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Key IT Law Developments in the Netherlands

August 31, 1998

In this article we will deal with recent developments in Dutch IT law. Themost recent of these concern e-commerce or, as the Dutch government calls it,‘Doing Business on and via the Electronic Highway’. The Dutch government hasrecently published various reports and other documents on the subject ofe-commerce, and wants the Netherlands to become the ‘Information Gateway toEurope’. However, before detailing the developments a number of other topicswill be dealt with.


Copyright Software Protection


Like all other Member States of the EU, the Netherlands have implemented theEU Directive on Software Copyright Protection. This has resulted in a newchapter (Chapter VI) being added to the Dutch Copyright Act (the Act).Furthermore, software is now explicitly mentioned in the Act (article 10,paragraph 1, number 12). The Dutch legislator added that software cannot beregarded as writings, as defined in article 10, paragraph 1, number 1 of theAct. This is quite surprising since pursuant to the Directive (article 1,paragraph 1) software shall be protected as literary works. Under Dutch law suchworks are always protected, regardless of whether they are original or not, butthis protection is of a more limited nature than that afforded original works.Non-original writings are only protected against direct and slavish copying (`ontlening’),meaning that such copyright is not infringed if the information is gathered byother means. However, since the degree of originality required to obtaincopyright protection is comparatively low under Dutch law, this exclusion doesnot have any serious consequences.


Article 45h of the Act provides that the copying of software which isrequired for loading, running, and using programs, and which is necessary forthe correction of errors, cannot be prohibited. Thus, the Netherlands is theonly Member State which has implemented the 18th recital of the Directive (whichreads: ‘Whereas this means that the acts of loading and running necessary forthe use of a copy of a program which has been lawfully acquired, and the act ofcorrection of its errors, may not be prohibited by contract.’).


The other Member States have followed article 5.1 of the Directive (reading:‘In the absence of specific contractual provisions, the acts referred to inarticle 4(a) and (b) shall not require authorization by the right holder wherethey are necessary for the use of the computer program by the lawful acquirer inaccordance with its intended purpose, including for error correction.’). In ouropinion article 5.1 of the Directive contradicts the 18th recital.1


Protection of CD-ROMS


In a recent case,2 it was held that a CD-ROMcontaining all of the telephone numbers in the Netherlands (including names andaddresses) was not original, but was protected by copyright as a writing. Asmentioned above, this means that any CD-ROM containing non-original informationis protected only against direct and slavish copying. In this case theinfringing party had copied data from a CD-ROM produced by Dutch telecomprovider KPN Telecom BV. (CD-ROMs containing original information are fullyprotected under the Act.)


In another recent case3 three freelancejournalists alleged that a newspaper which had published articles they hadwritten had then infringed their respective copyrights by re-publishing thesearticles on CD-ROM and on the Internet. The Court found that the licence toprint and publish these articles in the newspaper, which had been obtained inthe 1980s, did not include a right to publish them again on these new media. Itstated that when the licences had been granted, the freelance journalistsconcerned could not have foreseen the new means of publication. It should benoted that neither the CD-ROM nor the publications on the Internet were exactcopies of the original newspaper articles. Not only was the lay-out different,but the CD-ROM and the Internet site contained a compilation of variousarticles.


Migration to Other Platform


In August 1995, a Dutch Court4 held thatmigration of software to another operating system constitutes an infringement ofcopyright in the software if the licensee has only obtained a licence to use iton the licensor’s hardware. Furthermore, the Court held that this cannot beregarded as ‘tying’ (which could result in a breach of article 85 of the ECTreaty) since the licensor (Siemens/Nixdorf) had not included this clause toprevent use of its software on competing hardware, but only to ensure that itwas given the opportunity to investigate whether the licensee should pay anupgrade fee.


