Tom Kabinet: there is no "online exhaustion" of the right of making available to the public even if it is characterized as distribution (as there is no real "e-lendig" either)
Under the WIPO “Internet Treaties” (the WCT and the WPPT) and the EU Information Society Directive, the right of distribution only applies to tangible copies and it may only be exhausted as such. In case of uploading, making available on the Internet and downloading of works, along with the right of reproduction for the related acts of copying, the right of (interactive) making available to the public applies which do not exhaust even where, in a national law, it is characterized as distribution. Optimism prevailed that the UsedSoft and VOB judgements of the Court of Justice of the European Union (CJEU) would not create any major conflicts with these provisions of the Treaties and the Directive. The source of optimism was that, in UsedSoft, the CJEU had only introduced online exhaustion of intangible copies for computer programs and, in VOB, the Court only found that the right of lending is applicable for making available of intangible copies of e-books for a limited period of time without any economic or commercial advantage; it recognized that the rights of distribution and rental only apply to tangible copies. Therefore, it was hoped that there would not be attempts at extending the doctrine of exhaustion to online making available of intangible copies (and to the related acts of reproduction) of mainstream categories of works. The Allposters judgment of the Court strengthened the optimism. However, as it could be expected, it has turned out to be unfounded. In the Tom Kabinet case, the District Court of the Hague has submitted preliminary questions to the CJEU the essence of which is to ask whether online exhaustion introduced by the CJEU in UsedSoft may be applied to online making available any “used” works also others than computer programs (in the given case, books).
In the paper it is pointed out that there has been no justified reason for the Dutch court’s preliminary questions. It is an acte clair on the basis of the Information Society Directive (and the WIPO Copyright Treaty (WCT)), and also an acte éclairé on the basis of various judgements of the Court of Justice – not only in Allposters, but even in UsedSoft and VOB – that the answer to the Dutch court’s basic question must be in the negative. First, those arguments of Dutch court are reviewed which served as a basis for the preliminary questions. Second, the relevant norms of the WCT and the Information Society Directive are presented and discussed under which there is no “online exhaustion” nor free “e-lending”. Third, the somewhat contradictory judgments of the CJEU – the UsedSoft, Allposters, VOB tryptic – are analysed along with the ReDigi decision adopted by a district court in the United States. Finally, an alternative solution is outlined; namely, applying those provisions for the acts characterised as “distribution” in the way they truly qualify under the international and EU law – that is, acts of online (interactive) making available to the public and related acts of reproduction – and, instead of trying to extend the doctrine of exhaustion, applying certain exceptions or limitations to these rights where it is justified and is in accordance with the three-step test.