Dutch courts apply UsedSoft rule of law for reselling e-books
- Transfer
On January 20, the Netherlands Court of Appeal (Hof Amsterdam) issued its preliminary judgment in the Tom Kabinet case . In this decision, the court determined whether the rule defined by the EU Court in the case of UsedSoft is applied to e-books. Without providing a final decision, the court determined that it considered it perfectly admissible that the exhaustion of rights defined in Art. 4 (2) of Directive 2001/29 / EC also applies to intangible goods such as electronic books.
Tom Kabinet is a Dutch company that has launched its second-hand e-book business. The owner of the e-book can sell his copy of the book using the company's website. For the sale of used e-books, the owner, agreeing to accept the standard terms of use of the service, confirms that a copy of the book was legally acquired by him. He also states that he will delete his copy of the book. Tom Kabinet does not have any means to verify these allegations of users for their truth, but the company has the right to add the code to the downloadable copy of the book. This code allows you to track a specific copy, so Tom Kabinet can prevent attempts to sell the same copy of a book more than once. Tom Kabinet stated that the rule determined by the Court of Justice of the EU in the case of UsedSoft, extends its effect to electronic books, and thus the activities of the company are completely legal.
The Netherlands Publishers Association has demanded that Tom Kabinet discontinue its e-book resale service. Publishers have stated that e-books cannot be resold because they are intangible goods. The trial court ruled in favor of Tom Kabinet . However, the Court of Appeal ruled that the website should cease to function, as it allows you to sell copies that were obtained through illegal means. If Tom Kabinet introduces a system on the service that will prevent such cases of offering to sell illegal copies of books, the service will be able to continue its business.
The court considered whether the rule of the UsedSoft case is applicable to this case. This is not a final decision on the issue, however, it reflects a clear tendency to recognize that the rules for the circulation of electronic books become similar to the rules for the circulation of paper books (or software in the cited case).
The court ruled that it is not clear from the rule of the UsedSoft case whether the exhaustion of rights applies to e-books. He ruled that the owner of an e-book receives the right to use the copy for an unlimited amount of time in exchange for paying a cost that reflects the economic value of a copy of the work - as in UsedSoft. On the other hand, the court determined that paragraphs 28 and 29, stated in the declarative part of Directive 2001/29 / EC, indicate that Article 4 (2) of the Directive is applicable only to tangible goods. Moreover, the court stated that the special provision of Article 5 (1) of Directive 2009/24 / EC , which permits the copying of a work for this purpose, is not applicable to copyright in general.
These arguments against the possibility of exhaustion of rights do not oblige the court to prohibit the resale of electronic books. In addition, the EU Court took the economic approach from UsedSoft, drawing attention to the practical similarities of tangible and intangible goods, adding to this the fact that the copyright holder receives a certain fee on the first sale. In light of this, the court took into account the possibility of Tom Kabinet's activities within the framework of European law. The court determined that Tom Kabinet should be forced to close its service as part of a simplified procedure, since it is not at all clear how the court, when considering the case on the merits, intended to oblige the company to cease its activities and refrain from it in the future. Thus, the court unanswered the question of whether whether Tom Kabinet’s reselling e-books is a legitimate activity under European law or not. Despite this uncertainty, the court did not consider it necessary to forward the relevant issues to the EU Court, as he considered only the issue of determining legal norms of simplified proceedings.
From a procedural point of view, the decision looks really fair. In the simplified procedure, the court is not entitled to take measures that may go beyond the framework of the simplified proceedings. Bearing this in mind, the court expects that there will be an exhaustion of rights in respect of objects in electronic form within the European Union, or at least expects the Court to come to this conclusion. The Court noted that the EU Court did not answer the question to what extent and how the rule from the UsedSoft case could be applied in such a case. It was further stated that, assuming a common position with other rules of the Court of Justice of the EU, resale of intangible goods is permitted.
In March 2013, a German court determined that Article 4 (2) of Directive 2001/29 / EC was not applicable to downloads (Case No. 4 O 191/11, Landgericht (German Regional Court) Bielefeld, 5 March 2013). A German court ruled that the rule in the UsedSoft case is not applicable to e-books, since they are not subject to Directive 2009/24 / EC. However, a Dutch court issued the opposite decision. Two opposing points of view of the two EU member states clearly demonstrate that the EU Court still has to make a decision on this issue.
