VOB-Leenrecht Judgement
Summary of the judgement of the Court of Den Haag of 1 April 2015 (VOB v Stichting Leenrecht)
Judgement in the case of de Vereniging van Openbare Bibliotheken (VOB; the Association of Public Libraries)
Against
Stichting Leenrecht (Leenrecht; Foundation for Lending Rights)
Intervenient parties:
- Nederlands Uitgeversverbond (NUV; the Dutch Union of Publishers)
- Stichting Lira (Lira; Foundation for Literary authors)
- Stichting Pictoright (Pictoright; Foundation for Visual authors)
The dispute
VOB claimed three declaratory judgments, holding (in short) that:
1. The term ‘lending’, as defined in the Dutch Copyright Act (DCA) and the Rental and Lending Rights Directive, includes the making available of a copy of an e-book for a limited time through downloading without a direct or indirect economic or commercial benefit (e-lending). (lending right also applies to e-lending)
2. ‘Transfer of ownership’, as defined in the Dutch Copyright Act (DCA) and the Copyright Directive includes the making available of a copy of an e-book from a distance for an indefinite amount of time. (exhaustion of distribution right applies to e-books)
3. The making available for a limited time through downloading without a direct or indirect economic or commercial benefit (e-lending) of a copy of an e-book does not constitute an infringement of copyright. (e-lending falls under lending exception)
The NUV has put forward a defense against all three claims and filed a counterclaim for a declaratory judgment that permission should always be asked from the right holder if an e-book is made available through e-lending . Lira and Pictoright have put forward a defense against (in particular) the second claim. They have inter alia argued that for lending rights to apply to e-lending, it is not required that the distribution right of an e-book is exhausted. Lira and Pictoright have also filed a counterclaim entailing that the exhaustion rule does not apply to e-books. Lira and Pictoright also filed a conditional counterclaim regarding the conditions that should be applied if the court would in fact rule that lending rights would apply to e-lending.
Leenrecht did not take a position in the case and has deferred to the discretion of the court.
Considerations of the court
The court first ruled that VOB has no interest in a separate decision on the first and second claim. The court therefore denies the first two claims. However, in order to rule on the third claim it is necessary to rule on the two subquestions that VOB has attached to that question (which are the same as the first two claims).
Lending?
The court determines that the question whether e-lending should qualify as ‘lending’ within the meaning of the Rental and Lending rights Directive should be submitted to the European Court of Justice as a prejudicial question. The court considers that the answer to this question does not follow from existing jurisprudence of the Court of Justice (not an acte éclairé), and the right interpretation is not clear from the text in the Rental and Lending Rights Directive (not an acte clair). The court also takes into consideration that an unambiguous answer to this question cannot be found in the legislative history of the Directive, and that opinions differ about whether or not e-lending would be functionally equivalent to the lending of a physical copy of a book.
The court considers it appropriate to ask the prejudicial question at this stage (in first instance), since the case cannot be solved without a ruling on this matter.
Exhaustion required?
The court then takes into consideration whether or not the lending exception can only apply to works of which the distribution right is exhausted (as the VOB had argued). The court considers that the text of the Rental and Lending rights Directive does not imply that exhaustion is necessary. Considering the objective of combatting piracy, a requirement that the lent copy has been obtained from a legitimate source may perhaps be needed. However, the court considers that it is difficult to see why the application of lending rights should depend on the question whether the copyright of the author is exhausted.
Yet, the Dutch Copyright Act states that the lending exception only applies to copies of the work that have lawfully been released into circulation. The court considers that the Dutch legislator apparently had a reason to incorporate this requirement. Therefore, the court sees cause anyway to ask a prejudicial question on this subject as well.
Copyright exhausted?
If it would be so that lending rights only apply when the distribution right to a work is exhausted, the last question is whether or not the making available of a copy of an e-book for an indefinite amount of time would exhaust the distribution right. The court considers that the text of the Copyright Directive states that the exhaustion doctrine does not apply to digital works. On the other hand, in its UsedSoft judgment the European Court of Justice ruled that the making available of a copy of a computer program can lead to exhaustion of the distribution right. The court therefore considers that it will ask a (conditional) prejudicial question about this issue as well (in case the Court of Justice would rule that exhaustion is indeed relevant).
The judgment
The court has decided to ask the following prejudicial questions:
1. Should the Articles 1(1), 2(2)(b) and 6(1) of Directive [2006/115] be interpreted in such a manner that “lending” as referred to in those Articles also means to include the making available for use not for direct or indirect economic or commercial advantage through an establishment which is accessible to the public of copyright protected novels, collections of stories, biographies, travel journals, children’s books and children’s literature
- by placing a copy in digital form (reproduction A) on the server of the establishment and by
enabling a user to reproduce this copy on his own computer (reproduction B)
by downloading,
- whilst the copy made by the user while downloading (reproduction B) is no longer usable
after a limited period of time, and
- whilst other users cannot download the copy (reproduction A) on their computer during
that period?
2. Should question 1. Be answered affirmatively, does Article 6 of Directive 2006/115 and / or any other provision of European Union law preclude that Member States apply the condition to the use of the exception mentioned in Article 6 of Directive 2006/115 that the copy of the work (reproduction A) made available by the establishment has been put into circulation by a first sale or other transfer of ownership of that copy within the Union by its rights holder or with his consent as meant in Article 4(2) of Directive 2001/29?
3. Should question 2. be answered negatively, does Article 6 of Directive 2006/115 place any other demands on the origin of the copy (reproduction A) made available for use by the establishment, such as the demand that the copy has been derived from a legal source?
4. Should question 2. be answered affirmatively, should Article 4(2) of Directive [2001/29] be interpreted in such a manner that a first sale or other transfer of ownership of material as meant there also includes the making available for use a digital copy of copyright protected novels, collections of stories, biographies, travel journals, children’s books and children’s literature for an unlimited period of time by means of enabling downloading from distance?
The case is registered by the European Court of Justice under number C-174/15.
