EBLIDA briefing on the e-lending judgement of the CJEU19 January 2017
[ PDF version ]
Case C-174/15 - CJEU ruling of 10 November 2016
Vereniging Openbare Bibliotheken (VOB) v Stichting Leenrecht
EBLIDA Briefing Note, January 2017
[Compiled with the assistance of EBLIDA's Expert Group on Information Law]
DISCLAIMER - The following information does not constitute legal advice.
The Court of Justice of the European Union (CJEU) ruled in November 2016 that library lending of electronic books (e-books) may, under certain conditions, be treated in the same way as the library lending of paper books.
1. At the heart of this Dutch case is the question whether public libraries need a licence permitting them to lend e-books, or whether they can lend them without a licence in the same way as they lend physical books in their collections.
2. The CJEU (hereafter ‘the Court’) was asked by the Dutch court, Rechtbank Den Haag, to answer 4 questions concerning interpretation of Articles 1, 2 and 6 of the Rental and Lending Directive 2006/115/EC and Article 4 of the Information Society Directive 2001/29/EC.
3. Taken together, in effect the questions put to the Court were askingwhether the Rental and Lending Directive permits libraries to lend e-books in their collections and, if yes, under what conditions.
4. In answer to Question 1, the Court decided that “Article 1(1), Article 2(1)(b) and Article 6(1) of Directive 2006/115 must be interpreted as meaning that the concept of ‘lending’, within the meaning of those provisions, covers the lending of a digital copy of a book, where that lending is carried out by placing that copy on the server of a public library and allowing a user 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.”
⇨ The Court said that ‘lending’ in the Rental and Lending Directive does include certain kinds of e-lending if the lending is compliant with the Directive. Thus, provided that they pay remuneration at least to authors as required by the Directive, libraries do not need prior permission to lend e-books in their collections on a one-copy-one-user basis.
⇨ Additionally, the e-books must have been obtained from a lawful source in order to be able to lend them. In reality, the ability to lend them to the public may be affected by the terms of the accompanying licence, unless national legislation for e-lending also ensures that any licence terms and conditions to the contrary are rendered unenforceable.
5. In answer to Question 2, the Court decided that “EU law, and in particular Article 6 of Directive 2006/115, must be interpreted as not precluding a Member State from making the application of Article 6(1) of Directive 2006/115 subject to the condition 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 European Union by the holder of the right of distribution to the public or with his consent, for the purpose of Article 4(2) of Directive 2001/29.”
⇨ The answer to Q2 was to a direct question whether EU law precludes “Member States from imposing…a condition that the copy of the work made available by the establishment….must have been brought into circulation by an initial sale or other transfer of ownership of that copy within the European Union by the rightholder or with his consent…”. The question was asked because Dutch law imposes such a condition.
⇨ The Court’s answer was that, yes, Member States may apply additional conditions beyond those specified in the Rental and Lending Directive to improve the protection of authors’ rights. Its answer also confirmed that the Dutch condition that if the e-book has been sold or licensed to the public in the EU, libraries may purchase it for e-lending to the public, is compliant with the Directive. Thus other Member States may also impose such a requirement with regard to e-lending within their own jurisdictions.
6. In answer to Question 3, the Court decided that “Article 6(1) of Directive 2006/115 must be interpreted as meaning that it precludes the public lending exception laid down therein from applying to the making available by a public library of a digital copy of a book in the case where that copy was obtained from an unlawful source.”
⇨ Where a copy of an e-book was obtained from an unlawful source, allowing the lending of such a copy would be liable to unreasonably prejudice rightholders since an objective of the Rental and Lending Directive is to combat piracy. Consequently, the public lending exception does not apply to a digital copy of a book made available by a public library that had been obtained from an unlawful source.
7. The Court declined to answer Question 4 about digital exhaustion applying to the sale of e-books because it considered that, given its answer to Question 2, exhaustion is not relevant to the purchase of e-books by remote download.
