Lending of e-books
According to the CJEU in Case C-174/15 Vereniging Openbare Bibliotheken v Stichting Leenrecht lending
of an electronic book (e-book) may, under certain conditions, be treated in the
same way as the lending of a traditional book. The public lending exception,
which provides inter alia for the fair remuneration of authors, is applicable.
Background
In the Netherlands, the lending of electronic books
by public libraries does not come under the public lending regime applicable to
traditional books. Public libraries make electronic books available to the public
via the internet, on the basis of licensing agreements with right holders.
Vereniging Openbare Bibliotheken (VOB), an association to which every public
library in the Netherlands belongs, contended that the regime for traditional
books should also apply to digital lending. In that context, it brought an
action against Stichting Leenrecht, a foundation entrusted with collecting the
remuneration due to authors, by which it sought a declaratory judgment to that
effect. VOB’s action concerns lending under the ‘one copy, one user’ model,
namely the lending of an electronic book carried out by placing that copy on
the server of a public library and allowing the user concerned to reproduce
that copy by downloading it onto his own computer, bearing in mind that only
one copy may be downloaded during the lending period and that, after that
period has expired, the downloaded copy can no longer be used by that user.
That e-book lending model closely resembles the models with which many in the
UK will be familiar.
Directive 2006/115/EC provides that the exclusive
right to authorise or prohibit rentals and loans belongs to the author of the
work. Member States may, however, derogate from that exclusive right in respect
of public lending, provided that authors obtain, at least, fair remuneration.
The main question for the CJEU was whether that exception applies to the
lending of electronic books under the ‘one copy, one user’ model.
Judgment
The CJEU did not see any reason to exclude the
lending of digital copies and intangible objects from the scope of the
directive; copyright must adapt to new economic developments and exclusion
would run counter to the general principle that a high level of protection is
required for authors.
As to whether the ‘one copy, one user’ model is
capable of coming within the scope of Article 6(1) of the Directive, the Court
recognised the importance of the public lending of digital books and, in order
to safeguard both the effectiveness of the exception for public lending, ruled
that that article may apply where the operation is carried out by a publicly
accessible library since the ‘one copy, one user’ model has essentially similar
characteristics to the lending of printed works.
The Court noted that the Member States may lay down
additional conditions capable of improving the protection of authors’ rights
beyond what is expressly laid down in the directive. In the present case, the
Netherlands legislation requires that the digital copy of a book made available
by the public library must 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 right
of distribution to the public or with that holder’s consent. According to the
Court, such an additional condition must be considered to be in accordance with
the Directive.
Where an electronic copy of a book has been
obtained from an unlawful source, the Court emphasises that one of the
objectives of the directive is to combat piracy and points out that allowing
the lending of such a copy would be liable unreasonably to prejudice copyright
holders. Consequently, the public lending exception does not apply to the
making available by a public library of a digital copy of a book in the case
where that copy has been obtained from an unlawful source.
E-commerce: Prohibitions on Resale and
Jurisdiction
In C-618/15 Concurrence SARL v Samsumg Electronics
France and Amazon Services Europe Sarl, the
Third Chamber of the CJEU was faced with a dispute in proceedings concerning an alleged infringement of
prohibitions on resale outside a selective distribution network and on a
marketplace, by means of online offers on several websites operating in various
Member States.
Concurrence is a retailer of consumer electronics,
trading through a shop located in Paris and on its online sales website
‘concurrence.fr’. It had a selective distribution agreement with Samsung for
the Samsung ELITE range. That agreement included, in particular, a provision
prohibiting the sale of the products in question on the internet. Samsung
accused Concurrence of breaching the selective distribution agreement by
selling the ELITE products on its website. Concurrence contested the legality
of the terms of the contract, alleging inter alia that these were not uniformly
applied to all distributors, some of whom marketed the products in question on
several Amazon websites, without any response from Samsung.
Samsung terminated the agreement with effect from June
2013.
