In a much awaited decision, the Court of Justice of the European Union ruled on 19 December 2019 that the online sale of second-hand e-books constitutes an act of communication to the public and is subject to the author’s authorisation (case C-263/18).
Two Dutch associations defending the interests of publishers had brought an action against Tom Kabinet, a company which offered second-hand e-books for sale to members of its online reading club. Tom Kabinet argued that its activities consisted in a distribution of the books. The distribution of a work is subject to the rule of exhaustion: once the object protected by an IP right has been sold in the European Union by the rightholder or with his consent, the rightholder no longer has the exclusive right to authorise or prohibit the distribution of that object. The associations, on the other hand, argued that by offering second-hand e-books for sale, Tom Kabinet was communicating those books to the public, an act which was not authorised by the authors and is not subject to the rule of exhaustion.
Whether there was copyright infringement therefore depended on whether the online sale of a second-hand e-book (i.e. the supply by downloading, for permanent use, of an e-book) qualified as an act of distribution or an act of communication to the public.
Referring to the Copyright Treaty of the World Intellectual Property Organisation and the preparatory works for EU Directive 2001/29 on the harmonisation of certain aspects of copyright and related rights in the information society, the Court found that the rule of exhaustion was intended to be reserved for the distribution of tangible objects, such as books on a material medium.
Also, the Court stated that the supply of a book on a material medium and the supply of an e-book cannot be considered equivalent from an economic or functional point of view. E-books do not deteriorate with use, and used copies are perfect substitutes for new copies. In addition, exchanging such copies requires neither additional effort nor additional cost, so that a parallel second-hand market for e-books would be likely to affect the interests of copyright holders in obtaining an appropriate reward for their works much more than the market for second-hand tangible objects.
Regarding the concept of communication to the public, the Court held that this should be understood in a broad sense, covering any communication of a work to the public not present at the place where the communication originates. Hence, this covers any transmission or retransmission of a work to the public by wire or wireless means.
More specifically, the Court recalled that the concept of communication to the public involves two cumulative criteria: an act of communication of a work and the communication of that work to a public. With regard to the first criterion, the Court pointed out that the e-books were made available to anyone registered with Tom Kabinet's website, an act that must be considered as a communication of the work, irrespective of whether the work would actually be retrieved from the site.
The number of people that are able to access the same work at the same time and how many of them may access it in succession are the key factors for assessing the second criterion. According to the Court, those numbers were substantial in the case at hand, since any interested person could become a member of the reading club, and there was no technical measure on the club’s platform ensuring that (i) only one copy of a work may be downloaded in the period during which the user of a work actually has access to the work and (ii) after that period has expired, the downloaded copy can no longer be used by that user.
Last, the Court confirmed that a communication such as that effected by Tom Kabinet was made to a “new” public, i.e. a public that was not already taken into account by the copyright holders when they authorised the initial communication of their work to the public. Indeed, the making available of an e-book is generally accompanied by a user license authorising the user who has downloaded the e-book concerned only to read that e-book from his or her own equipment.
Hence, the Court concluded that the supply by downloading, for permanent use, of an e-book is covered by the right of communication to the public and is not subject to the rule on exhaustion of the distribution right.
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