Domain Names


There seems to be little doubt, both in Dutch case law and literature, thattrademark and tradename legislation (in principle) applies to the use ofInternet domain names. Although an Internet domain name may primarily beconsidered as an Internet address, it is widely accepted that the use of adomain name qualifies as trade„mark and/or tradename use, or – as the casemay be – as trademark and/or tradename infringement.5According to the principles of Netherlands private international law, inprinciple either Benelux trademark law or Nether„ands tradename law applies ifa web site is accessible in the Netherlands.


However, based on the Lexington judgement, rendered by the Hoge Raad in 1964,6one may state that Dutch law is not applicable provided that the web site is notspecifically addressed to the Dutch public. The so-called Lexington doctrine hasnot yet been tested in Dutch case law in Internet-related matters.


Assuming that a domain name infringes a trademark or a tradename, one mayexpect to succeed in an action to:


  • cease and desist the use of the domain name
  • assign the domain name to the trademark owner
  • temporarily re-route the domain name to the domain name of the trademark owner, awaiting assignment of the domain name.7

In the Netherlands the ‘.nl’ top level domain names are attributed by theprivate foundation ‘Stichting Internet Domeinregistratie Nederland’, the Dutchequivalent of Internic in the US, which attributes the .com top level domainnames.


Databases


Pursuant to the EC Directive on the Legal Protection of Databases,8the EU Member States are obliged, before 1 January 1998, to provide forprotection of databases under national law.9 TheNetherlands has not yet met this obligation. Currently (July 1998) a bill ispending for the enactment of database protection. It is believed that, like theEC Directive itself, the new Act will introduce two levels of databaseprotection:


  • a 70-year copyright protection for databases containing either a collection of information or a structure representing the author’s own intellectual creation
  • a 15-year sui generis protection for databases which are not copyrightable but only results from ‘sweat of the brow’.

Copyrightable databases are protected against unauthorised reproduction,whether temporarily or permanently, and distribution. Databases that are notcopyrightable are protected against unauthorised extraction of substantialparts.


Although the Netherlands has not yet complied with the EC Directive onDatabase protection, they can be protected under current Dutch copyright law,provided that the requirements of copyrightability are met. There are threecategories of copyrightable works:


  • the computer program organising and operating the database
  • the data incorporated in the database
  • the structure of the database.

The computer program is protected under the regular software provisions ofthe Dutch Copyright Act. The data as such is not protected. However, acollection of data can either enjoy full copyright protection if it meets theoriginality test, or enjoys protection as a non-original writing. Since undercurrent copyright law these non-original databases are protected only againstslavish copying, the enactment of the pending bill will enlarge the protectionof non-original databases. Finally, the structure of the database can beprotected under current copyright law if it meets the originality test.


Internet


The Internet is a global medium by its very nature. Since IP rights areterritorial rights, dealing with Internet-related issues means dealing withissues of private international law. As regards IP infringements on theInternet, under Dutch private international law the law of the territory inwhich protection is sought will apply. This is the territory where theprotection sought is to have effect.10 Therefore,once a certain web site containing IP infringing information is accessible inthe Netherlands, in principle Dutch IP law can be relied upon. In such cases theDutch courts will have jurisdiction.11 Whethera judgment rendered by a Dutch court is enforceable in other countries willdepend on the existence of relevant multilateral and bilateral treaties.


Under Dutch copyright law, it is generally accepted that disseminatingcopyright-protected information without the authorisation of the copyright ownerconstitutes copyright infringement. Although in case law it has been held thatdissemination through the Internet qualifies both as publishing and asreproducing,12 it is debatable whether anelectronic copy is a reproduction within the meaning of the Dutch Copyright Act,and thus whether the copying for private purposes exception is applicable.


The World Intellectual Property Organisation (WIPO) Copyright Treaty 1996,and the WIPO Performances and Phonogram Treaty 1996,13will further strengthen the copyright and neighbouring right protection on theInternet. For example copyright owners and neighbouring right owners will havethe exclusive right to authorise any communication to the public of their works,by wire or wireless means. This will include making works available to thepublic in such a way that they may access them from a place, and at a time,individually chosen by the individual.14


It is expected that The Netherlands will soon ratify both WIPO Treaties.


