In a recent decision (Dimensione Direct Sales srl and Michele Labianca v Knoll International SpA, C-516/13), the CJEU has ruled that the right of distribution under Directive 2011/29 (the EU Copyright
In a recent decision (Dimensione Direct Sales srl and Michele Labianca v Knoll International SpA, C-516/13), the CJEU has ruled that the right of distribution under Directive 2011/29 (the EU Copyright Directive) may be infringed by the advertising or offer for sale of protected works, even if it isn't established that any works were sold. This appears to be a departure from the Court's prior jurisprudence and seems to extend the scope of the distribution right. It also sits uncomfortably with the established position under the copyright law of some member states, notably, the UK.
Background
This case concerned a dispute between two Italian companies, Dimensione Direct Sales Srl (Dimensione) and Knoll International SpA (Knoll) over Dimensione's alleged infringement resulting from offers for sale of reproductions of furniture protected by German copyright through a targeted advertising campaign in Germany. Knoll is part of the Knoll group, headquartered in the United States, which manufactures and sells high end furniture worldwide. Knoll's products include iconic designs such the 'Wassily' chair and 'Laccio' tables designed by Marcel Breuer and Ludwig Mies van der Rohe's 'Cantilever' chair.
In 2005 and 2006 Dimensione advertised furniture similar to Knoll's on its German website, in various German language newspapers, magazines, and in an advertising brochure. Knoll brought an action before the Courts in Hamburg seeking an order prohibiting Dimensione from offering the infringing furniture for sale in Germany. The matter was contested at several levels of the German courts before the following questions were referred to the CJEU for clarification:
If so,
The CJEU's decision
The CJEU answered all of these questions in the affirmative, finding that the Copyright Directive:
"must be interpreted as meaning that it allows a holder of an exclusive right to distribute a protected work to prevent an offer for sale or a targeted advertisement of the original or a copy of that work, even if it is not established that that advertisement gave rise to the purchase of the protected work by an EU buyer, in so far as that advertisement invites consumers of the Member State in which that work is protected by copyright to purchase it".
In its reasoning the CJEU drew on its earlier comments in Cases C-5/11 Titus Alexander Jochen Donner and C-98/13 Martin Blomqvist v Rolex SA, Manufacture des Montres Rolex SA, where it had been held that 'distribution to the public is characterised by a series of acts going, at the very least, from the conclusion of a contract of sale to the performance thereof by delivery to a member of the public'. The CJEU therefore extrapolated that use of the phrase 'at the very least' meant that steps preceding the conclusion of a contract of sale may also fall within the concept of distribution. A non-binding advertisement for a protected object also falls under the series of acts taken with the objective of making a sale of that object. A trader who directs his advertising at members of the public in a Member State and creates or makes available to them a specific delivery system and payment method and enables members of the public to receive delivery of copies of works protected in that Member State, makes, in the Member State where the delivery takes place, a ‘distribution to the public’ under the Copyright Directive.
The CJEU justified its position by noting that the Copyright Directive was intended to provide a high level of protection to copyright owners. The CJEU also relied on the fact the Directive was intended to implement the WIPO Copyright Treaty (WCT) in the EU and must therefore be interpreted in accordance with the WCT. This means that the ‘distribution to the public ... by sale’ in the Directive must be given the same meaning as the expression ‘making available to the public … through sale’ in the WCT.
The ruling could be interpreted as a departure from CJEU's position in earlier cases such as Case C-456/06 Peek & Cloppenburg KG v Cassina SpA, in which the Court had held that a 'distribution to the public … applies only where there is a transfer of the ownership of that object'. The CJEU, however, addressed this precedent with the comment:
"although it is true that .... the concept of distribution to the public of the original of a work or a copy thereof .... entails a transfer of the ownership of that object, the fact remains that an infringement of the distribution right can be observed where consumers located in the territory of the Member State in which that work is protected are invited, by targeted advertising, to acquire ownership of the original or a copy of that work".
Importance of the decision
This new CJEU decision appears to extend the scope of the distribution right and make it easier for copyright owners to stop the distribution of copies, with evidence of actual sales no longer be required.
It is also worth noting that the scope of the distribution right in the decision appears to be at odds with the right of distribution under UK law. Section 18 of the Copyright, Designs and Patents Act 1988 defines the distribution right as the right to ‘issue to the public of copies of the work’, which is ‘the act of putting into circulation’ by or with the consent of the copyright owner copies of works not previously put into circulation. Up until now, it has generally been understood that the act of offering or exposing copies for sale does not amount to putting copies into circulation. It appears that the CJEU's recent decision may now throw this position into doubt.
