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Thursday, 10 November 2016

BREAKING: CJEU says that EU law allows e-lending

Are libraries allowed to lend electronic books in their collections under the Rental and Lending Rights Directive? If so, under what conditions? Is there such thing as digital exhaustion under the InfoSoc Directive?

These were the questions in Vereniging Openbare Bibliotheken v Stichting Leenrecht, C-174/15, a reference for a preliminary ruling to the Court of Justice of the European Union (CJEU) from the Rechtbank Den Haag (District Court of The Hague, Netherlands). 


As reported by this blog, this reference arose in the context of proceedings brought by the association of Dutch public libraries which - contrary to the position of Dutch government - holds the view that libraries should be entitled to lend electronic books included in their collections according to the principle "one copy one user". 


This envisages the possibility for a library user to download an electronic copy of a work included in the collection of a library with the result that - as long as that user "has" the book - it is not possible for other library users to download a copy. Upon expiry of the e-lending period, the electronic copy downloaded by the first user becomes unusable, so that the book in question can be e-borrowed by another user. 


The AG Opinion

In his Opinion on 16 June last, 
Advocate General (AG) Maciej Szpunar advised the CJEU to rule that Article 1(1) of the Rental and Lending Rights Directive must be interpreted in the sense of including the right to lend electronic books included in a library's own collection. Although the AG held the view that the issue of digital exhaustion under the InfoSoc Directive is unrelated from that of whether libraries can e-lend, he provided some interesting hints in this respect. 


At the time of the Opinion, I highlighted how the AG discussed the role of libraries and - similarly to a more recent Opinion [here] of AG Szpunar (once again on the Rental and Lending Rights Directive) - stressed how [para 27] "it is imperative to give legal acts an interpretation which takes into account developments in technology, markets and behaviour and not to fix such acts in the past by adopting too rigid an interpretation."



Milly is worried:
what would be of her favourite hiding place
if all books became electronic?
Today's decision

In today's judgment the CJEU appeared to confirm the AG's analysis [the judgment is not yet available on the Curia website, but the press release is]


According to the press release: 

"The lending of an electronic book (e-book) may, under certain conditions, be treated in the same way as the lending of a traditional book. 

In such a situation, the public lending exception, which provides inter alia for the fair remuneration of authors, is applicable. 

... 

In today’s judgment, the Court of Justice first notes that there is no decisive ground allowing for the exclusion, in all cases, of the lending of digital copies and intangible objects from the scope of the directive. That conclusion is, moreover, borne out by the objective pursued by the directive, namely that copyright must adapt to new economic developments. In addition, to exclude digital lending entirely from the scope of the directive would run counter to the general principle that a high level of protection is required for authors. 

The Court then goes on to verify whether the public lending of a digital copy of a book under the ‘one copy, one user’ model is capable of coming within the scope of Article 6(1) of the directive. 

In that respect, the Court notes that, given the importance of the public lending of digital books, and in order to safeguard both the effectiveness of the exception for public lending referred to in Article 6(1) of the directive and the contribution of that exception to the promotion of culture, it cannot be ruled out that that article may apply where the operation carried out by a publicly accessible library, in view of, inter alia, the conditions set out in Article 2(1)(b) of that directive, has essentially similar characteristics to the lending of printed works. That is the case as regards the lending of a digital copy of a book under the ‘one copy, one user’ model. 

The Court therefore holds that the concept of ‘lending’, within the meaning of the directive, also covers lending of this kind. 

The Court also notes that the Member States may lay down additional conditions capable of improving the protection of authors’ rights beyond what is expressly laid down in the directive. In the present case, the Netherlands legislation requires that the digital copy of a book made available by the public library must have been put into circulation by a first sale or other transfer of ownership of that copy in the EU by the holder of the right of distribution to the public or with that holder’s consent. According to the Court, such an additional condition must be considered to be in accordance with the directive. 

