which is none other than the act leading to their sale. 57. I consider, therefore, that the right to object to the distribution of articles bearing reproductions that infringe copyright extends not only to those items that are already in the shop, but also to those that, where they bear the same reproductions, are stored in the seller’s warehouses, pending their transfer to the shop. 58. This interpretation is consistent with the minimum protection enshrined in Article 6(1) of the CT, which includes preparatory acts for sale, (32) as well as with the aim of Directive 2001/29 of providing a high level of protection of intellectual property rights, as stated in recital 9 thereof. 59. In addition, this guarantees the practical effect of the provision, which seeks to prevent the marketing of goods manufactured in breach of copyright, which therefore makes the right to control distribution of the work or copies thereof preventive in nature. If this control could only be exercised once the sale was made, with the exercise of the distribution right being focused on each individual transaction (this seems to be Mr Syed’s position), this would in fact prevent its effective protection, given the difficulties in ascertaining the place and time where and when the articles were sold, particularly those in storage. 60. Although I agree with the Commission that, in this case, the intention to sell can be inferred from some products being offered in the shop and other similar products being located, in turn, in the warehouses, I do not consider it essential to generalise a test such as the one recommended, which is overly rigid. In particular, an assessment of the link (physical, financial or administrative) between shop and warehouse could be too formalistic, in addition to shedding little light on how this could be proven. 61. I also believe that, given the close link between the clothing that Mr Syed sold in the shop and the clothing that he stored in the warehouses, combined with his status as a trader, storage formed part of the series of acts leading to the sale. In summary, the right to prohibit or authorise distribution should be extended to those products, as a right inherent in the copyright. 62. In that context, the remoteness or proximity of the warehouses is irrelevant. If the size or colour requested by a customer is not available in the warehouse adjacent to the shop, there is nothing to prevent Mr Syed from undertaking to transfer the item, in a relatively short time, from the warehouse situated in the Bandhagen district (and in fact this is entirely logical and makes common sense). Such acts would still fall within the series of acts taken with the aim of selling that item. 63. Lastly, returning to the criminal context of the dispute before the Swedish courts, I must reiterate that the answer suggested in this case is provided within the strict context of the interpretation of Directive 2001/29. It is therefore the exclusive responsibility of those courts, based on the way in which their national law defines their criminal offences and the various stages of the iter criminis (intention; preparatory acts; acts of performance; attempt and consummation) to decide whether or not a crime has been committed and to what degree its perpetrator may be held liable. V. Conclusion 64. In the light of the foregoing, I propose to the Court of Justice that the answer to the questions referred by the Högsta domstolen (Supreme Court, Sweden) should be as follows: Article 4(1) of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society must be interpreted as meaning that the exclusive right to authorise or prohibit any form of distribution to the public of the original of works or of copies thereof, which that provision covers, applies to goods that are stored in the warehouses of a trader, which incorporate protected motifs identical to those borne by the goods offered for sale by the trader in a shop that he owns. For this purpose, the distance between the warehouses and the shop is irrelevant. 1 Original language: Spanish. 2 Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society (OJ 2001 L 167, p. 10). 3 OJ 2000 L 89, p. 6. 4 The laws of the Member States on intellectual property were harmonised in the main through Council Directive 93/98/EEC of 29 October 1993 harmonising the term of protection of copyright and certain related rights (OJ 1993 L 290, p. 9), which was subsequently amended and then repealed by Directive 2006/116/EC of the European Parliament and of the Council of 12 December 2006 (OJ 2006 L 372, p. 12), which codifies the earlier versions. The aim of one of those amendments was to regulate the protection of copyright and related rights in the ‘information society’, through Directive 2001/29. 