Source: https://ccdigitallaw.ch/index.php?cID=854
Timestamp: 2019-04-25 02:27:32+00:00

Document:
Authors have the right to offer, sell or otherwise distribute copies of their work (Art. 10 para. 2 (b) CopA).
Basically, authors have the right to decide whether, when and how they publish their work for the first time (right of first publication). In this case, the right to distribute determines the manner in which authors can publish their work. Authors can offer, market, sell, lend, rent and also give away their work. The right to distribute comprises all the forms as well as the scope of distribution (e.g. number, print run, time – when, place - where). It does not matter whether the distributed work is an original or a copy (cf. Hilty, Urheberrecht, 2011, 135 et seq.).
The principle of exhaustion should always be considered in connection with the right to distribute. This principle is regulated in Art. 12 para. 1 CopA and states that a work can be freely resold or otherwise distributed once the author has sold a copy of the work for the first time or agreed to its initial sale.
If an author assigns ownership of the work to a third party (e.g. by sale, exchange or gift) or agrees to such an assignment, the author is considered to have 'sold the work for the first time'. In this case, the third party may then freely resell (sell, give away, exchange) or otherwise distribute (rent out, lend, swap) the work without the further consent of the author. The principle of exhaustion therefore limits the author's right to distribute the work as authors lose the right to distribute the work when they give away their copy of the work. However, they do not lose any other rights – the author retains all the other rights of use pursuant to Art. 10 para. 2 CopA as well as their moral right.
For example, a library may lend out the works given once to the library by an artist without the artist's consent, but it may not reproduce these works (right to use pursuant to Art. 10 para. 2 (a) CopA). If one of these works has not even been published for the first time, the library is not permitted to publish the work for the first time (moral right of the author pursuant to Art. 9 para. 2 CopA).
Authors are not generally compensated for the loss of the right to distribute. However, if the conditions of Art. 13 CopA have been met, authors can share in the financial proceeds (explained in detail under 'Good to know: Copies of literary and artistic works').
The principle of exhaustion does not apply if an author only grants a third party the right to use a work, in particular if the work is rented or lent to a third party. Thus, if a third party is obliged to return the work to the author, the principle of exhaustion does not apply and the author still has the exclusive right to distribute the work.
In both cases, i.e. rental (Art. 253 SCO) and loan for use (Art. 305 SCO), an item is given to a third party to use with the obligation to return it. The essential difference is that a rental fee is payable when renting an item, but the loan of an item is usually free of charge.
When renting (i.e. transferring for use in return for payment) copies of literary and artistic works, the effect of Art. 13 CopA on the principle of exhaustion must be considered. According to the principle of exhaustion, the person who is granted ownership of the work by the author is also entitled to rent the work in return for payment. Pursuant to Art. 13 para. 1 CopA this person owes remuneration to the author if the rented work is a 'copy of a literary or an artistic work'.
Only physical works can be literary and artistic works in this sense, i.e. works that can be physically rented to a third party (e.g. books, CDs, etc.) and which must be returned. Works that are made available online are not included.
In addition, the lessor must rent the work in return for a rental fee; loans are not included as a loan implies that no payment is due for the item that has been transferred. This is based on the principle that authors should share in the rental income, even if they have given up their ownership of the work. Authors cannot claim payment directly; they can only be remunerated through a licensed collective rights management organisation.
In practice, this rule is mainly relevant for libraries: libraries actually lend out books (i.e. 'copies of literary and artistic works') free-of-charge, but most libraries collect a membership or user fee. Does this qualify as 'making something available for a fee', i.e. does Art. 13 para. 1 CopA apply to libraries? Joint Tariff (JT) 6a, 'Offering works for rent in libraries' applies a better definition to the rental of copies of works by libraries. Annual membership fees, one-off registration fees and administration fees do not qualify as payment (cf. section 1.4 JT 6a). Thus, if libraries levy annual membership fees as payment, which is the case for many libraries, they do not have to remunerate the author pursuant to Art. 13 para. 1 CopA.
