In a judgment[i] issued on 19 December 2019, the Court of Justice (CJEU) has confirmed that readers may not pass on eBooks ‘second hand’ without the authorisation of the copyright holder. This principle will also apply to music and video content sold by permanent download online.
The dispute - should an eBook be treated the same as a hard copy book?
The defendant, Tom Kabinet Internet BV, ran an internet platform that bought second hand eBooks from official distributors and others and resold them to individuals registered on its site. It argued that buying an eBook by download online was functionally equivalent to buying it on a tangible medium and that the buyer should be entitled to sell the book on as they would with a CD or a hard copy book. According to Tom Kabinet it made no sense for the situation to be different just because the book had been downloaded in digital form.
By contrast, the claimants, who were Netherlands publishers’ associations, pointed out that when you sell a hard copy book second hand or pass on a CD, the buyer receives something old and potentially dog-eared, whereas an eBook which has been transferred digitally is a perfect copy. Allowing eBooks to be transferred freely in this manner would make it difficult for authors and publishers to obtain fair remuneration.
Goods or services?
The dispute came before the District Court of The Hague, which referred questions to the Court of Justice (CJEU). It asked essentially whether an eBook sold by download online should be treated as equivalent to tangible goods, which could be bought and sold freely second hand, or whether it should be regarded as a service with the result that the copyright holder’s consent would be needed to any transfer by the purchaser.
CJEU backs the copyright holder
The Court came down on the side of the author and publisher, holding that the sale of an eBook by download online was not equivalent to the sale of a tangible copy. The buyer may not transfer the book to a third party without the consent of the copyright holder.
Implications of the decision
The decision will effectively outlaw platforms such as Tom Kabinet’s in the EU, forcing them to adjust their models. The copyright holder or publisher’s consent will be required for any ‘second hand’ sale or transfer of an eBook which has been supplied by permanent download online. In practice, eBook publishers often allow limited sharing and lending of eBooks in any event and police this by use of DRM protection mechanisms. There is no reason why this should not continue. The same principle is likely to apply to video and music downloads. Streaming services, which are already treated as a service, should be unaffected. In each case, circumvention of the DRM mechanisms may be treated as copyright infringement.
The decision clarifies a point which has been uncertain and confirms the copyright holder’s right to control their digital content. It may also be seen as an indication that the Court is conscious of the need to give sufficient weight to the copyright owner’s interests on the internet more generally.
Software and exception
However, the Court treats software as an exception, suggesting that this is an area where second hand sales may continue to be permitted. This issue is likely to be revisited by the CJEU in the near future in response to questions submitted by the UK Supreme Court in the case of Computer Associates v The Software Incubator[ii].
What about Brexit?
CJEU case law on such matters is likely to continue to apply in the UK after Brexit, during any transition period and after that until it is overridden by a decision of the English courts. In this case, the decision is in any event largely in tune with traditional UK approaches to copyright.