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Grand Chamber of the Court of Justice rules on whether e-books can be re-sold


Tom Kabinet Internet BV operates a service at which enables users to re-sell lawfully acquired e-books to members of a book club as ‘second hand books’. It was sued in Holland by two associations of Dutch publishers who sought a declaratory judgment that by making e-books available and/or by reproducing them Tom Kabinet infringed copyright in the books.

The Dutch Court referred a series of questions concerning the distribution and reproduction rights and whether they were exhausted in circumstances where the rightholder has been found to have already received remuneration equivalent to the economic value of the work. In effect the questions ask whether copyright exhaustion applies to resale of e-books in a way that is analogous to the resale of physical books. The case is important because the same principles could be said to apply to downloads of music and films with the result that users are free to resell their digital purchases.

The Grand Chamber of the Court (Judges Lenaerts, Silva de Lapuerta, Arabadjiev, Prechal, Vilaras, Xuereb, Rossi, Jarukaitis, Juhász, Ilešič (rapporteur), Malenovský, Lycourgos and Piçarra) has ruled earlier today that re-selling books does result in an infringement of copyright.

It began its judgment by reformulating the questions referred to it to answer a different question of whether the download, for permanent use, of an electronic book amounts to an act of distribution or whether it falls within the concept of “communication to the public” within Article 3 of the Copyright Directive. In respect of distribution the Court found that the Usedsoft decision is not applicable because the provisions relating to computer software are lex specialis and do not have more general application. The Court then went on to rule that the sale of books on a material medium and e-books cannot be considered equivalent from an economic and functional point of view.

In its ruling it held that downloading an e-book is, however, covered by the “communication to the public” and “making available” rights under Article 3 of the Copyright Directive.

Tom Kabinet has responded to the judgment stating that the Court has “…overlooked the fact that we actively enforce one-copy one-user and therewith come to a conclusion that is not in our advantage. It's up to the Hague's court to check the facts now and set it straight.”

This decision in the Tom Kabinet case is unusually the fourth landmark decision of the Grand Chamber on copyright and related rights this year. Earlier the Court ruled on the role of the Charter of Fundamental Rights and its relationship with Member States’ discretion when implementing directives and, among other things, whether sampling a section of Kraftwerk’s 1977 recording of Metall auf Metall in a new song amounted to infringement – see Cases C-517/17 Spiegel Online, C-476/17 Pelham, and C-469/17 Funke Medien.

The judgment is here.

Nicholas Saunders QC acted for the United Kingdom instructed by the Cabinet Office in all of these cases.