Technische Universität Darmstadt v. Eugen Ulmer KG

The European Court of Justice (ECJ) ruled on the meaning of an exception contained in the European Copyright Directive (2001/29/EC), permitting the provision of protected works on dedicated terminals by libraries and various other educational establishments for the purposes of on-site research and private study.  It was held that such entities were permitted under the exception to digitize works protected by copyright for such purposes but that depending on national legislation, public end users may or may not be permitted to print or save such works to USB sticks. Technische Universität Darmstadt v. Eugen Ulmer KG, Case No. C 117/13 (ECJ, Sept. 11, 2014).

Background

The European Copyright Directive requires all EU member states to enact certain legislation in relation to the protection of works subject to copyright.  In particular, Articles 2 and 3 provide for authors the right to prohibit unauthorized reproduction of their works and to prevent such works from being communicated or made available to the public.

Under Article 5(3)(n), EU member states have the option to enact exceptions or limitations in relation to the above rights, allowing libraries and other publicly accessible educational establishments (which are not for direct or indirect economic or commercial advantage) to communicate or make available, on dedicated on-site terminals, protected works not subject to purchase or licensing (i.e., contractual) terms, for the purposes of research or private study.

This exception is, however, qualified by Article 5(5)—which requires that Article 5(3)(n) must only be applied in certain special cases that do not conflict with a normal exploitation of the work and do not otherwise unreasonably prejudice the interests of the right-holder.  Various member states have implemented such an exception into their national legislation including, inter alia, Germany and the United Kingdom.

In the present case, TU Darmstadt (the appellant), an operator of libraries in Germany that had installed electronic reading terminals allowing members of the public to access the works in its collections, including textbooks published by Eugen Ulmer (the respondent), appealed against a decision of the Frankfurt Regional Court which prohibited the appellant from allowing the public to print out works accessed through its reading terminals or otherwise storing them on a USB stick to be taken out of the library.  Before proceedings commenced against the appellant, the appellant had declined an offer by the respondent to purchase and use the respondent’s textbooks as e-books.  As such, the German Federal Court of Justice referred the following questions to the ECJ on the interpretation of the meaning of Article 5(3)(n):

1. Whether a work is subject to “purchase or licensing terms,” within the meaning of Article 5(3)(n), where the right-holder has offered to conclude with an establishment a licensing agreement in respect of that work.

2. Whether Article 5(3)(n) entitled member states to confer on such establishments the right to digitize the works contained in their collections, where necessary to make those works available on terminals.

3. Whether the rights that member states lay down pursuant to Article 5(3)(n) go so far as to enable public users to print out on paper or store on a USB stick the works made available on terminals.

Decision

In summary, the ECJ ruled as follows:

1. In respect of the first question, that the mere offering to conclude a licensing agreement was not sufficient to exclude the application of Article 5(3)(n).  On the basis that the aim of the exception was to promote the public interest in encouraging research and private study, allowing unilateral and discretionary actions (i.e., mere contractual offers) to exclude Article 5(3)(n)’s application would negate its purpose and create imbalances in favor of right-holders.  Accordingly, the exception could only be excluded on this basis by existing contractual relations.

2. In respect of the second question, that Article 5(3)(n) would be rendered ineffective if the institutions covered by the exception did not have the right the digitize the relevant works if that was necessary for making those works available to users by means of dedicated terminals within the libraries.  However, the ECJ clarified that Article 5(3)(n) should be read in conjunction with Article 5(2)(c), meaning that the exception only covered “specific acts of reproduction.”  Accordingly, whilst libraries were not permitted to digitize their entire collections, the digitization of some of their collection would be acceptable.

3. In respect of the third question, that the creation of a new analog or digital copy of a protected work (by public users, rather than the libraries themselves) made available by means of a dedicated terminal cannot be permitted under Article 5(3)(n), on the basis that such reproduction is not strictly necessary for the purpose of making the work available to the users of that work.  However, this did not mean that member states could not, where appropriate, permit such reproductions through enacting national legislation pursuant to Articles 5(2)(a) and (b) of the European Copyright Directive, provided that the relevant right-holders received fair compensation and the reproductions did not unreasonably prejudice the legitimate interests of the right-holders.

Practice Note:  The ECJ’s response to the first two questions may appear obvious on reading Article 5(3)(n), in particular, it specifically excludes works subject to contractual terms and from a practical perspective, digitization is evidently the most appropriate method of making works available on a public terminal.  However, the ECJ somewhat side-stepped the third issue—although it was clear that Article 5(3)(n) did not extend to user-created reproductions, it conceded that such reproductions may instead be covered by other exceptions or limitations, to the extent permitted by the relevant member state.

The end result here for right-holders may be frustrating—this ruling may mean that it becomes increasingly difficult for right-holders to assert their rights, requiring consideration as to whether any exceptions or limitation apply on a jurisdiction-by-jurisdiction basis due to varying degrees of implementation of the European Copyright Directive by different EU member states.