Concurrence instituted proceedings, inter alia with
a view to obtaining an interim order declaring the prohibition on the sale of
the ELITE product range on the internet imposed by the selective distribution
agreement unenforceable against it and requiring Samsung to continue to supply.
Concurrence also brought an action against Amazon with a view to obtaining an
interim order requiring the withdrawal of any offers for sale of a number of
Samsung product models from its Amazon.fr, Amazon.de, Amazon.co.uk, Amazon.es
and Amazon.it websites.
The Commercial Court in Paris held that it did not
have jurisdiction over the Amazon websites operating outside French territory,
found that there was no need for interim measures in connection with
Concurrence’s claims against Samsung and dismissed Concurrence’s claims against
Amazon.
There were unsuccessful appeals. Concurrence claimed
that jurisdiction would legitimately lie with the French court.
The Court of Cassation decided to stay proceedings
and refer the following question to the Court for a preliminary ruling:
‘Is Article 5(3) of Council Regulation (EC)
No 44/2001 to be interpreted as meaning that, in the event of an alleged
breach of a prohibition on resale outside a selective distribution network and
via a marketplace by means of online offers for sale on a number of websites
operated in various Member States, an authorised distributor which considers
that it has been adversely affected has the right to bring an action seeking an
injunction prohibiting the resulting unlawful interference in the courts of the
territory in which the online content is or was accessible, or must some other
clear connecting factor be present?’
The Court, citing Holterman
Ferho Exploitatie and Others, C-47/14, noted that Article 5(3) of Regulation No 44/2001
must be interpreted independently, strictly and that the expression ‘place
where the harmful event occurred or may occur’ in that provision is intended to
cover both the place where the damage occurred and the place of the event
giving rise to it, so that the defendant may be sued, at the option of the
applicant, in the courts for either of those places.
On the facts, the CJEU ruled, first, that the
infringement of the prohibition on resale outside a selective distribution
network is given effect by the law of the Member State of the court seised, so
that a natural link exists between that jurisdiction and the dispute in the
main proceedings, justifying the conferral of jurisdiction on the latter. Second,
it is on the territory of that Member State that the alleged damage occurs.
Indeed, in the event of infringement, by means of a website, of the conditions
of a selective distribution network, the damage which the distributor may claim
is the reduction in the volume of its sales resulting from the sales made in
breach of the conditions of the network and the ensuing loss of profits. The
fact that the websites on which the offer of the products covered by the
selective distribution right appears operate in Member States other than that
of the court seised is irrelevant, as long as the events which occurred in
those Member States resulted in or may result in the alleged damage in the
jurisdiction of the court seised, which it is for the national court to
ascertain.
Digital Publications and VAT
In Case
C-390/15 Rzecznik Praw Obywatelskich (RPO) a request was made for a
preliminary ruling on the validity of a reduced rate
of VAT in relation to the supply of digital books electronically.
The CJEU held that the exclusion of digital books,
newspapers and periodicals from the application of a reduced rate of VAT where
they are supplied electronically is not contrary to the principle of equal
treatment and that the VAT Directive is valid from that point of view.
The CJEU found that the provisions of the VAT
Directive must be regarded as establishing a difference in treatment between
two situations that are comparable in the light of the objective – the
promotion of reading – pursued by the EU legislature when it permitted the
application of a reduced rate of VAT to certain types of books. The Court went
on to examine whether that difference is justified. It points out that a
difference in treatment is justified where it relates to a legally permitted
objective pursued by the measure having the effect of establishing the difference
and is proportionate to that objective. When the EU legislature adopts a tax
measure, it is called upon to make political, economic and social choices, and
to rank divergent interests or undertake complex assessments. Consequently, it
should, in that context, be accorded a broad discretion, so that judicial
review of compliance with such conditions must be limited to review as to
manifest error. Against that background, the Court observes that the ruling out
of the application of a reduced rate of VAT to the supply of digital books
electronically is the consequence of the specific VAT regime for e-commerce. In
the light of the constant developments to which electronic services in their
entirety are subject, it was considered necessary to make electronic services
subject to clear, simple and uniform rules in order that the VAT rate
applicable to them may be established with certainty and, thus, that the
administration of VAT by taxable persons and national tax authorities is
facilitated. By precluding the application of a reduced rate of VAT to
electronic services, the EU legislature spares taxable persons and national tax
authorities from an obligation to examine, for each type of those services,
whether it falls within one of the categories of services that qualify for such
a rate under the VAT Directive. Consequently, such a measure must be regarded
as being appropriate for achieving the objective pursued by the specific VAT
regime for e-commerce. Moreover, to accept that the Member States are able to
apply a reduced rate of VAT to the supply of digital books electronically, as
is permitted for the supply of such books on all physical means of support,
would effectively compromise the overall coherence of the measure intended by
the EU legislature, which consists in the exclusion of all electronic services
from the possibility of a reduced rate of VAT being applied.