Background
This case concerned a dispute between two Italian companies, Dimensione Direct Sales Srl (Dimensione) and Knoll International SpA (Knoll) over Dimensione's alleged infringement resulting from offers for sale of reproductions of furniture protected by German copyright through a targeted advertising campaign in Germany. Knoll is part of the Knoll group, headquartered in the United States, which manufactures and sells high end furniture worldwide. Knoll's products include iconic designs such the 'Wassily' chair and 'Laccio' tables designed by Marcel Breuer and Ludwig Mies van der Rohe's 'Cantilever' chair.
In 2005 and 2006 Dimensione advertised furniture similar to Knoll's on its German website, in various German language newspapers, magazines, and in an advertising brochure. Knoll brought an action before the Courts in Hamburg seeking an order prohibiting Dimensione from offering the infringing furniture for sale in Germany. The matter was contested at several levels of the German courts before the following questions were referred to the CJEU for clarification:
- Does the distribution right under Article 4(1) of The Copyright Directive include the right to offer the original or copies of the work to the public for sale?
If so,
- Does the right to offer the original or copies of the work to the public for sale include not only contractual offers, but also advertising measures?
- Is the distribution right infringed even if no purchase of the original or copies of the work takes place on the basis of the offer?
The CJEU's decision
The CJEU answered all of these questions in the affirmative, finding that the Copyright Directive:
"must be interpreted as meaning that it allows a holder of an exclusive right to distribute a protected work to prevent an offer for sale or a targeted advertisement of the original or a copy of that work, even if it is not established that that advertisement gave rise to the purchase of the protected work by an EU buyer, in so far as that advertisement invites consumers of the Member State in which that work is protected by copyright to purchase it".
In its reasoning the CJEU drew on its earlier comments in Cases C-5/11 Titus Alexander Jochen Donner and C-98/13 Martin Blomqvist v Rolex SA, Manufacture des Montres Rolex SA, where it had been held that 'distribution to the public is characterised by a series of acts going, at the very least, from the conclusion of a contract of sale to the performance thereof by delivery to a member of the public'. The CJEU therefore extrapolated that use of the phrase 'at the very least' meant that steps preceding the conclusion of a contract of sale may also fall within the concept of distribution. A non-binding advertisement for a protected object also falls under the series of acts taken with the objective of making a sale of that object. A trader who directs his advertising at members of the public in a Member State and creates or makes available to them a specific delivery system and payment method and enables members of the public to receive delivery of copies of works protected in that Member State, makes, in the Member State where the delivery takes place, a ‘distribution to the public’ under the Copyright Directive.
The CJEU justified its position by noting that the Copyright Directive was intended to provide a high level of protection to copyright owners. The CJEU also relied on the fact the Directive was intended to implement the WIPO Copyright Treaty (WCT) in the EU and must therefore be interpreted in accordance with the WCT. This means that the ‘distribution to the public ... by sale’ in the Directive must be given the same meaning as the expression ‘making available to the public … through sale’ in the WCT.
The ruling could be interpreted as a departure from CJEU's position in earlier cases such as Case C-456/06 Peek & Cloppenburg KG v Cassina SpA, in which the Court had held that a 'distribution to the public … applies only where there is a transfer of the ownership of that object'. The CJEU, however, addressed this precedent with the comment:
"although it is true that .... the concept of distribution to the public of the original of a work or a copy thereof .... entails a transfer of the ownership of that object, the fact remains that an infringement of the distribution right can be observed where consumers located in the territory of the Member State in which that work is protected are invited, by targeted advertising, to acquire ownership of the original or a copy of that work".
Importance of the decision
This new CJEU decision appears to extend the scope of the distribution right and make it easier for copyright owners to stop the distribution of copies, with evidence of actual sales no longer be required.
It is also worth noting that the scope of the distribution right in the decision appears to be at odds with the right of distribution under UK law. Section 18 of the Copyright, Designs and Patents Act 1988 defines the distribution right as the right to ‘issue to the public of copies of the work’, which is ‘the act of putting into circulation’ by or with the consent of the copyright owner copies of works not previously put into circulation. Up until now, it has generally been understood that the act of offering or exposing copies for sale does not amount to putting copies into circulation. It appears that the CJEU's recent decision may now throw this position into doubt.