• Judgment of the Court of 12 September 2006, C-479/04, Laserdisken

Laserdisken is a commercial company, which sells inter alia copies of cinematographic works to individual purchasers through its sales outlets in Denmark. Until the end of 2002, those copies were mostly imported by the company from other Member States of the European Union but also from non-member countries. The products included special editions, such as original American editions, or editions filmed using special techniques. Another major part of the product range consisted of cinematographic works, which were not or would not be available in Europe. Having registered a significant drop in its operations following the abovementioned legislative amendment, on 19 February 2003 Laserdisken brought legal proceedings against the Kulturministeriet before the Østre Landsret (Eastern Regional Court), claiming that section 19 of the Law on copyright, as amended in the context of the transposition of Article 4(2) of Directive 2001/29, did not apply.

The Østre Landsret asks whether Article 4(2) of Directive 2001/29 is invalid and whether Article 4(2) of Directive 2001/29 precludes a Member State from retaining international exhaustion in its legislation.

The Court concluded that consideration of the first question does not reveal any information such as to affect the validity of Article 4(2) of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society. Furthermore, the Court ruled that Article 4(2) of Directive 2001/29 is to be interpreted as precluding national rules providing for exhaustion of the distribution right in respect of the original or copies of a work placed on the market outside the European Community by the rightholder or with his consent.

• Judgment of the Court of 21 June 2012, C-5/11, Donner

Mr Donner, a German national, was the principal director and shareholder of In.Sp.Em. Srl (‘Inspem’), a freight forwarding company established in Bologna (Italy) and essentially conducted his business from his place of residence in Germany. Inspem ensured the transport of goods sold by Dimensione Direct Sales Srl (‘Dimensione’), a company also established in Bologna, the head office of which was situated in immediate proximity of that of Inspem. Dimensione used advertisements and supplements in newspapers, direct publicity letters and a German-language internet website to offer replicas of furnishings in the so-called ‘Bauhaus’ style for sale to customers residing in Germany, without having a licence to market them in Germany. According to the findings of the Landgericht München II, all of the said items are copyright-protected in Germany as works of applied art. In Italy, however, there was no copyright protection or, alternatively, no enforceable copyright protection as against third parties during the period of relevance, namely from 1 January 2005 to 15 January 2008. The furnishings at issue in the main proceedings, sold by Dimensione, were stored, in their packaging on which the name and address of the purchaser were indicated, in Dimensione’s delivery warehouse in Sterzing (Italy). Under the general sales conditions, if customers residing in Germany did not wish to collect the goods they had ordered, or nominate their own freight forwarder, Dimensione recommended that Inspem be instructed. In the cases in the main proceedings the customers instructed Inspem to transport the furnishings that they had purchased. The Inspem drivers collected the items at the warehouse in Sterzing and paid the relevant purchase price to Dimensione. Inspem collected the purchase price and freight charges from the customer on delivery to the person who had placed the order in Germany. Whenever a customer failed to accept or make payment for a delivery of furnishings, the goods were returned to Dimensione, which reimbursed Inspem for the purchase price already advanced and also paid the freight charges. According to the Landgericht München II, Mr Donner thereby committed the criminal offence of aiding and abetting the prohibited commercial exploitation of copyright-protected works, contrary to Paragraphs 106 and 108a of the UrhG and also Paragraph 27 of the Criminal Code. Dimensione was found to have distributed copies of protected works in Germany. Distribution under Paragraph 106 of the UrhG required the transfer of the ownership of the goods sold and as well as a transfer of the power of disposal from the vendor to the purchaser. In the main proceedings, under Italian law the transfer of ownership from vendor to purchaser took place in Italy as a result of the meeting of the minds and the individualisation of the goods at the warehouse in Sterzing. The transfer of the power of disposal over the goods, however, did not take place until the goods were handed over to the purchaser upon payment of the purchase price in Germany, with the help of Mr Donner. The issue whether the furnishings enjoyed copyright protection in Italy was therefore immaterial. The Landgericht München II found that the restriction on the free movement of goods deriving from national copyright law was justified on grounds of protection of industrial and commercial property. Mr Donner appealed on a point of law (revision) against that judgment to the Bundesgerichtshof.

