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The EU’s highest court has ruled that the exhaustion of copyright does not apply to e-books.
In a highly-anticipated decision, issued today, December 19, the Court of Justice of the European Union (CJEU) held that offering ‘second-hand’ e-books for sale qualifies as an unauthorised “communication to the public” under the 2001 InfoSoc Directive.
The ruling stems from a dispute involving Dutch company Tom Kabinet, which purchases e-books from both individuals and retailers and resells them online.
Two groups representing Dutch copyright owners, including authors and publishers, filed a copyright infringement lawsuit in Amsterdam against Tom Kabinet.
An appeals court based in The Hague asked the CJEU to step in, seeking clarification on Tom Kabinet’s argument that the resale of e-books was permitted under the principle of copyright exhaustion.
When a book is sold in physical form, the copyright for the work is said to have been ‘exhausted’, in other words, the purchaser is free to sell it on without violating the author or publisher’s IP.
Tom Kabinet argued that the exact same principle should hold for digital copies.
The CJEU, following the AG’s opinion, ruled that rights exhaustion in the case of e-books would damage rights owners much more than in the case of physical copies.
This is because e-books do not deteriorate with use and are therefore a perfect substitute for new physical copies of the work.
The Dutch copyright groups argued that Tom Kabinet’s resale of the e-books constituted an unauthorised “communication to the public” of the copyright-protected material under Directive 2001/29/EC (commonly known as the InfoSoc Directive).
Under EU law, exhaustion of copyright only applies to the right of distribution. In today’s judgment, the CJEU found that downloading an e-book is not covered by the right of distribution, but rather the right of communication to the public, which cannot be exhausted.
The court referred to the World Intellectual Property Organisation (WIPO) Copyright Treaty, which underpins the InfoSoc Directive. According to the court, that treaty holds that rights exhaustion should be “reserved for the distribution of tangible objects,” such as physical books.
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