The CJEU in its Tom Kabinet judgment has ruled that the supply of e-books qualifies as "an act of communication to the public" under the InfoSoc Directive instead of "a distribution to the public" as is the case with physical books. It follows that copyright in e-books cannot be exhausted. This means that the resale of e-books requires the authorization of the copyright holders or else violates the author's or publisher's copyrights. The same reasoning is expected to apply to all digital formats of copyright protected works covered under the InfoSoc Directive, including audiobooks, music and also video games. This notably differs from the approach to the resale of software, which was deemed permitted under the Software Directive, in the CJEU's UsedSoft judgment.
In its judgment of 19 December 2019 in Tom Kabinet (C-263/18), the Court of Justice of the European Union (CJEU) has ruled that the supply by downloading, for permanent use, of an e-book is not covered by the right of "distribution to the public", but is covered by the right of "communication to the public". This means there is no exhaustion of rights and thus the second-hand trade of e-books is not permitted without the authorization of copyright holders. This judgment provides guidance on copyright in a digital environment.
The case concerns Tom Kabinet, an e-book trading platform that allows users to sell or gift e-books to it and it will in turn resell these e-books on the platform, to other users. Publishers complained that this infringed the rights of the e-books' copyright holders. Tom Kabinet argued that it was free to resell e-books, according to the same principle that applies to physical books, i.e. the exhaustion of the distribution right. Exhaustion of rights means that after a physical book is sold once, the copyright is regarded as "exhausted" and the purchaser is free to resell the book.
The case was referred to the CJEU by the District Court of The Hague, requesting clarification as to whether or not Tom Kabinet's actions should qualify as a "distribution to the public" under copyright law - to which the principle of exhaustion of rights applies - and if so under what circumstances Tom Kabinet could resell e-books.
No digital exhaustion
The CJEU ruled that Tom Kabinet did not "distribute" the e-books, as distribution applies to the sale of physical goods only. Instead, the CJEU ruled that the sale of e-books qualified - in copyright law terms - as "a...