Liability of Service and Access Providers


To date (July 1998) there is hardly any Dutch case law on the issue ofliability of Internet service and access providers. There is only one case thatdeals with the question of whether an access provider is liable towards thecopyright owner if copyright infringing information has been disseminatedthrough the computer system of that access provider. In this case,15the court held that, in principle, the access provider is not liable since heonly allows the dissemination of the information, and is unable to influence thecontents thereof (especially since the access provider is in most cases unawareof the contents). According to the judge, only if the information is obviouslyof an unlawful character, and the access provider is aware of this fact, can hebe liable. There is currently a bill pending with respect to the criminalliability of, amongst others, service and access providers.16The basic principle underlying this bill is that they will be granted criminalimmunity if they make available the identity of the persons who used theirfacilities to disseminate the unlawful information.


E-commerce


As stated above, the Dutch government wishes the Netherlands to become one ofthe leading countries in e-commerce, and the ‘Information Gateway toEurope’. As early as 1994 the government published a ‘National ActionProgram on Electronic Highways’, which was recently evaluated. In March 1998,the Ministry of Economic Affairs published an ‘Action Program on E-Commerce’while the Ministry of Justice forwarded a document titled ‘Legislation for theElectronic Highway’ to the Dutch Parliament.


The Dutch Civil Code is, for the better part,technology-independent. This means that the legal barriers one is confrontedwith when doing business via the Internet are limited. To the extent that thesebarriers still exist, the government intends to remove them. Furthermore, itintends to create new statutory provisions, specifically meant for commerce viathe Internet. The basis and guideline for such provisions will be the UNCITRALModel Law on E-Commerce, adopted in December 1996.17


At the request of the Ministry of Economic Affairs, the Dutch AssociationEDIFORUM investigated the possibilities of creating a Code of Conduct fore-commerce, which would be a flexible instrument to bind parties on the basis ofvoluntary subscription. EDIFORUM’s report has been discussed at a recentconference. The participants in the seminar (who were representatives of variousenterprises) welcomed the idea of creating such a Code of Conduct, and theMinistry of Economic Affairs is expected to promote its development.


The technology independence of the Dutch Civil Code means that, amongst otherthings, computers can conclude agreements, without human interference. UnderDutch law, the fact that the computer was programmed to conclude agreements issufficient to create the required consensus. This also means that an agreementis valid and enforceable if a computer mistakenly accepts an offer incircumstances where the offeror neither knew, nor could reasonably be expectedto have known, that the acceptance was made by mistake.


Under Dutch law a statement is considered to take effect upon reaching theaddressee. It is generally held that an e-mail reaches the other side at themoment it is received in his mailbox. Whether or not the e-mail is read is notrelevant. Furthermore, the party who chooses the carrier of the declaration (forexample voicemail, fax or e-mail) bears the risk of deficiencies of this meansof transport. Of course, there are still agreements which cannot yet beconcluded via Internet, like agreements which must be concluded in writing,which must be signed or which are concluded via a notary public.


The Netherlands has an open system of means of evidence. Therefore, evidencemay be given by electronic means. The Dutch Courts may then assert and weighsuch evidence at its discretion.


Although the Dutch Civil Code is technology independent, it is to be expectedthat the next few years will produce some interesting case law.


Millennium


In the Netherlands, there is an encouraging awareness of the problems of themillennium. The Dutch government has installed a Millennium Platform, chaired bythe former President of Philips, Jan Timmer.


Recently, the President of the Amsterdam District Court held that themillennium bug cannot be regarded as a ‘normal bug’ which should becorrected under the maintenance agreement between the parties. However, since itconcerned a dispute between an employer/user of software and one of itsex-employees/developers of software, and since the facts are not clear and thejudgment lacks motivation, it is not expected that this judgment will create aleading precedent.