5 Swedish Law (1960:729) on copyright in literary and artistic works (‘the Law on copyright’), which transposed Directive 2001/29 into Swedish law. 6 The infringement of trade mark rights is not at issue in this request for a preliminary ruling. 7 The referring court refers to Paragraph 10 of Chapter 1 of the Varumärkeslagen (2010:1877) (Swedish Law (2010:1877) on trade marks) and to Article 9(3)(b) of Council Regulation (EC) No 207/2009 of 26 February 2009 on the Community trade mark (OJ 2009 L 78, p. 1), since replaced by Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union trade mark (OJ 2017 L 154, p. 1). 8 Judgment of 13 May 2015, Dimensione Direct Sales and Labianca (C‑516/13, EU:C:2015:315, ‘Dimensione Direct Sales’). 9 Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights (OJ 2004 L 157, p. 45). 10 He quotes from the Communication of the Commission to the European Parliament, the Council and the European Economic and Social Committee — Guidance on certain aspects of Directive 2004/48/EC of the European Parliament and of the Council on the enforcement of intellectual property rights (Brussels, 29.11.2017, COM(2017) 708 final, p. 9), which states as follows: ‘It follows from the above that, in the Commission’s view, the concept of commercial scale, as used in various provisions of IPRED, should not be understood in purely quantitative terms; instead, certain qualitative elements, such as whether the activity in question is normally carried out for economic or commercial advantage, should be taken into account as well.’ 11 He refers to the judgment of 17 April 2008, Peek & Cloppenburg (C‑456/06, EU:C:2008:232, paragraph 37). 12 Dimensione Direct Sales, paragraphs 21 and 22. 13 Ibid., paragraphs 25 and 26. 14 Ibid., paragraphs 29 to 32. 15 Recital 28. 16 Some of the Court of Justice judgments to which I will refer later on have interpreted this Directive in requests for preliminary rulings specifically made in criminal proceedings. 17 Judgment of 17 April 2008, Peek & Cloppenburg (C‑456/06, EU:C:2008:232). 18 Ibid., paragraph 36. 19 Judgment of 21 June 2012, Titus Alexander Jochen Donner (C‑5/11, EU:C:2012:370). 20 Ibid., paragraph 12. The Italian company ‘used advertisements and supplements in newspapers, direct publicity letters and a German-language internet website to offer replicas of furnishings in the so-called “Bauhaus” style for sale to customers residing in Germany, without having a licence to market them in Germany’. 21 Ibid., paragraphs 26 and 27. Italics added. See, in this same respect, but in terms of the import into a Member State of counterfeit goods through a website located in a third country, the judgment of 6 February 2014, Martin Blomqvist (C‑98/13, EU:C:2014:55, paragraph 28). In that case, Council Regulation (EC) No 1383/2003 of 22 July 2003 concerning customs action against goods suspected of infringing certain intellectual property rights and the measures to be taken against goods found to have infringed such rights (OJ 2003 L 196, p. 7) was applied. 22 Dimensione Direct Sales judgment, paragraph 20. The case was between a company selling furniture (which was an imitation or counterfeit of protected works) directly or over the internet and the holder of the copyright over those creations. 23 Ibid., paragraph 28. 24 Ibid., paragraph 32. 25 I agree with Advocate General Cruz Villalón as regards the particular importance of the factual context of each case so far considered by the Court of Justice; see his Opinion in Dimensione Direct Sales (C‑516/13, EU:C:2014:2415, point 41). 26 See, for example, Martinek, M., ‘1. Kapitel. Grundlagen des Vertriebsrechts’, in Martinek, M. and Semler, F.-J. (eds.), Handbuch des Vertriebsrechts, Editorial C.H. Beck, Munich, 1996, p. 3. 27 Bently, L. and Sherman, B., Intellectual Property Law, Oxford University Press, 3rd edition, 2009, p. 144. 28 Judgment of 21 June 2012, Donner (C‑5/11, EU:C:2012:370, paragraph 23). 29 This seems to be a constant in the CT; see Reinbothe, J., ‘Chapter 7. The WIPO Copyright Treaty — Article 6’, in Reinbothe, J. and Von Lewinski, S., The WIPO Treaties on Copyright — A Commentary on the WCT, the WPPT, and the BTAP, 2nd edition, Oxford University Press, 2015, p. 110. Although a broader interpretation of the concept of ‘public’ could be proposed, its assimilation to the figure of the final consumer is consistent with the case-law of the Court of Justice on Article 3 of Directive 2001/29. 30 Judgment of 21 June 2012, Donner (C‑5/11, EU:C:2012:370, paragraph 26). 31 Dimensione Direct Sales, paragraph 28. 32 Reinbothe, J., op. cit., p. 111.