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BREAKING: CJEU rules that the provision of ebooks is an act of communication to the public (so there is NO digital exhaustion under the InfoSoc Directive) - The IPKat
Home / #IPKat / C-263/18; copyright / digital exhaustion; InfoSoc Directive; e-books; Software Directive; EU copyright; CJEU; Tom Kabinet / Eleonora Rosati / BREAKING: CJEU rules that the provision of ebooks is an act of communication to the public (so there is NO digital exhaustion under the InfoSoc Directive)
Eleonora Rosati Thursday, December 19, 2019 - #IPKat, C-263/18; copyright, digital exhaustion; InfoSoc Directive; e-books; Software Directive; EU copyright; CJEU; Tom Kabinet, Eleonora Rosati
The answer of the Court is that there is NO such thing as 'digital exhaustion' of the right of distribution under Article 4 of the InfoSoc Directive. More specifically, the provision of ebooks falls within the scope of the right of communication to the public, in relation to which there is no possibility of exhaustion (see Article 3(3)).
The decision substantially follows the Opinion that Advocate General (AG) Szpunar issued a little over 3 months ago [Katpost here].
As explained in the official press release:
The Court found that the supply by downloading, for permanent use, of an e-book is not covered by the right of ‘distribution to the public’ provided for by Article 4(1) of Directive 2001/29, but that it is covered by the right of ‘communication to the public’ provided for in Article 3(1) of that directive, in which case exhaustion is excluded under paragraph 3 of that article.
Analogically exhausted Kat
Back in 2012, the CJEU issued its UsedSoft judgment, ruling that it is possible to resell lawful copies of computer programs downloaded from the internet, if the contractual operation at issue is tantamount to a sale (it was formally a 'licence' in the background national proceedings, though with the characteristics of a 'sale').
In the aftermath of UsedSoft - which, in itself, appeared a rather bold decision on the side of the Court - a question arose whether the same conclusion could be reached for other copyright subject matter in digital format, including e-books, audiobooks, music and audiovisual files, etc. That is: works protected under the InfoSoc Directive, rather than the Software Directive (the interpretation of which was at issue in UsedSoft).
In 2014, the Court of Appeal of Hamm (Germany) excluded that the right of distribution under the InfoSoc Directive, as transposed into German law, could be exhausted in the case of audiobooks.
Taking a different view, in that same year the District Court of Amsterdam ruled at first instance in Tom Kabinet and concluded that the right of distribution would be exhausted following the first lawful sale of copies of e-books. The decision of the Amsterdam court was appealed to the Court of The Hague. This court held that the provider of second-hand e-books, Tom Kabinet, would not be liable for unauthorized acts of communication to the public under the Dutch equivalent of Article 3(1) of the InfoSoc Directive. However, it is unclear whether it could invoke the digital exhaustion of the right of distribution in relation to its e-book trade. Hence, the court in The Hague decided to seek guidance from the CJEU.
In my view, today's CJEU decision is correct from a legal standpoint for a number of reasons.
As I discuss at greater length in Copyright and the Court of Justice of the European Union, some indirect guidance re the lack of digital exhaustion under the InfoSoc Directive can be also drawn from more recent case law, including Art & Allposters International [Katposts here] and Vereniging Openbare Bibliotheken [Katposts here], as well as some tax cases. Indeed, in Commission v France [Katpost here], the CJEU considered that ebooks may be classified as services, rather than goods under the VAT Directive. For the purpose of Article 98(2) of that directive, an ebook is not a good, but rather an ‘electronically supplied service’. This may suggest that, indeed, the provision of an ebook qualifies as an act of communication to the public, rather than as an act of distribution.
A more detailed analysis will follow after the text of the judgment becomes available.
[UPDATE AT 10:09 am GMT: THE TEXT OF THE JUDGMENT IS NOW AVAILABLE HERE]
BREAKING: CJEU rules that the provision of ebooks is an act of communication to the public (so there is NO digital exhaustion under the InfoSoc Directive) Reviewed by Eleonora Rosati on Thursday, December 19, 2019 Rating: 5