CJEU rules that the market of “used” e-books is not in accordance with EU law
Just before Christmas, the CJEU issued its long-awaited decision in the Tom Kabinet case. The Court followed the opinion of advocate general Szpunar and decided that copyrights are not exhausted in case of sale of e-books. A distinction was drawn between e-book and computer programs, the latter not being subject to the exhaustion doctrine. This means that to establish an online market of “second-hand” software no authorisation of copyright holders is required.
EU law establishes the doctrine of exhaustion, according to which the distribution right is exhausted with the first sale of goods, on which rights are materialised (such as a CD or a book). In the UsedSoft case, the CJEU decided that the doctrine is applicable in case of online sale of “used” computer programs, under the condition that the seller deletes its copy of the program after the transfer to the buyer.
A similar case, with the difference that it concerns the sale of “used” e-books, came before the Dutch court which was not sure about the applicability of the doctrine of exhaustion in this case and thus posed a question for preliminary ruling to the CJEU. The Court reformulated the question asking itself whether enabling permanent downloading of an e-book constitutes distribution (in relation to which the doctrine is applicable) or perhaps communication to the public (regarding which the doctrine is inapplicable) according to the InfoSoc Directive.
In assessing the criteria of the communication to the public, the Court said that making the works available on a website constitutes an act of communication, even if the works are nor eventually downloaded. As potentially everyone, as long as he or she is a member of the online “reading club”, can access the work, the condition of the public is also met. Additionally, the fact that the majority of the licensing agreements contain a clause stating that only the licensee can read the book on his or her own equipment supports the finding that the work is communicated to a public that was not envisaged by the copyright holder when he or she first made the work available. The CJEU thus concluded that there has been a communication to the public for which the doctrine of exhaustion does not apply.
The Court did not address the question whether the practice constitutes an act of distribution (which was actually the question posed by the referring court), however, it implied that even in this case, there would be no exhaustion. While the Software Directive does not distinguish between tangible and intangible copies (for instance, between software on CDs and DVDs on the one hand and software downloaded from the internet on the other), the InfoSoc Directive applies the exhaustion doctrine to rights on a tangible object only (thus only to books but not to e-books). The judgement will have detrimental impacts not only to the providers of “second-hand” e-books but most likely also the providers of other content covered by the InfoSoc Directive (for example, audio books, films and music).
On 23rd of November, 2021, the European Commission has published two reports in the field of copyright, as required by Directives 2014/26/EU (CRM Directive) and 2019/790 (DSM Directive). They are supported by two studies: Study on emerging issues on collective licensing management in the digital environment, and Study on selected issues relating to the application of the CRM Directive.
A new book “Law and Artificial Intelligence: Issues of Ethics, Human Rights and Social Harm” was published (Institute of Criminology at the Faculty of law in Ljubljana, 2021), the editors of which are prof. dr. Aleš Završnik and dr. Katja Simončič. The author of one of the articles is also dr. Maja Bogataj Jančič, LL.M., LL.M., who wrote an article on the topic of whether artificial intelligence can be an author of a copyright work.
Jožef Štefan Institute is organising GO-DIP workshop series, first of them coming on November 19th, 2021 is revolving around software IP and data agreements. The GO-DIP project aims to increase the competencies of knowledge generators and intermediaries. At 15.10 dr. Maja Bogataj Jančič, LL.M., LL.M. will be lecturing in the Workshop: Development of a checklist for model digital IP agreements. Welcome!
2nd GPAI Summit will occur from 11-12 November, 2021 in Paris, France. Leading international AI experts from civil society, academia, industry and governments, including ministerial-level delegates from GPAI’s Membership, will come together for GPAI’s annual event. This public-facing event will include reporting on the ten Working Groups’ study topics, including the reporting of Data Governance Working Group (DG WG). Public conferences will be broadcasted live on GPAI’s Youtube channel. Welcome!