On 10 November 2016, the Court of Justice of the European Union ("ECJ") held that, under comparable lending schemes, public libraries may lend out e-books on the same conditions as those applicable to the lending of physical books (ECJ, 10 November 2016, Case C‑174/15, Vereniging Openbare Bibliotheken v. Stichting Leenrecht).
The ECJ delivered its judgment in response to a request for a preliminary ruling from the Dutch District Court of the Hague (Rechtbank Den Haag) in proceedings between the public library association Vereniging Openbare Bibliotheken ("VOB") and the lending foundation Stichting Leenrecht ("the Stichting").
In the case at hand, a dispute arose between the VOB and the Stichting about the interpretation of Article 15c of the Dutch copyright law which provides that lending of all or part of a copy of a literary, scientific or artistic work, or a reproduction thereof, put into circulation by the right holder or with his consent, does not constitute an infringement of the copyright in that work, provided that fair remuneration is paid by the person who carries out that lending. The question at issue was whether public libraries are allowed to lend out e-books in the same way as they lend out physical books, i.e. without a dedicated license. The dispute related to the lending of the digital copy of a book, carried out by placing it on the server of the public library and allowing the user concerned to reproduce that copy by downloading it onto his own computer, bearing in mind that only one copy may be downloaded during the lending period and that, after that period has expired, the downloaded copy can no longer be used by that user.
The right to lend physical books is regulated by Directive 2006/115/EC of the European Parliament and of the Council of 12 December 2006 on rental right and lending right and on certain rights related to copyright in the field of intellectual property (the "Directive"), and in particular by its articles 1(1), 2(1)(b) and 6(1). Article 1(1) of the Directive, which provides that "Member States shall provide (...) a right to authorise or prohibit the (...) lending of originals and copies of copyright works, and other subject matter (...)", does not specify whether the concept of 'copies of copyright works', within the meaning of that provision, also covers copies which are not fixed on a physical medium, such as digital copies. In addition, Article 2(1)(b) of that directive defines 'lending' as "making available for use, for a limited period of time and not for direct or indirect economic or commercial advantage, when that lending is made through establishments which are accessible to the public". Finally, Article 6(1) provides that "Member States may derogate from the exclusive right provided for in Article 1 in respect of public lending, provided that at least authors obtain a remuneration for such lending. Member States shall be free to determine this remuneration taking account of their cultural promotion objectives".
The case was submitted to the District Court of the Hague, which decided to stay the proceedings and question the ECJ on the scope of these articles.
The ECJ started by analyzing whether there would be grounds to justify the exclusion of the lending of digital copies and intangible objects from the scope of the Directive. In this regard, it noted that neither the World Intellectual Property Organization Copyright Treaty ("WIPO Treaty") nor the original directive on rental right and lending right (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), preclude the concept of 'lending' from being interpreted as also including lending carried out digitally. The Court therefore concluded that there is no decisive ground allowing for the exclusion of the lending of digital copies and intangible objects from the scope of the Directive.
The ECJ then went on to address the permissibility of additional conditions laid down in the national legislation for the application of the public lending exception.
It first noted that Member States may require that digital copies of a book made available by public libraries have been put into circulation by a first sale or other transfer of ownership of that copy in the European Union by the holder of the right of distribution to the public or with his consent. This additional condition improves the protection of authors' rights in the implementation of the lending exception and is therefore in accordance with Article 6(1) of the Directive.
The ECJ also held that Article 6(1) of the Directive does not allow the public lending exception to apply to the making available by a public library of a digital copy of a book stemming from an unlawful source.
It follows that the digital lending of an electronic book falls within the scope of the exception foreseen by the Dutch copyright law which provides that lending does not constitute an infringement of the copyright in that work, on condition that fair remuneration be paid by the lender.
The case will now go back to the national court, which must deliver a decision in line with the ECJ's interpretation of the Directive.
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