8. The Court judgement is here and its Press Release here. The case now goes back to the Rechtbank Den Haag whose decision will have to follow the CJEU interpretation with regard to the questions put to it. The CJEU ruling does, however, set an important precedent for library e-lending to the public throughout the EU.
9. EBLIDA and VOB  issued statements commenting on the ruling. The ruling is also analysed by legal blogs such as IPKat, Kluwer Copyright Blog and Hogan Lovells Lime Green IP News.
1. Does the ruling need to be applied by an EU Directive or is only national legislation necessary, where required?
There is no need to amend the Rental and Lending Directive 2006/115/EC for the Court’s ruling to have effect.
The derogation permitting lending to the public (including remuneration for authors) has been implemented differently in Member States. The Court’s ruling means that in countries where the derogation has been implemented, it should also apply to e-lending (but following the one-copy-one-user model). However, because the lending derogation/exception was not made mandatory by the Rental and Lending Directive, this judgement has no value for Member States that did not choose to implement it or which have explicitly restricted it to paper books.
The Court’s ruling is based on its interpretation of Article 6(1) of the Rental and Lending Directive, so one needs to look at how this Article had been implemented in each Member State. However, Member States are supposed to implement Directives in a coherent way so, as in other areas of law, the ruling will therefore directly influence the application of relevant law at national level.
2. If libraries can buy, or be given, a hard copy book and digitise it for use on dedicated terminals on the premises (as per the CJEU ruling in Case C-117/13 Technische Universität Darmstadt v Eugen Ulmer) can they lend that digitised copy?
No. Digitising for the purpose of e-lending is not covered by either judgement.The Court’s ruling in the VOB case is not about digitising works, but about whether libraries can lend e-books to the public under the Rental and Lending Directive. The TU Darmstadt case concerned clarifying the situation where a library digitises a hardcopy book in its collection for the purpose of showing it on a “terminal” located on the library premises under Information Society Directive 2001/29/EC Article 5(3)(n). Libraries must understand this distinction.
Furthermore, in TU Darmstadt, the Court had said that the exception to the reproduction right applicable to libraries was only for “specific acts of reproduction”, “meaning that, as a general rule, the establishments in question may not digitise their entire collections” and that this condition is “in principle observed where the digitisation of some of the works of a collection is necessary for the purpose of the ‘use by communication or making available, for the purpose of research or private study, to individual members of the public by dedicated terminals’”. Additionally “the scope of that ancillary right of digitisation must be determined by interpreting Article 5(2)© of Directive 2001/29 in the light of Article 5(5) of that directive, under which that limitation is applicable only in certain special cases which do not prejudice the normal exploitation of the work or other protected object or cause unjustified harm to the legitimate interests of the rightholder…”
That said, although outside the scope of the Court’s ruling, libraries could seek national legislation to permit the e-lending of digitised works in their collections. Otherwise they would probably have to obtain the rightholder’s permission to lend copyright works that they had digitised for displaying on ‘dedicated terminals’ on the premises. Realistically, however, it would be difficult to achieve such legislation even for restricted uses under limited conditions, such as, for example, for lending digitised copies of hard copy works that are rare because out-of-commerce or in a fragile state.
3. Does the ruling affect e-book licensing regimes applying to lending platforms from publishers or via intermediaries such as Overdrive?
The ruling is silent on this as the Court was not asked to address e-book licensing issues.
4. Can libraries now buy e-books available for sale to the public in the EU from consumer retail sources such as Amazon or other online or bricks and mortar bookshops or library suppliers and lend them to the public on a one-copy-one-user basis, regardless of the terms of the accompanying licence? Lending in this case includes remote e-lending by streaming or downloads.
The Court was not asked to address how libraries acquire e-books from legitimate sources, or the point of e-book providers applying restrictive terms and conditions in their licences to prohibit lending, so did not do so.
The Court has said that if libraries legally acquire a lawful copy of an e-book, they can lend it under the one-copy-one-user model provided they pay remuneration to the rightholder (at least the author) as required by national laws. The digital copy must be legally acquired, and in the Netherlands (the country of the case) the copy must also 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. Other EU/EEA countries may put similar or other optional conditions in place.