Whether or not the supplier of software has to repair or replace softwarewhich is not millennium proof depends on many circumstances. These include:


  • The economic and technical life expectancy of the product: product acquired in 1992 which depreciates in ten years, might be expected to be millennium proof, but a product bought in 1992 which depreciates in three years and has a technical lifespan of say five years, might not be expected to be millennium proof.
  • The purpose of the product: for example, mortgage and pension software in the seventies should already have been capable of handling dates after 1999.
  • The state of the art at the moment of acquiring the product: for 30 years almost all software contained dates in two positions. In the 1950s, 1960s and the 1970s this was a useful instrument to limit memory capacity, which was, at that time, very expensive. Some scholars have stated that products which are written in a fourth generation language must be millennium proof. Others have written that one should choose a date on which software should have been millennium proof. All products supplied after such date should then be repaired or replaced at the cost of the supplier. Such a date could be the early 1990s, when Peter de Jager published the first articles on this subject which attracted public attention. The authors believe that if such an approach is to be adopted, there should be a number of different dates applied, depending, amongst others things, on the purpose of the product and its intended lifespan.
  • The expertise of the parties: some users have more expertise than others, which may result in an unsuccessful millennium claim if the user could and should have foreseen the problem.
  • The contents of the agreements: the most important clauses in this respect are on warranty and maintenance. A lot of maintenance agreements define a defect as a deviation from the specifications. The specifications rarely contain a reference to the millennium issue. This may mean that the supplier does not have the obligation to correct the millennium bug.

The Dutch Supreme Court is not expected to render a decisive judgement on themillennium issue before the year 2000.


Endnotes


  1. See Herald D.J. Jongen and Alfred P. Meijboom (EDS), Copyright Software Protection in the EC (Deventer-Boston 1993), page 180.
  2. Judgment 5 December 1996, President of the District Court Almelo, 5 December 1996, Computerrecht 1997, no. 6, page 309.
  3. District Court Amsterdam 24 September 1997, Computerrecht 1997, no. 6, page 324.
  4. President of the District Court’s-Gravenhage, 24 August 1995, Computerrecht 1997, no. 6, page 303.
  5. Judgment of 24 April 1997, Gerechtshof Amsterdam (Ouders van Nu v Ouders on line), 1997 IER, no. 5 and Judgment of 15 May 1997 President Rechtbank Amsterdam (Labouchère et al v IMG Holland), 1997 IER, no. 4, Verkade, Internet-Domeinnamen, Merkenrecht en Handelsnaamrecht, 1997 Computerrecht, no. 1.
  6. Judgment of 3 January 1965, HR, 1964 NJ, no. 445 (Lexington).
  7. Those claims have been granted in (Labouchère et al v IMG Holland, see above.
  8. EC Directive of 11 March 1996 on the Legal Protection of Databases (1996 OJ 77/20) (96/9/EC).
  9. EC Directive on Database Protection, art 16 (1).
  10. See for example, Berne Convention, art 5(2) for copyright and the judgment of 19 November 1993 HR (Stichting COVA v Banque Generale Luxembourg), 1994 NJ, No. 622.
  11. See for example, EEX-Treaty, art 5(3), and Benelux Trademark Act, art 37A (1) for trademarks.
  12. Judgment of 24 September 1997 Rechtbank Amsterdam (Mulder c.s. v Volkskrant), 1997 AMI Informatierecht No. 9.
  13. 1997 Trb No 318, 319: The World Intellectual Property Organization (WIPO) adopted these treaties at its Diplomatic Conference of 20 December, 1996.
  14. WIPO Copyright Treaty, art 8, and WIPO Performances and Phonogram Treaty, arts 10 and 14.
  15. Judgment 12 March 1996, President Rechtbank’s-Gravenhage (Scientology Church v XS4ALL et al) 1996 Mediaforum No. 4.
  16. Not yet reported, however see http://www.minjust.nl
  17. General Assembly Resolution 51/162 of 16 December 1996.