© Denis Kadackii – Fotolia.com

ECJ: No right to resell “used” e-books

The European Court of Justice ruled in its judgment of 19.12.2019 (Case C-263/18) that it is not permitted to resell "used" e-books without the permission of the rights holder.

The ball was set rolling by a lawsuit filed by two Dutch publishers’ associations: Nederlands Uitgeversverbond and Groep Algemene Uitgevers originally applied to a court in The Hague (the “Rechtbank Den Haag”) for the Dutch company Tom Kabinet Internet BV to no longer be allowed to make “used” e-books available on its online platform. This was therefore an action for an injunction.

Reselling used e-books after reading them

Tom Kabinet enabled its members to buy and sell “used” e-books as part of a so-called “reading club”. Customers who bought an e-book from Tom Kabinet were asked to sell it back to Tom Kabinet after reading it and to delete their own version.

Distribution or communication to the public?

At the heart of the dispute – which the Amsterdam Court of Appeal, which has since heard the case, referred to the ECJ – was the question of whether Tom Kabinet’s activities constituted a so-called “distribution to the public” (Art. 4 para. 1 of EU Directive 2001/29) or a “communication to the public” (Art. 3 para. 1 of the Directive).

If it constitutes distribution, the so-called “principle of exhaustion” would apply: a copy that has been legally sold once could then be resold as often as desired within the Union. The consent of the rights holder – in particular the author – would no longer be necessary.

In cases of communication to the public, however, the principle of exhaustion applies pursuant to Art. Art. 3 para. 3 of the Directive explicitly does not apply. Here, the consent of the rights holder is required for each individual communication to the public. And this is exactly what Tom Kabinet did not have.

E-books are to be treated differently to physical books

In its decision, the ECJ stated that it considers this to be a communication to the public. The court has thus sided with the publishers’ associations and significantly strengthened the rights of authors and rights holders. There are two main reasons for the decision.

On the one hand, the directive itself serves to implement a copyright treaty of the World Intellectual Property Organization (WIPO). The ECJ concluded from both this treaty and the documents of the Union legislators that the exhaustion rule was intended exclusively for tangible objects.

On the other hand, transferring the exhaustion rule to e-books would jeopardize the interests of authors and rights holders too much. Because e-books do not deteriorate, but represent a permanent and perfect copy, there would no longer be any incentive to buy “new” e-books. Also, an e-book could theoretically be resold indefinitely and an infinite number of times because it is not subject to wear and tear.

Several users in succession are also a “public”

Another problem was the question of whether it is a “communication to the public” if only one user at a time reads an e-book. Tom Kabinet had explicitly asked its users to delete their own copies.

In its ruling, the ECJ clarifies that the term “communication to the public” is to be understood broadly. The criterion of publicity cannot only be fulfilled if several users receive access at the same time. Rather, it is also sufficient if a significant number of users access the same e-book one after the other.

Amsterdam Court of Appeal still has to make a final decision

The ECJ has thus clarified the relevant legal issues. It is now up to the Court of Appeal in Amsterdam to examine whether all the requirements for a communication to the public have been met in this case. The ruling itself significantly strengthens the position of authors and rights holders and is also likely to affect all other digital second-hand markets.

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