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“Digital” Exhaustion and the EU (Digital) Single Market

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EU Internet Law in the Digital Era

Abstract

A reference for a preliminary ruling on the applicability of exhaustion of the right of distribution under the Copyright Directive to e-books reached the Court of Justice of the European Union (CJEU), putting copyright exhaustion once again under the spotlight in the EU. In light of the Court’s tendency to extend the scope of the right of communication to the public to include any act remotely related to a protected work, the reference is of uttermost importance for drawing the boundaries of copyright protection online. While the topic of “digital” exhaustion is intriguing from the perspective of copyright law, it is no less thought-provoking in the context of the internal market. Even before the copyright harmonisation took off, the CJEU used the principle to facilitate the functioning of the internal market by eliminating the impediments to the free movement of goods within the EU. The subsequent copyright harmonisation of exhaustion under the acquis relied largely upon the CJEU rulings weighting the objectives of the internal market with that of national copyright laws. Accordingly, the Court’s ruling in the case is not only a matter of copyright but also a matter of the internal market. This chapter seeks to place the issue at stake in its broader context. Namely, it discusses whether extending the applicability of exhaustion to the acts of online dissemination would contribute to the Digital Single Market (DSM). It suggests that the “digital” exhaustion has a potential to advance the DSM. However, its role would be rather different from the one exhaustion had in the analogue internal market, which shall be accounted for.

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Notes

  1. 1.

    The research leading to this contribution has been supported by the Estonian Research Council grant PUT PRG 124.

  2. 2.

    Yusuf and von Hase (1992), pp. 115–131; for the EU law perspective, see Schovsbo (2010), p. 10.

  3. 3.

    Katz (2014), p. 55.

  4. 4.

    For instance, introducing exhaustion rule avoids the conflict between the exclusive rights under the copyright and property right in a tangible object in which a work is embodied.

  5. 5.

    Among the questions raised was the possible extension of the exclusive rights to the online environment and their limits. The issue was extensively discussed during the Negotiations on the Possible Protocol to the Berne Convention, which led to the adoption of the WIPO Copyright Treaty and WIPO Performances and Phonograms Treaty.

  6. 6.

    Inter alia, the exhaustion of the right of distribution enables a secondary market and competition between the platforms. See more in Rubí Puig (2013), pp. 160–162.

  7. 7.

    On the original intent behind harmonising the exhaustion on the EU level, see Jehoram (1994), pp. 821–840. On the usage of exhaustion in the context of competition law, see Gallego (2003), pp. 479–502.

  8. 8.

    Cook (2010), p. 357.

  9. 9.

    Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions. A Digital Single Market Strategy for Europe COM(2015) 192 final.

  10. 10.

    CJEU, Nederlands Uitgeversverbond and Groep Algemene Uitgevers. Case C 263/18.

  11. 11.

    Gotzen (1990), p. 300; Yusuf and von Hase (1992), p. 116; Tjin Tai (2003), p. 207; Karapapa (2014), p. 307; Rognstad (2014), p. 1. On importation, see Slotboom (2003), p. 422 and Schovsbo (2010), pp. 3–4.

  12. 12.

    The view also found in Lucas (2010), p. 306.

  13. 13.

    Confining exhaustion to a smaller range of acts triggering its application ultimately results in the expansion of the scope of the exclusive right.

  14. 14.

    Most jurisdictions provided the right of distribution that was limited to the first distribution either through the exhaustion principle or other instruments (such as implied license). The territoriality of exhaustion, on the other hand, varied greatly and impaired the cross-border trade.

  15. 15.

    Longdin Lim (2013), p. 544; Gotzen (1990), p. 299.

  16. 16.

    Committee of Experts on a Possible Protocol to the Berne Convention (1991) First Session. Questions concerning a possible protocol to the Berne Convention Part II. (Draft). Memorandum prepared by the International Bureau, p. 20.

  17. 17.

    For example, it depends on a state’s trade policy on parallel importation.

  18. 18.

    Yusuf and von Hase (1992), p. 116; Slotboom (2003), pp. 421–440.

  19. 19.

    Agreement on Trade-Related Aspects of Intellectual Property Rights, adopted in Marrakesh on 15 April 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1C (TRIPs).

  20. 20.

    Yusuf and von Hase (1992), p. 130.

  21. 21.

    World Intellectual Property Office Copyright Treaty, adopted on Dec. 20, 1996, WIPO Doc. CRNRIDC/94 (WIPO Copyright Treaty).

  22. 22.

    See comment made by the delegation of Singapore in Records of the Diplomatic Conference on Certain copyright and neighbouring rights questions (1999). WIPO Publication, vol II, no 348, p. 613.

