Implementation games: how to make CMOs fit for the future?
Efforts to implement the CRM Directive (2014/26/EU) have started and quite interestingly the UK Intellectual Property Office launched a consultation on the implementation yesterday.
Artposters - not about digital exhaustion, but what about digital exhaustion?
TL;DR: Argh, the CJEU doesn't want to talk about digital exhaustion. But what does that mean for digital exhaustion? Probably that we have to wait for another case. And that starting a second-hand service for digital products might still be risky biz in Europe after all.
Last week, the CJEU delivered its decision in C-419/13 Art & Artposters, a much-awaited copyright case dealing with the exhaustion principle.
The defendant, Allposters, sold through its website posters and other reproductions depicting the works of famous painters. Besides others, Allposters used authorised posters of copyright-protected artworks to transfer images from those paper posters to canvas. The image from the paper posters disappears during this technical process.
The claimant, Pictoright, a Dutch collective management organisation, which administers the exploitation of copyright of the artworks, opposed the sale of “canvas transfers” reproducing works protected by copyright without the consent of its clients.
The CJEU had to answer inter alia the referred question whether the exhaustion principle of the distribution right set out in Article 4(2) of Directive 2001/29 applies in a situation where a reproduction of a copyright-protected work, after having been marketed in the EU with the rightholder’s consent, has undergone an alteration of its medium, and is placed on the market again in its new form.
In its decision, the CJEU held that the exhaustion rule set out Article 4(2) of Directive 2001/29 does not apply in the case because
“the consent of the copyright holder does not cover the distribution of an object incorporating his work if that object has been altered after its initial marketing in such a way that it constitutes a new reproduction of that work. In such an event, the distribution right of such an object is exhausted only upon the first sale or transfer of ownership of that new object with the consent of the right holder”
(para 46, C-319/13 Art & Allposters)
The court also took a closer look at the wording of the exhaustion principle in Article 4(2) referring to “that object” (para 34) and recital 28 to “tangible article” (para 39). The CJEU concludes that “it should be found that exhaustion of the distribution right applies to the tangible object into which a protected work or its copy is incorporated if it has been placed onto the market with the copyright holder’s consent” (para 40).
So it's not about digital exhaustion - but what about digital exhaustion?
Whereas the court’s decision does not contain an explicit obiter dictum and even though the present case deals with physical objects, the interpretations of Article 4(2) of Directive 2001/29 might impact on the question whether the Directive allows for the exhaustion of digital goods, as Eleonora Rosati comments on the IPKat blog (http://ipkitten.blogspot.dk/2015/01/breaking-news-cjeu-says-exhaustion-only.html) too. In 2012, the CJEU has answered this question in relation to computer software in C-128/11 Used Soft, where it applied the lex specialis norms of the Software Directive and spurred debates about the applicability to digital goods within the 14-year-old InfoSoc Directive.
A recently published Draft report by the European Parliament's rapporteur Julia Reda on the implementation of Directive 2001/29/EC from 15 January 2015, does not explicitly mention the exhaustion principle (it does, however, broadly talk limitations and exceptions). Also, in an internal draft for a white paper from 2014, the European Commission noted “policy initiatives on the exhaustion principle would seem premature at this stage”.
Thus, a further judicial clarification of the exhaustion rule in relation to intangible (digital) goods and the InfoSoc Directive seems still very topical. Allposters is not really guiding us the way (considering the broad variety of argumentations the court comes up with e.g. in UsedSoft - everything is open?).
Nevertheless, it might be a great idea for the lawmakers to take a look at digital exhaustion as well when examining the "teenage"-InfoSoc Directive.
The full CJEU decision can be found here: http://curia.europa.eu/juris/document/document_print.jsf?doclang=EN&text=&pageIndex=0&part=1&mode=lst&docid=161609&occ=first&dir=&cid=188744
What do folks think - would you start a second-hand service for digital products right now?
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