The Bundesgerichtshof asks whether Articles 34 and 36 TFEU governing the free movement of goods are to be interpreted as precluding the criminal offence of aiding and abetting the prohibited distribution of copyright-protected works resulting from the application of national criminal law where, on a cross-border sale of a work that is copyright protected in Germany, that work is taken to Germany from a Member State of the European Union and de facto power of disposal thereof is transferred in Germany, but the transfer of ownership took place in the other Member State in which copyright protection for the work did not exist or was unenforceable as against third parties’.

The Court concluded that a trader who directs his advertising at members of the public residing in a given Member State and creates or makes available to them a specific delivery system and payment method, or allows a third party to do so, thereby enabling those members of the public to receive delivery of copies of works protected by copyright in that same Member State, makes, in the Member State where the delivery takes place, a ‘distribution to the public’ under Article 4(1) of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society. Also, according to the Court, Articles 34 TFEU and 36 TFEU must be interpreted as meaning that they do not preclude a Member State from bringing a prosecution under national criminal law for the offence of aiding and abetting the prohibited distribution of copies of copyright-protected works where copies of such works are distributed to the public on the territory of that Member State in the context of a sale, aimed specifically at the public of that State, concluded in another Member State where those works are not protected by copyright or the protection conferred on them is not enforceable as against third parties.

• Judgment of the Court of 22 January 2015, C-419/13, Art & Allposters

Pictoright is a Netherlands copyright collecting society which looks after the interests of copyright owners affiliated to it. Among other products, Allposters offers its clients reproductions in the form of posters, framed posters, posters on wood and images on canvases. In order to produce an image on canvas, a synthetic coating (laminate) is first applied to a paper poster depicting the chosen work. Next, the image on the poster is transferred from the paper to a canvas by means of a chemical process. Finally, that canvas is stretched over a wooden frame. The image of the work disappears from the paper backing during the process. Allposters refers to both it and its result as ‘canvas transfer’. Pictoright opposed the sale of canvas transfers reproducing works protected by copyright without the consent of its clients, the holders of that copyright, calling on Allposters to cease that activity and threatening legal proceedings. As Allposters refused to respond to that request, Pictoright brought an action against it before the Rechtbank Roermond (Roermond District Court) seeking that it be ordered to cease all infringement, direct or indirect, of the rightholders’ copyright and moral rights. By decision of 22 September 2010, the Rechtbank Roermond dismissed that action. Pictoright then appealed against that decision before the Gerechtshof te ’s-Hertogenbosch (Regional Court of Appeal, ’s-Hertogenbosch) which, by judgment of 3 January 2012, annulled the decision and upheld most of Pictoright’s claims. Allposters brought an appeal in cassation before the referring court.

The Hoge Raad der Nederlanden is asking, in essence, whether the rule of exhaustion of the distribution right set out in Article 4(2) of Directive 2001/29 applies in a situation where a reproduction of a protected work, after having been marketed in the European Union with the copyright holder’s consent, has undergone an alteration of its medium, such as the transfer of that reproduction from a paper poster onto a canvas, and is placed on the market again in its new form.

The Court ruled that Article 4(2) of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society must be interpreted as meaning that the rule of exhaustion of the distribution right set out in Article 4(2) of Directive 2001/29 does not apply in a situation where a reproduction of a protected work, after having been marketed in the European Union with the copyright holder’s consent, has undergone an alteration of its medium, such as the transfer of that reproduction from a paper poster onto a canvas, and is placed on the market again in its new form.

• Judgment of the Court of 13 May 2015, C-516/13, Dimensione Direct Sales Srl

Knoll belongs to the Knoll group, whose parent company, Knoll Inc., has its headquarters in Pennsylvania (United States). That group manufactures high-value furniture and sells it worldwide. Knoll is authorised to assert the exclusive copyright, held by its parent company, in those designs protected in Germany. Dimensione is a private limited company whose Managing Director is Mr Labianca. Dimensione distributes designer furniture by direct sale in Europe and offers furniture for sale on its website. In 2005 and 2006, Dimensione advertised furniture similar to the protected designs on its website, which is available in German, and in various German daily newspapers and magazines and in an advertising brochure. Since it believed that the items of furniture offered for sale by Dimensione were imitations or counterfeit versions of the protected designs, Knoll brought an action against Dimensione and Mr Labianca before the Landgericht Hamburg (Regional Court, Hamburg) seeking an order prohibiting them from offering that furniture for sale in Germany. The Landgericht Hamburg granted Knoll’s application. The Hanseatisches Oberlandesgericht Hamburg (Higher Regional Court, Hamburg), ruling on the appeal brought by Dimensione and by Mr Labianca, upheld the judgment given at first instance. Dimensione and Mr Labianca then brought an appeal on a point of law (‘Revision’) before the Bundesgerichtshof (the referring court).

