Foreningen af danske Videogramdistributører, acting for Egmont Film A/S, Buena Vista Home Entertainment A/S, Scanbox Danmark A/S, Metronome Video A/S, Polygram Records A/S, Nordisk Film Video A/S, Irish Video A/S and Warner Home Video Inc. v Laserdisken.
Date: 1998-09-22
10 In those circumstances, according to settled case-law whose requirements are of particular importance in the area of competition, which is characterised by complex factual and legal situations (see, inter alia, the judgment in Joined Cases C-320/90, C-321/90 and C-322/90 Telemarsicabruzzo and Others [1993] ECR I-393, paragraphs 6 and 7, and the order in Case C-157/92 Pretore di Genova v Banchero [1993] ECR I-1085, paragraphs 4 and 5), the questions referred by the national court must be regarded as inadmissible in so far as they concern the interpretation of Articles 85 and 86 of the Treaty.  As a result, those questions can be considered only with regard to the interpretation of Articles 30 and 36 of the Treaty and the Directive.
13 As the Court pointed out in paragraph 14 of its judgment in Case C-200/96 Metronome Musik v Music Point Hokamp [1998] ECR I-1953, the principle of exhaustion of distribution rights where copyright works are offered for sale by the rightholder or with his consent is expressed in the settled case-law according to which, whilst Article 36 of the EC Treaty allows derogations from the fundamental principle of the free movement of goods on grounds of the protection of industrial and commercial property, such derogations are allowed only to the extent to which they are justified by the fact that they safeguard the rights which constitute the specific subject-matter of that property.  However, the exclusive right guaranteed by the legislation of a Member State on industrial and commercial property is exhausted when a product has been lawfully distributed on the market in another Member State by the actual proprietor of the right or with his consent (see in particular Joined Cases 55/80 and 57/80 Musik-Vertrieb Membran and K-tel International v GEMA [1981] ECR 147, paragraphs 10 and 15, and Case 58/80 Dansk Supermarked v Imerco [1981] ECR 181, paragraph 11).
14 However, as the Court also pointed out in Warner Brothers and Another v Christiansen, literary and artistic works may be the subject of commercial exploitation, whether by way of public performance or of the reproduction and marketing of the recordings made of them.  That applies, for example, to the rental of video-cassettes, which involves a public distinct from the one for the sale of those products and constitutes an important potential source of revenue for makers of films.
15 In that connection, the Court pointed out that, by authorising the collection of royalties only on sales to private individuals and to persons hiring out video-cassettes, it is impossible to guarantee to makers of films a remuneration which reflects the number of occasions on which the video-cassettes are actually hired out and which secures for them a satisfactory share of the rental market.  Laws which provide specific protection of the right to hire out video-cassettes are therefore clearly justified on grounds of the protection of industrial and commercial property pursuant to Article 36 of the Treaty (Warner Brothers and Another v Christiansen,  cited above, paragraphs 15 and 16).
16 In the same judgment, the Court also rejected the argument that a maker of a film who has offered the video-cassette of that film for sale in a Member State whose legislation confers on him no exclusive right of hiring it out must accept the consequences of his choice and the exhaustion of his right to restrain the hiring-out of that video-cassette in any other Member State.  Where national legislation confers on authors a specific right to hire out video-cassettes, that right would be rendered worthless if its owner were not in a position to authorise the operations for doing so (paragraphs 17 and 18).
17 The release into circulation of a picture and sound recording cannot therefore, by definition, render lawful other acts of exploitation of the protected work, such as rental, which are of a different nature from sale or any other lawful act of distribution.  Just like the right to present a work by means of public performance (see, in that connection, Case 395/87 Ministère Public v Tournier [1989] ECR 2521, paragraphs 12 and 13), rental right remains one of the prerogatives of the author and producer notwithstanding sale of the physical recording (Metronome Musik, paragraph 18).
20 While the third recital in the preamble to the Directive refers, in order to justify eliminating the differences between national laws, to the objective set out in Article 8a of the Treaty, namely to introduce an area without internal frontiers, the object of the Directive is, as the Court found in paragraph 22 of Metronome Musik, to establish harmonised legal protection in the Community for rental and lending right and certain rights related to copyright in the field of intellectual property.  Here it draws a distinction between the specific rental and lending right, referred to in Article 1, and the distribution right, governed by Article 9 and defined as an exclusive right to make one of the objects in question available to the public, principally by way of sale.  Whereas lending right is not exhausted by the sale or any other act of distribution of the object, distribution right, by contrast, is exhausted upon the first sale in the Community by the rightholder or with his consent (Metronome Musik, paragraph 19).
21 Thus the Directive expressly precludes the possibility that lending right, unlike distribution right, can be exhausted by any act of distribution of the object in question.  As stated at paragraph 18 of this judgment, such exclusion is justified by the very nature of rental right, which would be rendered worthless if it were held to be exhausted as soon as the object was first offered for rental.