4.2.2-1 Does Art. 10 para. 2 (b) CopA only apply to the distribution of originals?
No, the distribution of works applies to originals as well as copies (cf. Hilty, Urheberrecht, 2011, 135).
4.2.2-2 Does the principle of exhaustion pursuant to Art. 12 para. 1 CopA apply if a copy of a work produced without any authorisation ('piracy') is sold?
No, a work may only be freely resold or used in any other way if authors sell the work themselves or allow another person to sell the work. This does not apply here (cf. Barrelet/Egloff, Urheberrecht, 3rd edition, 2008, Art. 12 N. 9).
4.2.2-3 A photo given by an author to a third party is marked with 'not for further use. May this photo be sold to someone else by the third party?
Generally speaking, such a notice on a copy of a work is irrelevant because of the principle of exhaustion and the limiting provisions. This is different if the photo has not yet been published for the first time by the author and if the author gave the photo to the third party under the explicit condition that the photo may not be distributed further. The author has the exclusive right of first publication (Art. 9 para. 2 CopA); this is the author's moral right and is not affected by the principle of exhaustion (cf. Barrelet/Egloff, Urheberrecht, 3rd edition, 2008, Art. 12 N. 9a and 10).
4.2.2-4 May a legitimate buyer of a black-and-white photo convert this photo into a colour photo and justify this action with the principle of exhaustion?
No. Although the buyer became the owner of the photo, the conversion of the photo is an alteration pursuant to Art. 11 para. 2 CopA. Only the author may make alterations; it is the moral right of the author. This right is not affected by the principle of exhaustion.
4.2.2-5 Does the principle of exhaustion also apply if the author published their work for the first time abroad or for the foreign market?
Yes, international exhaustion applies. Pursuant to Swiss copyright law, the legitimate buyer of a copy of a work may then freely resell or otherwise distribute this copy (for more detail, cf. BGE 124 III 321 et seq.).
4.2.2-6 When is a book rented, and when is it lent to someone?
In both cases, a book is given to someone else for a certain period, and this natural person has to return the book after this period. If the book is rented, the person who rents the book must pay a fee for the use of the book. However, if someone only lends the book, no fee is payable.
4.2.2-7 Where in copyright law is this difference between renting and lending important?
With regard to the obligation to pay compensation for the rental of copies of literary and artistic works, Art. 13 para. 1 CopA.
4.2.2-8 Does Art. 13 para. 1 CopA (rental of copies of literary and artistic works) also apply to data made available on the Internet?
No, it only applies to physical objects. Only physical objects can be 'made available for a fee' pursuant to Art. 13 para. 1 CopA.
4.2.2-9 Are there exceptions to the right to rent pursuant to Art. 13 para. 1 CopA, i.e. rental without an obligation to remunerate the authors or collective rights management organisations?
if the rental company and a user concluded a contract regarding the use of the copyrights (e.g. contract between the rental company and cinema regarding the rights to screen a film) and the tools for performing the contract also have to be rented out (in this case, the film reel) (example based on Müller/Oertli-Pfortmüller, URG, 2nd edition, 2012, Art. 13 N. 6).
4.2.2-10 Who must be remunerated pursuant to Art. 13 para. 1 CopA?
The collective rights management organisations – Art. 13 para. 3 CopA. Only collective rights management organisations are entitled to assert claims for remuneration, not the authors.
4.2.2-11 Do libraries have to pay remuneration under Art. 13 para. 1 CopA, and if yes, to whom?
Pursuant to Art. 13 para. 1 CopA, libraries have to pay remuneration if they charge a lending fee. The term lending fee is defined in detail in para. 1.3. and 1.4. of Joint Tariff 6a, offering works for rent in libraries. This agreement was concluded between the collective rights management organisation ProLitteris and the libraries. If a library charges a fee for lending books to readers, it has to pay remuneration to ProLitteris pursuant to Art. 13 para. 1 CopA. The remuneration for books is 9% of the fee paid by the users (cf. para. 4.1 (c) JT 6a).

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