Company Registers and the ‘Right to be
Forgotten’
In Case C-398/15 Camera di Commercio,
Industria, Artigianato e Agricoltura di Lecce v Salvatore Manni, the
Court of Justice of the European Union has ruled that there is no general
‘right to be forgotten’ in respect of personal data in a companies register.
However, upon expiry of a sufficiently long period after dissolution of the
company concerned, Member States may provide for restricted access to such data
by third parties in exceptional cases.
In 2007, Mr Salvatore Manni, a director of a
company which was awarded a contract for the construction of a tourist complex
in Italy, brought an action against the Lecce Chamber of Commerce. In his view,
the properties in the complex were not sold because it was clear from the
companies register that he had been the administrator of another company that
went bankrupt in 1992 and was wound up in 2005.
The Court of Lecce ordered the Lecce Chamber of
Commerce to anonymise the data linking Mr Manni to the liquidation of the first
company and to pay compensation for the damage suffered by Mr Manni. The Lecce
Chamber of Commerce brought an appeal against that judgment before the Corte
suprema di cassazione, which decided to refer several questions to the Court of
Justice for a preliminary ruling. The Italian Court asked whether the Data
Protection Directive and the Directive on disclosure of company documents
(First Council Directive 68/151/EEC of 9 March 1968) preclude any person from
accessing, without any time limit, data relating to natural persons set out in
the companies register.
The CJEU noted that the public nature of company
registers is intended to ensure legal certainty in dealings between companies
and third parties and to protect, in particular, the interests of third parties
in relation to joint stock companies and limited liability companies, since the
only safeguards they offer to third parties are their assets. The Court further
notes that matters requiring the availability of personal data in the companies
register may arise for many years after a company has ceased to exist. Having
regard to (1) the range of legal rights and relations which may involve a
company with actors in several Member States (even after its dissolution), and
(2) the diversity of limitation periods provided for by the various national
laws, it seems impossible to identify a single period after which the entry of
the data in the register and their disclosure would no longer be necessary. In
those circumstances, Member States cannot guarantee that natural persons whose
data are included in the company register have the right to obtain, after a
certain period of time from the dissolution of the company, the erasure of
personal data concerning them.
The Court considered that any interference with the
fundamental rights of the persons concerned
is not disproportionate insofar as (1) only a limited number of personal
data items are entered in the company register and (2) it is justified that
natural persons who choose to participate in trade through such a joint stock
company or limited liability company, whose only safeguards for third parties
are the assets of that company, should be required to disclose data relating to
their identity and functions within that company. The Court did not exclude
possible exceptions access to personal data concerning a person should be
limited, upon expiry of a sufficiently long period after the dissolution of the
company in question, to third parties who can demonstrate a specific interest
in consulting that data. Such limitation of access to personal data must be
based on a case-by-case assessment. Each Member State must decide if it wants
such a limitation of access in its national legal system.
On the facts in Manni,
the Court considered that the mere fact that the properties of the tourist
complex do not sell because potential purchasers have access to the data of Mr
Manni in the companies register cannot justify a limitation of access by third
parties to that data, in particular given the legitimate interest of those
purchasers in availing of that information.
