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CJEU lends itself to the digital age

The CJEU recently ruled that the lending of an electronic book (an e-book) may, under certain conditions, be treated in the same way as the lending of a traditional book.

The CJEU recently ruled in Vereniging Openbare Bibliotheken v Stichting Leenrecht, C-174/15 that the lending of an electronic book (an e-book) may, under certain conditions, be treated in the same way as the lending of a traditional book i.e. the concept of 'lending', within the meaning of the Rental and Lending Directive (2006/115) also covers digital lending. In such a situation, the public lending exception under Article 6(1) of the directive, which provides (amongst other things) for the fair remuneration of authors, applies. 

Background

In the Netherlands, the lending of e-books by public libraries does not fall under the public lending regime that applies to traditional books. Public libraries currently make electronic books available to the public via the internet, on the basis of licensing agreements with rightsholders.

In this case, Vereniging Openbare Bibliotheken ("VOB") (the association that all public libraries belong to in the Netherlands) took the view that the regime for traditional books (explained below) should also apply to digital lending. It brought an action against Stichting Leenrecht (Dutch collecting society for the remuneration due to authors from library lending) seeking a declaratory judgment to that effect.

VOB’s action concerned lending e-books under the "one copy, one user" model which is where the lending of an electronic book is carried out by placing that copy on the server of a public library and allowing the borrower to reproduce that copy by downloading it onto his own computer, taking into account that only one copy may be downloaded during the lending period and after that period has expired, the downloaded copy can no longer be used by that person. In basic terms the "one copy, one user" model blocks a library from lending out more than one copy of an e-book at a time.

The Law

The Rental and Lending Directive provides that the exclusive right to authorise or prohibit rentals and loans belongs to the author of the work. However, under Article 6(1) of that directive, Member States can derogate from that exclusive right in respect of public lending, provided that at least authors obtain a remuneration for such lending.

The question that was therefore referred to the CJEU from the Rechtbank Den Haag (The Hague District Court) was whether the public lending of a digital copy of a book under the "one copy, one user" model was capable of falling within the scope of the exception i.e. could a public library lend e-books to library users on a 'one copy, one user' basis, provided the author was in some way remunerated.

The CJEU Ruling

The CJEU concluded that the concept of 'lending' within the meaning of the directive also covers digital lending. In coming to its conclusion, the CJEU ruled that:

  • there is no decisive ground that allows for the lending of digital copies and intangible objects to be excluded from the scope of directive, especially when considering one of the main objectives of the directive is to allow copyright to adapt to 'new economic developments'. In addition, to exclude digital lending from the scope of the directive would go against the general principle of rewarding authors with a high level of protection.
  • the 'one copy, one user' model was capable of falling within the Article 6 lending exception, especially given the importance of public digital lending and also to ensure that the exception remains effective and enables the promotion of culture.

The CJEU also ruled that Member States are able to lay down additional conditions, beyond those expressly laid down in the directive, in order to improve the protection of authors' rights. The example given was that under Dutch law, the digital copy of a book made publicly available by a library, must have been put into circulation by a first sale or other transfer of ownership of that copy in the EU by or with the consent of the rightsholder. The Article 6 public lending exception does not apply to situations where a digital copy of a book has been obtained from an unlawful source.  

Comments

Whilst this judgment is a good decision for libraries and authors in that it attempts to strike a balance between rewarding authors for their works at the same time as allowing libraries to develop in the e-lending arena, it seems that publishers are not so enamoured with the ruling and have concerns about the implications for the emerging e-books market and how the ruling will impact on current lending practices . The Federation of European Publishers (the FEP) stated that it was shocked by the decision and the law should distinguish clearly between physical and electronic goods and services and treat them differently. The FEP's view is that '"Lending" an e-book is very different from lending a printed book since digital "lending" in fact means copying. One digital copy can for example potentially be "borrowed" by an indefinite number of users, whereas a physical copy can only be borrowed and read by one person at a time....' The FEP went on to say that it will be "difficult to compete in a market in which virtually the identical product is available for free."  

Those industries which feel they have been negatively affected by the ruling are currently considering the ruling and how it may affect them. It seems that this may not be the final chapter in the e-lending series.  

   

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