Copyright: E-books and the Rental and Lending Right Directive

Advocate General opinion

The background

The Rental and Lending Right Directive (2006/115/EC) (the Directive) provides that the exclusive right to authorise or prohibit rentals and loans belongs to the author of the work. Under Article 6(1), however, member states can derogate from that exclusive right in respect of public lending, provided that authors obtain, at least, fair remuneration.

Case C-174/15 Vereniging Openbare Bibliotheken v Stichting Leenrecht arises from a dispute between Vereniging Openbare Bibliotheken (VOB), an association to which every public library in the Netherlands belongs, and a foundation entrusted with collecting the remuneration for lending which is due to authors. In VOB’s view, libraries should be entitled to lend electronic books included in their collections according to the principle “one copy one user”. This envisages the possibility for a library user to download an electronic copy of a work included in the collection of a library with the result that - as long as that user “has” the book - it is not possible for other library users to download a copy. Upon expiry of the e-lending period, the electronic copy downloaded by the first user becomes unusable, so that the book in question can be e-borrowed by another user.

The District Court in The Hague referred the case to the Court of Justice of the European Union (CJEU) seeking guidance as to whether the making available to the public, for a limited period of time, of electronic books by public libraries falls within the scope of the lending right enshrined in Article 1 of the Directive.

The Dutch court also questioned whether the exception under Article 6(1) could be made subject to a requirement that the copy of the electronic book made available by the library has been put into circulation by a first sale or other transfer of ownership of that copy in the EU by the right holder or with his consent, within the meaning of Article 4(2) of the Copyright Directive (2001/29/EC). If so, the court further asked whether the making available to the public of an electronic book does constitute such a first sale or other transfer of ownership.

The development

Advocate General Szpunar (the AG) has given an opinion that the lending right in Article 1 of the Directive includes the making available to the public electronic books by libraries for a limited period of time. Member states that wished to introduce the derogation in Article 6, from the exclusive lending right for public lending, must ensure that the way it was carried out did not in conflict with the normal exploitation of the works and did not unreasonably prejudice the authors’ legitimate interests.

In reaching this conclusion, the AG accepted that at the time the Directive was adopted, the EU legislature had not intended to include the lending of electronic books in the concept of lending. However, the AG considered that it was important to interpret legal acts taking into account developments in technology, markets and behaviour. This was particularly important in fields where technological progress had a profound effect, such as copyright. This interpretation would not only be in the public interest of access to science and culture, but also in authors’ interest. Additionally, it would not be contrary to the wording or general structure of the legal texts currently in force, including the Copyright Directive. In this regard, the AG referred to Case C-128/11 UsedSoft GmbH v Oracle International Corp where the CJEU had interpreted “copy” as including digital copies.

The AG also considered that Article 6 did not preclude member states from requiring that electronic books, which were lent under that derogation, should first have been made available to the public by the right-holder or with its consent, provided that this did not restrict the scope of the derogation.

Why is this important?

The AG has given the Directive a broad interpretation and taken a practical approach. Given that the objective of the Directive is to ensure that authors are fairly remunerated for the exploitation of their works, his interpretation does appear sensible, especially for the “one copy one user” model.

It is worth noting that in the UK, the Article 6(1) exception only applies to ebooks downloaded in public libraries and not to lending carried out remotely to home PCs. The number of ebooks made available for publishers for lending in public libraries is, however, limited. Libraries will be disappointed but e-publishers will be relieved that the purchase of an ebook does not amount to exhaustion of the author’s rights under the Directive.

What’s next?

Keep an eye out for developments in this area – the AG opinion is not binding on the CJEU (although the CJEU does often reach the same conclusion as an AG).