The referring court asks, in essence, whether Article 4(1) of Directive 2001/29 must be interpreted as meaning that it allows a holder of an exclusive right to distribute a protected work to prevent an offer for sale or an advertisement of the original or a copy of that work, even if it is not established that that offer or advertisement gave rise to the purchase of the protected object by an EU buyer.

The Court ruled that Article 4(1) of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society must be interpreted as meaning that it allows a holder of an exclusive right to distribute a protected work to prevent an offer for sale or a targeted advertisement of the original or a copy of that work, even if it is not established that that advertisement gave rise to the purchase of the protected work by an EU buyer, in so far as that advertisement invites consumers of the Member State in which that work is protected by copyright to purchase it.

Judgment of 10 Nov 2016, C-174/15 (Vereniging Openbare Bibliotheken), see summary public lending & rental

Judgment of 17 Apr 2008, C-456/06 (Peek & Cloppenburg)

Cassina manufactures chairs. Its collection includes furniture manufactured according to the designs of Charles-Édouard Jeanneret (Le Corbusier). Peek & Cloppenburg operates menswear and womenswear shops throughout Germany. It has set up in one of its shops a rest area for customers, fitted out with armchairs and sofas some from Casina. In a display window of its outlet, Peek & Cloppenburg placed an armchair same as the Casina one. Those items of furniture did not come from Cassina but were manufactured without Cassina’s consent by an undertaking in Bologna (Italy). According to the referring court, such furniture was not protected at the time by copyright in the Member State in which it was manufactured.  Cassina brought an action against it before the Landgericht Frankfurt (Frankfurt Regional Court) (Germany) seeking an order that it must desist from that practice and provide Cassina with information, in particular as regards the distribution channels for those items of furniture. In addition, Cassina sought an order that Peek & Cloppenburg pay damages.

The Bundesgerichtshof decided to stay the proceedings and to refer to the Court two questions for a preliminary rulin.  By Question 1(a) and (b), the referring court is essentially asking whether the concept of distribution to the public otherwise than through the sale of the original of a work or a copy thereof, for the purpose of Article 4(1) of Directive 2001/29, must be interpreted as meaning that it includes, first, granting to the public the right to use reproductions of a work protected by copyright without that grant of use entailing a transfer of ownership and, secondly, exhibiting those reproductions to the public without actually granting a right to use them. Question number two was not examined.

The Court ruled as follows:

The concept of distribution to the public, otherwise than through sale, of the original of a work or a copy thereof, for the purpose of Article 4(1) of Directive 2001/29/EC on the harmonisation of certain aspects of copyright and related rights in the information society, applies only where there is a transfer of the ownership of that object. As a result, neither granting to the public the right to use reproductions of a work protected by copyright nor exhibiting to the public those reproductions without actually granting a right to use them can constitute such a form of distribution.

The concept of distribution ‘by sale or otherwise’ for the purpose of Article 4(1) of Directive 2001/29 must be interpreted in the light of the definitions given in the World Intellectual Property Organisation (WIPO) Copyright Treaty and the WIPO Performances and Phonograms Treaty, that directive being intended to implement at Community level the Community’s obligations under the those Treaties. Those Treaties link the concept of distribution exclusively to that of transfer of ownership.

The wording of the provisions relating to the exhaustion of the right of distribution in the Copyright Treaty and Directive 2001/29 points to the same conclusion. Thus, since Article 4(2) of that directive provides for the exhaustion of the distribution right within the Community in respect of the original or copies of the work on the first sale or other transfer of ownership, the same interpretation should be given to the term ‘otherwise’ in Article 4(1), because the two provisions form a whole.

Those findings are not affected by recitals 9 to 11 in the preamble to Directive 2001/29, which state that harmonisation of copyright must take as a basis a high level of protection, that authors have to receive an appropriate reward for the use of their work and that the system for the protection of copyright must be rigorous and effective. That protection can be achieved only within the framework put in place by the Community legislature. (see paras 31-38, 41, operative part)