The sale of second-hand e-books through a website constitutes “a communication to the public” which requires authorisa­tion by the author of the books in question, the Court of Justice of the European Union has recently affirmed.

EU law obliges member states to ensure that authors are granted the exclusive right to authorise or prohibit any communication to the public of their works. This includes making their works available to the public in such a way that members of the public may access them when and where they choose.

The same law also makes provision for a single EU-wide rule to provide authors with the exclusive right to authorise or prohibit any distribution to the public of their works or copies thereof. Such a distribution right is exhausted within the EU where the first sale or first other transfer of ownership in the EU of a work is made by the right holder or with his consent.

The facts of this case were briefly as follows. Two associations, set up with the objective of defending the interests of publishers based in the Netherlands, applied to the national court for an injunction in order to prohibit the operator of a website from selling second-hand e-books to members of the ‘reading club’ supported by the said website or from reproducing such books. They claimed that such activities infringe publishers’ copyright in these e-books since by offering ‘second-hand’ e-books for sale to members of the reading club without the authors’ consent, the website operator was making an unauthorised communication of such books to the public.

The website operator rebutted that such activities are covered by the distribution right which, in terms of EU law, is subject to a rule of exhaustion if the relevant object has been sold in the EU by the right holder or with his consent. This means that, once the publishers sold the e-books at issue, they would no longer have the exclusive right to authorise or prohibit the distribution of those e-books to the public.

The Court observed that the supply by downloading, for permanent use, of an e-book is not covered by the right of “distribution to the public” but rather falls under the right of “communication to the public”. This, therefore, means that the doctrine of exhaustion alluded to by the defendant does not apply.

The doctrine of exhaustion alluded to by the defendant does not apply

The Court affirmed that the EU legislature intended the rule of exhaustion to be reserved for the distribution of tangible objects, such as books on a material medium. The application of the rule of exhaustion to e-books would be detrimental to the interests of right holders to obtain an appropriate reward much more than in the case of books on a material medium, the Court asserted.

This is so since digital copies of e-books do not deteriorate with use and are, therefore, perfect substitutes for new copies on any second-hand market.

The Court went on to clarify that the concept of ‘communication to the public’ should be understood in a broad sense, including all communication to members of the public who are not present at the place where the communication originates. Thus, any transmission or retransmission of a work to the public by wire or wireless means is covered. The Court then went on to examine the two cumulative criteria which must be satisfied for there to be said to be a communication to the public, namely, an act of communication of a work and the communication of that work to a public.

As regards the first criterion, the critical act is the “making available of the work to the public”. This includes the offering of a work on a publicly accessible site, which precedes the stage of its actual “on-demand transmission”. The fact as to whether any person actually retrieved the work in question is irrelevant. Thus the making available of the works concerned to anyone who is registered with the reading club’s website must be considered a ‘communication’ of a work, irrespective of whether such members availed themselves of the opportunity by actually retrieving the e-book from the website.

As regards the second criterion, account should be taken not only of the number of persons able to access the same work at the same time, but also as to how many of them may access it in succession. The Court noted that in this case, the number of persons who may have access, at the same time or in succession, to the same work via the reading club’s platform is substantial. Hence, the work in question ought to be regarded as being communicated to a public.

The Court went on to explain that, in order to be categorised as a communication to the public, a protected work must be communicated using specific technical means, different from those previously used or be communicated to a new public, that is, to a public not already taken into account by the copyright holders when they authorised the initial communication of their work to the public.

With reference to the case under examination, the Court observed that the making available of an e-book is generally accompanied by a user licence authorising only the user who has downloaded the relevant e-book to read it from his/her own equipment. This means that a communication such as that made by the operator of the website is made to a public that was not already taken into cognisance by the copyright holders and, therefore, to a new public.

Intellectual property rights including copyright, serve to ensure that their holders are appropriately compensated for efforts and money invested in order to come up with something innovative. Ensuring that no one takes a free ride over the efforts made by others safeguards not only the right holder themselves but also ascertains that individuals or companies are enticed to invest in innovation and creativity for the benefit of society at large.

Mariosa Vella Cardona M’Jur, LL.D., is a freelance legal consultant specialising in European law as well as competition law, consumer law, data protection law and intellectual property law. She is also a visiting examiner at the University of Malta.