10 September 2019CopyrightRory O'Neill

AG says copyright exhaustion does not apply to e-books

The Court of Justice of the European Union (CJEU) has been advised that copyright is not exhausted when it comes to the re-sale of e-books.

In an opinion issued today, September 10, advocate general (AG) Maciej Szpunar said that while there were strong arguments to say that copyright is exhausted when downloaded works are resold, this is not the case under current EU law.

The case in question involves Dutch company Tom Kabinet, which re-sells used e-books, which it purchases from both individuals and official distributors.

As part of its model, Tom Kabinet requires users to delete their copies of the e-book after they sell them on to the Dutch company. All of Tom Kabinet’s e-books are also accompanied by a digital watermark to ensure their authenticity.

Tom Kabinet argues that its model benefits from the principle of exhaustion, which states that the copyright of the work is exhausted after its initial sale.

In this view, the company is free to sell these digital copies on without the permission of the copyright owner.

However, according to the AG, exhaustion of copyright should not apply to the sale of downloaded works, such as e-books, under current EU law.

The AG wrote that this model of supplying content was being “relegated to the past”, in favour of newer models such as streaming and subscription access to copyright-protected content.

This was partly why the court should decline to apply the principle of exhaustion to downloaded works, he said.

“By recognising the rule of exhaustion of the right of distribution in the internet environment, the court would thus resolve a problem that does not really need to be resolved and that to a large extent belongs to the past,” he said.

The AG said that applying the principle of exhaustion in this case would damage the interests of copyright owners.

“Digital copies do not deteriorate with use, and used copies are therefore perfect substitutes for new copies,” he wrote.

According to the AG, this would result in a “risk of competition from copies of the same quality offered at a fraction of the original market price”.

It was also “difficult to verify” that users had complied with their obligation under Tom Kabinet’s model to delete their original copy of the e-book in question after resale, the opinion wrote.

The AG also suggested that applying the rule of exhaustion in this case could “contribute to the development of piracy and make it more difficult to implement the measures intended to combat it”.

The CJEU will now decide whether to rule in line with the AG’s opinion.

The case was brought by two Dutch bodies representing copyright owners, Nederlands Uitgeversverbond and Groep Algemene Uitgevers.

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