No second-hand market for e-books

Blog article on judgement by the ECJ (C-263/18) – ‘Tom Kabinet
written by our intern Thibau Duquin

Are you for or against e-books? What if you’ve read the book? Can you sell your e-book? Is there such a thing as a second-hand market for e-books? And do the rules on physical books also apply for digital versions? These are questions to which we didn’t have a definitive answer, until now…

The European Union adapted the copyright rules to the current modern and digital evolution in our society with the InfoSoc-directive, but this doesn’t mean that the rules for non-digital works also apply to digital works.

Second-hand market e-books

Tom’s readers club

Tom Kabinet is a Dutch undertaking that owns a website with the same name. It gives its subscribers the possibility to buy second-hand e-books with through a readers club called “Toms leesclub” (translated: Tom’s readers club), for which a fixed download link is used. Tom Kabinet bought these e-books off their users and distributed them through the website. But is there such a thing as a second-hand e-book? Can you resell an e-book?

Two copyright societies protecting the rights of Dutch authors sued Tom Kabinet for copyright infringement. This case has now come to the Grand Chamber of the ECJ.

Community exhaustion …

This discussion falls within the scope of the community exhaustion. This principle holds that the author of a work exhausts his or her rights on the moment of the first sale of that work withing the EU. This means that after that first sale, the author can’t prevent the free movement of that work. 

The community exhaustion is an exception to the distribution right of the author. This right entails that the author has to give his/her permission for further distribution, reproduction, adaptation, …

… or communication to the public?

Nevertheless, the Court judged that community exhaustion doesn’t count here and thus confirms that community exhaustion only applies to physical works and computer programs, and not to digital works. The Court also judged that making e-books public through a fixed link doesn’t fall within the scope of “distribution”, but rather within “communication to the public”, where the community exhaustion exception doesn’t apply. This means that the permission of the author is required for selling e-books through a website.

Communication to the public is interpreted broadly and the Court adds that every wired and wireless transmission and retransmission is also covered. The Court also doesn’t look at the amount of actual users of the e-book, but only looks at the amount of potential users that can retrieve the work.

The Court supports its distinction between the physical and digital copies  based on the fact that physical books diminish in quality over time and second-hand books are thus less valuable. This is not the case for e-books. A second-hand copy doesn’t suffer in quality over time, which makes it as valuable as a first-hand e-book. Applying the same rules would be harmful to the rights and interests of authors. E-books can also very easily be copied and distributed, which is another very important factor in the assessment of the Court.

What does this actually mean?

The judgement of the ECJ that the transmission of an e-book that can be used for an unlimited amount of time through a fixed download link constitutes a communication to the public, and not a distribution, means that you need permission of the author to resell your e-book. If you don’t get permission, then reselling the e-book is not allowed and constitutes a copyright infringement. This raises the question whether you actually own the e-books you buy.

Physical book or e-book, what do you prefer? Lovers of paperbacks and hardcovers will from now on have an extra argument: their copies can be resold, e-books can’t.

Questions about copyright or specifically about this article?

Feel free to contact Bart Van den Brande at bart@siriuslegal.be or 0032 486 901 931.