  23. 23.

    CJEU, Deutsche Grammophon Gesellschaft mbH v Metro-SB-Großmärkte GmbH & Co. KG, Case C 78/70, Judgment of 8 June 1971; CJEU, Musik-Vertriebmembran GmbH and K-tel International v GEMA, Joined cases C 55/80 and C 57/80, Judgment of 20 January 1981; CJEU, Dansk Supermarked A/S v A/S Imerco, Case C 58/80, Judgment of 22 January 1981.

  24. 24.

    CJEU, Polydor Limited and RSO Records Inc v Harlequin Records Shops Limited and Simons Records Limited, Case C 270/80, Judgment of 9 February 1982.

  25. 25.

    CJEU, Warner Brothers Inc and Metronome Video ApS v Erik Viuff Christiansen Case C 158/86, Judgment of 17 May 1988.

  26. 26.

    CJEU, EMI Electrola GmbH v Patricia Im- und Export and others, Case C 341/87, Judgment of 24 January 1989.

  27. 27.

    As elaborated by Westkamp (2007), pp. 319–320.

  28. 28.

    Cistaro (2016), p. 141.

  29. 29.

    Ramahlo (2014), p. 208.

  30. 30.

    Ibid, p. 224.

  31. 31.

    Westkamp (2007), p. 292.

  32. 32.

    Ibid, p. 322.

  33. 33.

    Ibid, p. 329.

  34. 34.

    Directive 2009/24/EC of the European Parliament and of the Council of 23 April 2009 on the legal protection of computer programs (Codified version), OJ L 111/16 (Software Directive).

  35. 35.

    For the discussion, see Committee of Experts on Model provisions for legislation in the field of copyright. First Session. Draft model provisions for legislation in the field of copyright. Memorandum prepared by the International Bureau. III Comments on the draft model provisions for legislation in the field of copyright. CE/MPC/I/2-III 1989. p. 20.

  36. 36.

    Gotzen (1990), p. 299.

  37. 37.

    Council Directive 92/100/EEC of 19 November 1992 on rental right and lending right and on certain rights related to copyright in the field of intellectual property, OJ L 346/61.

  38. 38.

    Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society. OJ L 167/10 (Copyright Directive).

  39. 39.

    Ibid, Art. 4.2.

  40. 40.

    Proposal for a European Parliament and Council Directive on the harmonisation of certain aspects of copyright and related rights in the Information Society COM (97) 628 final, p. 27.

  41. 41.

    Opinion on the proposal for a Council Directive on the legal protection of computer programs. Economic and Social Committee 89/C 329/02.

  42. 42.

    Green Paper on Copyright and Related Rights in the Information Society. European Commission COM (95) 382 final, p. 47.

  43. 43.

    International Federation of the Phonographic Industry (2019).

  44. 44.

    For instance, on the scope of the right of communication to the public. See Cook (2015), Leistner (2015), Hugenholtz and van Velze (2016), Quintais (2018) and Ohly (2018).

  45. 45.

    More on digital exhaustion see Linklater (2014), Rognstad (2014), Spedicato (2015), Savic (2015b), Hilty (2015) and Mysoor (2018).

  46. 46.

    On Agreed Statement precluding application of exhaustion online, see Savic (2015b), Rognstad (2014) and Karapapa (2014).

  47. 47.

    Records of the Diplomatic Conference on Certain copyright and neighboring rights. Draft Agreed Statements concerning Treaty NO. 1 submitted by Main Committee I to the Conference, meeting in Plenary. CRNR/DC/92 Corr. 1996. p. 2.

  48. 48.

    Records of the Diplomatic Conference on Certain copyright and neighboring rights questions (1999). p. 777.

  49. 49.

    Geiger (2015), p. 424.

  50. 50.

    Ficsor (2002), p. 486.

  51. 51.

    CJEU, Art & Allposters International BV v Stichting Pictoright, Case C 419/13, Judgment of 22 January 2015. On precluding digital exhaustion see Rosati (2015) and Savic (2015a).

  52. 52.

    For a detailed analysis see Griffiths (2016). Also, Sganga (2018).

  53. 53.

    Other rights are not affected by the exhaustion, as well as any new forms of exploitation. For instance, consider rental of distributed copies, subject to authorisation, although the exhaustion allows further resale of copies. See Warner Brothers Inc and Metronome Video ApS v Erik Viuff Christiansen, par. 14.

  54. 54.

    Art & Allposters International BV v Stichting Pictoright, par. 40. See also the comment on Ranks&Vasilevics below.

  55. 55.

