HomeInsightsCourt of Justice of the European Union holds that the supply of e-books online amounts to a communication to the public under Article 3(1) of the Copyright Directive (2001/29/EC) and is not covered by the principle of exhaustion of the distribution right under Article 4

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The question of whether the supply of an e-book online is covered by Article 4 or Article 3(1) of the Copyright Directive was referred to the CJEU by The Hague following copyright infringement proceedings brought by two Dutch trade associations against the defendant, Tom Kabinet Internet BV.

Tom Kabinet runs a website selling used e-books purchased either from official distributors or from other individuals. Tom Kabinet resells the e-books to individuals registered on its site as members of a “reading club”. The prices charged by Tom Kabinet are lower than the prices charged by official distributors. Tom Kabinet’s site encourages individuals who have bought e-books on its site to resell them to it after they have read them, which entitles them to “credits” allowing them then to buy other books. When it buys e-books from individuals, Tom Kabinet requires that they delete their own copy, and it places a digital watermark on the copies that it sells.

The trade associations sought an injunction prohibiting Tom Kabinet from making e-books available to members of the “reading club” on the grounds that it amounted to copyright infringement by making an unauthorised communication of those books to the public under Article 3(1) of the Copyright Directive (2001/29/EC). Tom Kabinet argued, on the other hand, that the sales were covered by the principle of exhaustion of the distribution right under Article 4.

Referring to the World Intellectual Property Organisation (WIPO) Copyright Treaty that underlies the Copyright Directive, and the Directive’s travaux préparatoires, the CJEU concluded that the EU legislature had intended the exhaustion principle to apply to the distribution of tangible objects, such as books in a material medium. Applying the principle to e-books would be likely to affect the ability of rights holders to obtain appropriate reward for their works, much more than in the case of hard copy books, since e-books do not deteriorate with use and are, therefore, perfect substitutes for new copies on any second-hand market.

As for “communication to the public”, the CJEU said that this should be interpreted in a broad sense, as covering all communication to the public that does not take place where the communication originates, i.e. including any transmission or retransmission of a work to the public by wire or wireless means. The concept comprises two cumulative criteria, the CJEU said: (i) the act of communication of a work; and (ii) communication of that work to the public.

As for the first criterion, the explanatory memorandum in the proposal for the Copyright Directive states that “the critical act is the “making available of the work to the public”, thus the offering [of] a work on a publicly accessible site, which precedes the stage of its actual “on-demand transmission””, and that “it is not relevant whether any person actually has retrieved it or not”. Therefore, the CJEU said, the making available of e-books to anyone registered with the reading club’s website is a “communication” of a work, irrespective of whether the person concerned actually downloads the e-book from that website.

As for the second criterion, the CJEU said that account should be taken not only of the number of persons able to access the same work at the same time, but also of how many of them could access it in succession. In this case, the number of people who had access, at the same time or in succession, to the same work was substantial. Consequently, subject to verification by the referring court, the work had to be regarded as being communicated to a public.

The CJEU also held that in order to be categorised as a communication to the public, a protected work must be communicated using specific technical means, different from those previously used or, failing that, to a new public, i.e. to a public that had not been taken into account by the copyright holders when they authorised the initial communication of their work to the public. In this case, since the making available of an e-book was generally accompanied by a user licence authorising the user who had downloaded the e-book only to read it from his or her own equipment, the CJEU held that Tom Kabinet’s acts of communication were to a public that had not already been taken into account, i.e. they were to a new public. (Case C-263/18 Nederlands Uitgeversverbond v Tom Kabinet Internet BV EU:C:2019:1111 (19 December 2019) — to read the judgment in full, click here).