Etiket: digital exhaustion

Tom Kabinet Case: Is it possible to introduce “digital exhaustion” under InfoSoc Directive?

Facts

AG Szpunar has finally delivered his long-awaited opinion over the questions referred by the District Court of Hague where the Court sought guidance of the ECJ in respect of “digital exhaustion”, concerning the sale of second hand e-books.

The defendants, associations committed to defending interests of publishers in Netherlands, filed a lawsuit against Tom Kabinet, a website whose business model is based on providing a platform for used e-books. The case was initiated on the ground that Tom Kabinet commits copyright infringement by offering downloadable content of copyright-protected works without getting authors’ consents. 

The issue raised before the Hague Appellate Court turns essentially on the question of whether the exhaustion rule, which is overwhelmingly acknowledged for tangible copy of literary works such as books and musics, is applicable for materials made available by way of downloading online by subsequent owners.

Summary of AG’s Opinion and Analysis of Case

The Appellate Court referred a number of questions through which it sought to find out;

– Whether the making available of an e-book by means of downloading online for permanent use falls into scope of “right of distribution” as in the sense of Article 4(1).

-And if affirmative, whether the distribution of work exhausted in the EU following the sale of second-hand ebooks via downloading online. (In other words, a purchased e-book can be subject of re-sale by means of downloading without need of getting its author’s consent)

-Whether the act of reproduction to transfer the e-book is lawful

After briefly providing information regarding how the exhaustion rule was introduced into the EU context, AG Szpunar identified the challenge posed by the notion of digitisation of copyrightable contents[1]. As he pointed out rightly, the challenge arises from the competing interests of two different parties[2]. On the one hand, copyright holders seek to have as much control as possible over their works including the possibility to confine purchasers’ ownership right to their very private circle. On the other hand, purchasers are willing to be able to sell the copy of copyrighted material to their parties in any way they desire. With highlighting the competing of these two interests, AG shows also the availability of two different policies in which one of those interest may be favoured more.

Szpunar discussed in detail the nature of the act of “supply to public by downloading online” to answer the question of whether this act comes into the scope of right of distribution or right of communication to the public. According to him, this act displays a mixed nature of both rights. With regard to communication to the public, he set out that when the work is made available to the public online any individual can have access to the work at distance and this constitutes a “classic communication to the public”. However, this act is not limited to having access at distance but it also enables the users to make a copy of that work on their own computer and enjoy it whenever they want. At this point it is clear that by downloading the copyright-protected material the reproduction of work takes place and this results in distribution of work to a large number of users. That is why AG Szpunar asserted that the downloading resembles an act of distribution[3].      

This mixed nature of downloading, as Szpunar noted, was also recognised by WIPO Copyright Treaty. The Copyright Treaty adopted an “umbrella solution” whereby it accommodated both rights while giving priority to the right of communication to the public. As pointed out by Szpunar, since the Treaty seeks to establish a minimum level of protection the communication to public was prioritised. Because, the right of distribution is limited by “exhaustion rule” whereas there is no such limitation for right of communication to the public[4].  To clarify the extent of exhaustion rule, the Agreed Statement concerning Copyright Treaty lay down that the exhaustion rule applies to “fixed copies that can be put into circulation as tangible objects”[5].

With the EU becoming a party to Copyright Treaty, the EU law also acknowledged the mixed nature of making available by downloading and accepted that the exhaustion rule applies solely to tangible copies[6].

Furthermore, as put correctly by Szpunar, recognising the exhaustion rule to supply of content by downloading would be tantamount to introducing exhaustion rule into the right of reproduction[7]. However, such attempt would result in deprivation of authors from control over reproduction of their works and go against the core meaning of IP right system.

With regard to the referring court inquiry about whether the act in dispute could be designated as act of distribution, it cannot be said AG Szpunar does share this view. He noted that downloading is covered by right of making available to public on the grounds he cited with reference to Recital 24,25, 28 and 29 of Directive 2001/29.

The defendant relied on the ECJ’s judgement of UsedSoft where the ECJ ruled in favor of the exhaustion rule concerning the sale of computer programs. According to the ECJ, the supply of a computer program by downloading online for permanent use would lead to the exhaustion of distribution right. However, AG Szpunar did not find this claim appropriate on the basis of the differences between computer programs and other categories of works such as books and musics. According to AG, e-books are not computer programs and Software Directive 2009/24 is confined to computer programs. In other words, Software Directive constitutes lex specialis and it only governs the copyright aspect of computer programs[8].

As set clearly above, AG Szpunar weighs in against the idea of exhaustion rule for supply of e-books by downloading online. Meanwhile, AG did not disregard the arguments supporting the recognition of exhaustion rule of the right of distribution in the case of downloading. But he also noted that the literal interpretation of current-EU rules does not support such approach.

Ahmet Şamil ÇİÇEK

November 2019

a.samilcicek@gmail.com


[1] Case C‑263/18 Nederlands Uitgeversverbond, Groep Algemene Uitgevers v Tom Kabinet Internet BV, Opinion of Advocate General Szpunar, paragraphe 1

[2] Ibid, paragraphe 4

[3] Ibid, paragraphe 32

[4] Ibid, paragraphe 34

[5] Concerning Article 6 and 7

[6] Case C‑263/18 Opinion of Szpunar, paragraphe 36

[7] Ibid, paragraphe 48

[8] Ibid, paragraphe 67