No licence needed for the ‘public lending’ of digital copies of books!

The Court of Justice of the European Union (“CJEU”) in the VOB v. Stichting Leenrecht case (C-174/15) has recently provided some clarifications in relation to the rental and lending right covered by the Rental and Lending Directive (2006/115). Three important clarifications were given by the Court: (i) if a public library permits the lending of digital copies of books, made available on its server, it will not have to obtain a licence from the right holder if its national legislation, pursuant to article 6(1) of Directive 2006/115, provides for a “public lending exception”; (ii) Member States are allowed to make the application of the public lending exception dependent upon a first sale or transfer of ownership of that digital copy in the EU by the holder of the distribution right (or with their consent); (iii) if a digital copy of a book is obtained from an unlawful source and subsequently made available by a public library, the library will not be able to benefit from the public lending exception.

A discussion arose between VOB, which represents the interests of public libraries in the Netherlands, and Stichting Leenrecht, responsible for the collection and subsequent transfer to other collective rights management associations of lending rights, as to whether the concept of “lending” under Dutch copyright law comprised the lending of both printed and digital copies of books. The latter seemed highly unlikely following draft legislation on libraries providing for the creation of a “national digital library for the remote digital lending of electronic books”, which only provided for a public lending exception in relation to printed books. VOB, however, decided to challenge this draft legislation, seeking a declaration before the District Court of The Hague that Dutch copyright law already covered “digital lending”. The Court decided to stay the proceedings and refer several questions to the CJEU.

The CJEU decided in favour of VOB, essentially holding that the concept of “lending” mentioned in Directive 2006/115 also covers the lending of digital copies of books.

In relation to the exception provided by article 6(1) of the Directive, and in line with previous case law with respect to digital copies, it decided to limit its scope to one single copy stored on the server of the public library, and decided that the downloaded copy can no longer be used after the expiry of the lending period.

The Court also decided that, given the fact the application of the public lending exception could prejudice the legitimate interests of the authors, Member States are entitled to make its application dependent upon first sale or transfer of ownership of that copy in the EU by the holder of the distribution right (or with their consent).

Moreover, in line with case law concerning the private copying exception, the Court finally decided to limit the scope of the public lending exception to cases where the digital copy of the book that is made available by the public library has been lawfully obtained. Copies obtained from an unlawful source cannot fall under the public lending exception.