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Copyright: defining the boundaries

16 March 15

IP briefing: a note on two important copyright rulings from the Court of Justice of the European Union

by Susan Snedden

Art & Allposters International BV v Strichting Pictoright (Case C-419/13)

Copyright law in the EU is largely harmonised by virtue of the InfoSoc Directive (2001/29/EC). Copyright owners enjoy a number of exclusive rights, including (i) the right to make reproductions of their works (article 2); and (ii) the right to distribute their works to the public by sale or otherwise (article 4(1)).

The distribution right in relation to each tangible copy of a work is “exhausted” once it is placed on the market in the EU with the copyright owner’s consent (article 4(2)). For example, once a book is so placed on the market, it can be distributed further, without requiring separate copyright owner consent.

Pictoright is a Dutch collecting society which administers copyright in artistic works such as paintings. Allposters produced posters of paintings in which Pictoright owned copyright, and then used these to create canvases of the paintings. The process of transferring the images from the posters onto canvas destroyed the original poster.

Pictoright claimed that the rights granted to Allposters to distribute the posters did not extend to the creation of new copies of the work on canvas. Allposters argued that Pictoright’s exclusive right to control distribution had exhausted, as Pictoright had consented to distribution of the posters and no additional copies of the work had been created. The CJEU had to decide whether the exhaustion rule applied.

Referring to recital 28 of the directive, the CJEU noted that “the EU legislature, by using the terms ‘tangible article’ and ‘that object’, wished to give authors control over the initial marketing in the European Union of each tangible object incorporating their intellectual creation”. The process of transferring the poster onto canvas amounted to the creation of a new tangible work; but the copyright owner had the exclusive right to make new reproductions.

The court therefore ruled that exhaustion of the distribution right under article 4(2) did not apply where the reproduction of a protected work “has undergone an alteration of its medium, such as the transfer of that reproduction from a paper poster onto a canvas”, before being put on the market in its new form. Permission to sell copies of a copyright work in one form did not allow further copies to be made and sold in a different form.

This decision strengthens copyright owners’ ability to control the reproduction and distribution of physical copies of their works, and is welcome so far as it goes. The judgment covers exhaustion only in relation to tangible copies of works and not digital copies. Digital exhaustion is a hot topic in copyright law, and future decisions are likely. Meanwhile, this decision provides welcome clarification in the analogue world.

Pez Hejduk v EnergieAgentur.NRW GmbH (Case C-441/13)

In the second case, the CJEU considered which courts have jurisdiction to hear disputes relating to online copyright infringement, in terms of the Brussels-I Regulation (EC) No 44/2001, now recast as Regulation 1215/2012.

Ms Hejduk was an Austrian photographer. Her photos were used by EnergieAgentur, a German company, on their .de website, without her permission. She sued EnergieAgentur in the Austrian courts. EnergieAgentur challenged the court’s jurisdiction because they were domiciled in Germany, and their website, using a .de domain, was aimed at the German public.

Article 2 (now article 4) of the regulation provides that a defender will be sued in the court of their domicile. Here that would have been Germany. However, article 5(3) (now article 7(2)) provides that in delict cases, the defender can be sued in the courts of the place where the harmful event occurred or may occur. In previous cases, the CJEU has held that this can be two or more places, specifically the place where the harm occurred, or the place where the wrongful event, giving rise to the harm, occurred.

The CJEU noted that the wrongful event took place in Germany, where the defender took the decision to display the photos on the website and commenced the technical process for this. However, the website was accessible in Austria, so at least some of the harm occurred there. Thus, Ms Hejduk could sue in the Austrian courts, but subject to an important limitation – she could only recover damages for harm occurring in Austria.

This judgment clarifies that the court of any member state in which harm occurs as a result of alleged online copyright infringement can hear a claim relating to that website. However, it is always worth bearing in mind the potential limitations on damages recovery when choosing the forum within which to sue.

Susan Snedden, director, IP & Technology, Maclay Murray & Spens

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