HomeInsightsAdvocate General Szpunar Opines That the Lending Right Includes E-Lending

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On 16 June 2016, Advocate General Szpunar handed down his Opinion in Vereniging Openbare Bibliotheken v Stichting Leenrecht (Case C-174/15), recommending that the Court of Justice of the European Union hold that the lending right in Directive 2006/11 includes lending of electronic books.

The Directive permits Member States to provide for a derogation from the lending right, subject to at least authors receiving remuneration. The Advocate General noted that where Member States provide for such a derogation, e-lending must be limited to lending by libraries, for a limited period of time and subject to the three-step test. In this context, the role of technological protection measures was emphasised.

In addition, the Advocate General proposed, in response to a specific question by the referring court, that the lending right applies solely to e-books obtained from lawful sources, extending the Court’s previous ruling on lawful source under the private copy exception to the lending right.

Finally, the referring court requested guidance as to the doctrine of exhaustion, in response to which the Advocate General robustly clarified that the mechanism of exhaustion bears no relation to the lending right and that the acquisition of the right to lend a work is not dependent on the exhaustion of the distribution right.

We note that the Advocate General was careful to confine his Opinion strictly to the lending of e-books and subject to certain safeguards. Therefore, should the Opinion be followed by the Court, it is the publishing sector that will feel the impact most keenly. Other content sectors appear to fall outside the scope of the Opinion. Further, if Member States derogate from the lending right, remuneration must be provided authors. While a remuneration scheme is likely to satisfy the authors’ collective management organisations which made submissions to the Court in this case, it leaves publishers in a tenuous position, particularly following the Court’s recent judgment in Hewlett-Packard Belgium SPRL v Reprobel SCRL (Case C‑572/13). In that case, the Court found that publishers were not rightholders under EU copyright law and therefore cannot benefit from the private copy levy scheme which provided for remuneration to authors as the beneficiaries of the exclusive right in question. In this context, we note that the European Commission recently has consulted on the creation of a related rights for publishers, which, while far from a perfect solution, may go some way to addressing the impact of this Opinion, if followed, on publishers.

The Opinion of the Advocate General is not binding. The judgment of the Court can usually be expected three to six months from the publication of the Opinion.

The Opinion is available here.