    On the CJEU applying technology-neutral approach see Linklater-Sahm (2017), p. 1556; on exhaustion and neutrality Synodinou (2012), pp. 624–625.

  56. 56.

    CJEU, UsedSoft GmbH v Oracle International Corp, Case C 128/11, Judgment of 3 July 2012.

  57. 57.

    CJEU, Aleksandrs Ranks, JurijsVasiļevičs v Microsoft Corp, Case C 166/15, Judgment of 12 October 2016.

  58. 58.

    CJEU, VerenigingOpenbareBibliotheken v StichtingLeenrecht, Case C 174/15, Judgment of 10 November 2016.

  59. 59.

    UsedSoft GmbH v Oracle International Corp, par. 38.

  60. 60.

    UsedSoft GmbH v Oracle International Corp, par. 44–46.

  61. 61.

    UsedSoft GmbH v Oracle International Corp, par. 47.

  62. 62.

    UsedSoft GmbH v Oracle International Corp, par. 53–63.

  63. 63.

    Aleksandrs Ranks, JurijsVasiļevičs v Microsoft Corp, par. 34. This is contrary to what the CJEU seems to indicate in Art&Allposters case, holding that the exhaustion applies to a tangible medium on which a copy is fixed. See Art & Allposters International BV v Stichting Pictoright, par. 40.

  64. 64.

    The subsequent acquirer shall be able to download a copy from a vendor’s webpage, see Aleksandrs Ranks, JurijsVasiļevičs v Microsoft Corp, par. 54.

  65. 65.

    See, for example, Colby (2017), Wolk (2017), Geiregat (2017), Leistner and Antoine (2018) and Sganga (2018).

  66. 66.

    See, for example, Linklater (2014) and Rognstad (2014), pp. 4–9.

  67. 67.

    Savic (2015b), p. 426; Hilty (2015), p. 10.

  68. 68.

    Rognstad, for instance, criticised the Court for not putting aside the right of distribution and recalling inexhaustibility of the right of communication to the public. In his view, the CJEU could use alternative methods for enabling acquirers of software to dispose of it, for example based on the impediment on the free movement of goods under the TFEU Treaty. See Rognstad (2014), p. 15.

  69. 69.

    Vereniging Openbare Bibliotheken v Stichting Leenrecht, par. 44.

  70. 70.

    Also as stressed out by Linklater (2014), p. 1565.

  71. 71.

    On the preceding reports, see Jütte (2017), pp. 79–89.

  72. 72.

    COM(2015), 192 final, p. 7.

  73. 73.

    Ibid, pp. 3–4.

  74. 74.

    Regulation (EU) 2018/302 of the European Parliament and of the Council of 28 February 2018 on addressing unjustified geo-blocking and other forms of discrimination based on customers’ nationality, place of residence or place of establishment within the internal market and amending Regulations (EC) No 2006/2004 and (EU) 2017/2394 and Directive 2009/22/EC, OJ L 60I/1; Regulation (EU) 2017/1128 of the European Parliament and of the Council of 14 June 2017 on cross-border portability of online content services in the internal market, OJ L 168/1; Directive (EU) 2019/770 of the European Parliament and of the Council of 20 May 2019 on certain aspects concerning contracts for the supply of digital content and digital services. OJ L 136/1.

  75. 75.

    Guibault (2016), pp. 207–227.

  76. 76.

    More on the point in the context of e-books in Oprysk et al. (2017), pp. 133–135.

  77. 77.

    On the role of exhaustion for economic freedoms in the DSM, see Cistaro (2016), p. 134.

  78. 78.

    More on this aspect see Mysoor (2018), pp. 677–683.

  79. 79.

    Hojnik (2016), p. 83.

  80. 80.

    CJEU, Nederlands Uitgeversverbond and Groep Algemene Uitgevers, Case C 263/18.

  81. 81.

    Among others, Schulze (2014), Savic (2015b) and Rosati (2015).

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  1. IT Law Programme, University of Tartu, Tartu, Estonia

    Liliia Oprysk

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    Tatiana-Eleni Synodinou

  2. School of Law, European University Cyprus, Nicosia, Cyprus

    Philippe Jougleux , Christiana Markou  & Thalia Prastitou ,  & 

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Oprysk, L. (2020). “Digital” Exhaustion and the EU (Digital) Single Market. In: Synodinou, TE., Jougleux, P., Markou, C., Prastitou, T. (eds) EU Internet Law in the Digital Era. Springer, Cham. https://doi.org/10.1007/978-3-030-25579-4_7

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  • DOI: https://doi.org/10.1007/978-3-030-25579-4_7

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  • Publisher Name: Springer, Cham

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  • Online ISBN: 978-3-030-25579-4

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