Concerning the case where an electronic copy of a book has been obtained from an unlawful source, the Court emphasises that one of the objectives of the directive is to combat piracy and points out that allowing the lending of such a copy would be liable unreasonably to prejudice copyright holders. Consequently, the public lending exception does not apply to the making available by a public library of a digital copy of a book in the case where that copy has been obtained from an unlawful source."

An initial comment

A more detailed analysis will be provided as soon as the judgment is available. In the meantime, it is worth noting that: 

(1) not only is the judgment good news for libraries, but 
(2) unlike what has been held by a number of leading commentators, the Rental and Lending Rights Directive allows e-lending. In this respect, it will be interesting to see whether the CJEU (similarly to the AG) also referred to the need for an interpretation of legal norms that takes into account technological advancement.

Finally, it is not clear from the text of the press release whether the CJEU addressed digital exhaustion. If not, whether this is allowed under the InfoSoc Directive remains unclear.

4 comments:

Anonymous said...

The judgment has been made available in Dutch. To answer your question: In paragraph 56 and 57, the Court considers that Article 4(2) of the InfoSoc Directive (regarding copyright exhaustion) is without prejudice to the provisions laid down in the Rental and Lending Rights Directive. According to the Court, this means that Article 4(2) of the InfoSoc Directive is of no importance to the interpretation of Article 6(1) of the Rental and Lending Rights Directive. The Court does not go into digital exhaustion.

ex-examiner said...

The decision is evidently based on the presumption (perhaps "legal fiction" would be more appropriate) that all "one copy, one user" software actually "does what it says on the tin". As noted in a previous related post of 16 June 2016, the system in place at our local public library that is supposed to have "one copy, one user" functionality, is far from 100% effective, being easily circumventable by using ordinary consumer devices in the way that they were designed without employing any special hacking of software or modification of the devices.

Matej Gera said...

Now reading through judgement, para. 50 & 51 caught my eye, where court considers Art. 6(1) of 2006/115 to be an exception?

"...it must be noted that, although Article 6(1) of Directive 2006/115 — as *a derogation* from the exclusive lending right laid down in Article 1 of that directive — must, according to the Court’s settled case-law, be interpreted strictly, the fact remains that the interpretation given must also enable the effectiveness of *the exception* thereby established to be safeguarded and its purpose to be observed"

Did I overlook something or since when does 'derogation' = 'exception'? I thought this provision allowed for arrangements that derogate from the fully exclusive right (such as extended collective licensing), but does not necessarily mean that it is an exception ( of course, the legislation could be also established via remunerated exception / mandatory collective management). I'm intrigued to hear opinions on this.

@ex-examiner: Sadly, I have to agree that DRM in book software is often easy to circumvent, which will probably only fuel the fire of parties opposing inclusion of e-lending

Vegar Waage said...

Does the decision actually help the libraries in any practical sense?

The CJEU says that «there is no decisive ground allowing for the exclusion, in all cases, of the lending of digital copies and intangible objects from the scope of Directive 2006/115«.

So Member States can implement national legislation that gives public libraries the right to lend out e-books without the author's consent (provided that at least authors obtain a remuneration for such lending).

But how would this work in practice? The libraries still have to (legally) acquire the e-books that they wish to lend out. They can’t go in Pirate Bay and they can’t, as far as I know, make digital copies of books in their collections for such purpose.

So they’ll have to «buy» the said e-books, and in doing so, accept the terms provided for by the author/right holder (because «sale» = «license» with digital copies of works). And since the rental and lending rights are not exhausted through any «any sale or other act of distribution of originals and copies of copyright works», cf. Article 1 (2) in the directive, couldn’t the authors/right holders just include a provision in the terms that blocks the «buyer» from lending out the digital copy? (bearing in mind the «sale»-definition in UsedSoft, exhaustion of lending right seems to be out of the question for e-books).

As far as I can tell, the author would still have the opportunity to block e-lending through the terms that the library would have to accept to acquire e-books they wish to lend out.

… unless the InfoSoc art. 5 (3)c provides an opportunity for Member States to legislate a right for libraries to make the necessary digital copies from the physical copies in their collections?

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