However, licensing issues were not addressed by the Court, so as was the case before the ruling, libraries may be able to buy a copy of an e-book from consumer retail sources, but if the accompanying licence prohibits the lending of that copy to the public (as, for instance, do Amazon licences) or the file is protected by a technological protection measure (as are Adobe files) preventing upload to a server and/or subsequent downloads of the file, libraries will still not be able to lend it, even on a one-copy-one-user basis, unless national laws for e-lending also ensure that any licence terms and conditions to the contrary are rendered unenforceable.
To address this, the library community could seek national legislation to protect their national exceptions and limitations, including, if applicable in the country, the ‘public lending’ derogation/exception, from being overridden by contract terms, by voiding any contract clauses that purport to restrict or prevent utilisation of the exception/derogation. As far as e-lending is concerned, however, libraries are likely to reinforce the case for legislation if they first seek to engage in discussions with the publishers to try and find soft law solutions.
5. Can publishers still refuse to sell certain titles to libraries for e-lending and/or charge prices for lending copies that are significantly higher than the normal market price?
The Court was not asked to address whether publishers could refuse to sell certain e-book titles direct to libraries or via platforms for e-lending or what they charge for e-lending titles (a matter of competition law), so did not do so.
Thus, libraries still may find they cannot always acquire for lending purposes any e-book title made available for sale to the public or that the prices charged are significantly higher than the normal market price. These issues remain crucial ones for public library e-lending in particular.
1. While EBLIDA was pleased that the Court found that ‘public lending’ includes e-lending on a one-copy-one-user basis, the outcome of the case, while potentially widening the scope of the library services in the digital environment, still leaves conspicuous gaps challenging the mission of libraries in the information society because the Court was limited to only answering the questions put to it. The Court was not asked to, and did not, address e-book licensing terms that prohibit lending, the question of refusal by publishers to sell libraries any e-book title they want for lending, or the above-market prices at which some lending copies are offered to libraries.
2. The Court ruling requires no amendment of the Rental and Lending Directive, but it should have effect at national level depending on how the Directive was implemented in each Member State. Some countries may need to legislate to comply with the Court’s ruling, others will not. Member State courts adjudicating on future relevant cases will need to defer to this judgement.
3. EBLIDA is now working on a statement to MEPs and the EU Commission calling for
⇨ The inclusion of the outstanding problems hindering e-lending in the current copyright reform process (possibly by means of an amendment to the Rental and Lending Directive 2006/115/EC);
⇨ Further harmonisation of derogations from the lending right in EU Member States;
⇨ The ability of libraries to purchase without restriction any e-book distributed for sale to the public for the purpose of public lending;
⇨ Allowing remote e-lending of e-books to library patrons by streaming and/or download;
⇨ Prohibition of contract terms that restrict the exercise of lawful exceptions and limitations, including the derogation/exception for ‘public lending’;
⇨ Authorisation of the legal circumvention of TPMs that restrict the exercise of lawful exceptions and limitations, including the derogation/exception for ‘public lending’.
4. EBLIDA needs up-to-date information from you, our Members, in order to pursue the above objective
⇨ We ask our member associations and organisations to provide us in a timely manner with information concerning their national legislation for public lending, including e-lending if any, (and for remuneration to rightholders for public lending) in Member States.
⇨ We also need information and examples concerning e-lending platform licensing regimes in your countries.
Please send your information to:
Vincent Bonnet, EBLIDA Director
1 Paragraph 54 of the Ruling in Case C-174/15
2 Ibid. Paragraph 65
3 Ibid. Paragraph 72
4 Ibid. Paragraph 73
5 VOB statement also available in Dutch
6 Directive 2006/115 Art. 6.1 “Member States may derogate from the exclusive right provided for in Article 1 in respect of public lending, provided that at least authors obtain a remuneration for such lending. MemberStates shall be free to determine this remuneration taking account of their cultural promotion objectives”
7 TU Darmstadt v Eugen Ulmer KG, Case C-117/13 paragraphs 44-47
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