As a result, with respect to Tom Kabinet, a decision was made to terminate its activities to assist in the sale of e-books, since such assistance is assistance in the sale of illegal copies. If the Company finds for itself a way to prevent this phenomenon, it will be entitled to apply to the court for permission to resume its activities. Therefore, at the moment, according to Dutch law, article 4 (2) of Directive 2001/29 / EC also applies to electronic books.
Tom Kabinet is a Dutch company that has launched its second-hand e-book business. The owner of the e-book can sell his copy of the book using the company's website. For the sale of used e-books, the owner, agreeing to accept the standard terms of use of the service, confirms that a copy of the book was legally acquired by him. He also states that he will delete his copy of the book. Tom Kabinet does not have any means to verify these allegations of users for their truth, but the company has the right to add the code to the downloadable copy of the book. This code allows you to track a specific copy, so Tom Kabinet can prevent attempts to sell the same copy of a book more than once. Tom Kabinet stated that the rule determined by the Court of Justice of the EU in the case of UsedSoft, extends its effect to electronic books, and thus the activities of the company are completely legal.
The Netherlands Publishers Association has demanded that Tom Kabinet discontinue its e-book resale service. Publishers have stated that e-books cannot be resold because they are intangible goods. The trial court ruled in favor of Tom Kabinet . However, the Court of Appeal ruled that the website should cease to function, as it allows you to sell copies that were obtained through illegal means. If Tom Kabinet introduces a system on the service that will prevent such cases of offering to sell illegal copies of books, the service will be able to continue its business.
The court considered whether the rule of the UsedSoft case is applicable to this case. This is not a final decision on the issue, however, it reflects a clear tendency to recognize that the rules for the circulation of electronic books become similar to the rules for the circulation of paper books (or software in the cited case).
The court ruled that it is not clear from the rule of the UsedSoft case whether the exhaustion of rights applies to e-books. He ruled that the owner of an e-book receives the right to use the copy for an unlimited amount of time in exchange for paying a cost that reflects the economic value of a copy of the work - as in UsedSoft. On the other hand, the court determined that paragraphs 28 and 29, stated in the declarative part of Directive 2001/29 / EC, indicate that Article 4 (2) of the Directive is applicable only to tangible goods. Moreover, the court stated that the special provision of Article 5 (1) of Directive 2009/24 / EC , which permits the copying of a work for this purpose, is not applicable to copyright in general.
These arguments against the possibility of exhaustion of rights do not oblige the court to prohibit the resale of electronic books. In addition, the EU Court took the economic approach from UsedSoft, drawing attention to the practical similarities of tangible and intangible goods, adding to this the fact that the copyright holder receives a certain fee on the first sale. In light of this, the court took into account the possibility of Tom Kabinet's activities within the framework of European law. The court determined that Tom Kabinet should be forced to close its service as part of a simplified procedure, since it is not at all clear how the court, when considering the case on the merits, intended to oblige the company to cease its activities and refrain from it in the future. Thus, the court unanswered the question of whether whether Tom Kabinet’s reselling e-books is a legitimate activity under European law or not. Despite this uncertainty, the court did not consider it necessary to forward the relevant issues to the EU Court, as he considered only the issue of determining legal norms of simplified proceedings.
From a procedural point of view, the decision looks really fair. In the simplified procedure, the court is not entitled to take measures that may go beyond the framework of the simplified proceedings. Bearing this in mind, the court expects that there will be an exhaustion of rights in respect of objects in electronic form within the European Union, or at least expects the Court to come to this conclusion. The Court noted that the EU Court did not answer the question to what extent and how the rule from the UsedSoft case could be applied in such a case. It was further stated that, assuming a common position with other rules of the Court of Justice of the EU, resale of intangible goods is permitted.
In March 2013, a German court determined that Article 4 (2) of Directive 2001/29 / EC was not applicable to downloads (Case No. 4 O 191/11, Landgericht (German Regional Court) Bielefeld, 5 March 2013). A German court ruled that the rule in the UsedSoft case is not applicable to e-books, since they are not subject to Directive 2009/24 / EC. However, a Dutch court issued the opposite decision. Two opposing points of view of the two EU member states clearly demonstrate that the EU Court still has to make a decision on this issue.
As a result, with respect to Tom Kabinet, a decision was made to terminate its activities to assist in the sale of e-books, since such assistance is assistance in the sale of illegal copies. If the Company finds for itself a way to prevent this phenomenon, it will be entitled to apply to the court for permission to resume its activities. Therefore, at the moment, according to Dutch law, article 4 (2) of Directive 2001/29 / EC also applies to electronic books.