November 14, 2016

Further, the CJEU said, the public lending exception, which provides for the fair remuneration of authors, is applicable to e-books in the same way it is to traditional books.

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

In the Netherlands, the lending of e-books by public libraries does not come under the public lending regime applicable to traditional books. At present, public libraries make e-books available to the public via the internet, on the basis of licensing agreements with rights holders.

Vereniging Openbare Bibliotheken, an association to which every public library in the Netherlands belongs, argued that the regime for traditional books should also apply to digital lending. It issued proceedings against the authors’ collecting society, Stichting Leenrecht, seeking a declaratory judgment to that effect. VOB’s action concerned lending under the “one copy, one user” model, whereby the e-book to be loaned is placed on the library’s server so that a single user can download it onto his own computer. Only one copy can be downloaded during the lending period and, after that period has expired, the downloaded copy can no longer be used by that user.

The District Court of The Hague in the Netherlands referred a number of questions to the CJEU. The main question was whether the derogation under Article 6(1) also applied to the lending of e-books under the “one copy, one user” model.

The CJEU noted that there was no decisive ground allowing for the exclusion of the lending of digital copies and intangible objects from the scope of the Directive, since the objective of the Directive was that copyright should adapt to new economic developments. In addition, excluding digital lending from the scope of the Directive would run counter to the general principle that a high level of protection is required for authors.

The CJEU said that, given the importance of the public lending of digital books, and in order to safeguard both the effectiveness of the exception for public lending under Article 6(1) and the contribution of that exception to the promotion of culture, it could not be ruled out that Article 6(1) might apply where the lending by a library of an e-book had essentially the same characteristics as the lending by that library of printed works. The concept of “lending”, within the meaning of the Directive, therefore also covered lending under the “one copy one user” model.

The CJEU also noted that Member States can legislate to improve the protection of authors’ rights beyond what is expressly set out in the Directive. In this case, the Netherlands legislation required that the digital copy of a book made available by a public library had to have been put into circulation by a first sale or other transfer of ownership of that copy in the EU by the holder of the distribution right to the public or with that holder’s consent. In the CJEU’s view, this additional condition was in accordance with the Directive.

As for the situation where an electronic copy of a book has been obtained from an unlawful source, the CJEU emphasised that one of the objectives of the Directive was to combat piracy. Allowing the lending of an unlawful copy would prejudice copyright holders. Therefore, the public lending exception did not apply to the making available by a public library of a digital copy of a book where that copy had been obtained from an unlawful source. (Case C-174/15 Vereniging Openbare Bibliotheken v Stichting Leenrecht (10 November 2016) — to access the judgment in full, go to the curia search form, type in the case number and follow the link).