No, the Tom Kabinet Decision Does Not Prevent e-Lending

Blog post by Stephen Wyber

Right at the end of the recent report published by the European Commission on remote access to library collections, deep in the annexes, there was a summary of the legal situation for e-Lending across European Union Member States. 

The data was useful, if disappointing – there has been a clear failure of governments to implement EU law, and in particular the decision of the Court of Justice of the European Union in the Vereniging Openbare Bibliotheken (VOB) vs Stichting Leenrecht case (C-174/15). This ruling makes clear that e-Lending should be treated like physical lending, when carried out on the same terms (one copy per user). 

One particular thing stands out however – the claim that the decision in the VOB case is somehow cancelled out by the subsequent decision in Tom Kabinet (C-263/18). This claim is used to justify the failure to implement EU law.

In terms of jurisprudence, this claim however does not stand up to scrutiny, and so can provide no excuse for a lack of action to enable e-Lending in Europe. This blog explores the issue in more detail. 

A Reminder: VOB and Tom Kabinet

The two cases in question are both Dutch, the first dating from December 2016, the second from December 2019. 

VOB dealt with the question of whether the lending of e-Books fell under the exception to the exclusive right of lending provided in the Rental and Lending Directive, first passed in 1992 and subsequently updated in 2006. The case was brought by the library association, which was challenging a legal opinion that it could not lend under the Directive but instead would have to license e-Books.

In particular, it asked whether an e-Book on the server of a library could be lent to users by downloading, on a time-limited basis and with measures to prevent others gaining access, as well as posing questions around whether libraries should only be allowed to lend e-Books that have legally been put into circulation. The court found that when carried out in this way, e-Lending should indeed be treated as equivalent to paper lending under EU law and that the Directive did not need updating to explicitly allow for e-Lending.

Tom Kabinet, on the other hand, dealt with a different right in EU law – the communication to the public right. In this case, a website that allowed people to sell on e-Books that they had previously purchased, on a permanent basis. It asked in effect whether rightholders’ distribution rights were exhausted once an e-Book had first been sold.

The case resulted from an effort by the Dutch publishers’ association to prevent the operation of a virtual ‘second hand’ e-Book market, and related primarily to the interpretation of the distribution right contained in Article 4 of the InfoSoc Directive (passed in 2001, and so subsequent to the original Rental and Lending Directive). The decision here went against the defendant, with an affirmation that in a case such as Tom Kabinet, there was no exhaustion of rights.

Different Question, Different Answer

Already from the descriptions above, it is clear that the two cases are dealing with very different circumstances. It is clear also that the judges were aware of this fact, and took it into consideration when coming to their decision.

Indeed, the Advocate General in Tom Kabinet (who happened to have the same role in VOB) dedicated a whole section of his Opinion to the relationship between the VOB decision and the situation in Tom Kabinet

In this, he makes clear that VOB dealt with the lending right (which is not covered by international law), while Tom Kabinet is about communication to the public and the distribution rights (which definitely are covered by international law) (para 69). He adds that lending, under EU law, is both associated with a public policy objective and is accompanied by compensation, which is not the case for distribution (para 70).

The judges subsequently highlight a number of aspects of Tom Kabinet’s activity that are contrary to EU law, but which clearly differentiate this from the act of e-Lending. Paragraph 69 of the judgement spells these out, explicitly citing the contrast with the situation under VOB:

• Tom Kabinet not applying technical measures to ensure that only one copy can be downloaded. However, e-Lending by libraries under VOB is explicitly limited to a one-copy-one-user model, enforced through the use of technical measures.
• The absence of a time-limit on how long a user can access an e-Book. By contrast, e-Lending by libraries under VOB is explicitly time-bound, in order to mimic the experience of physical lending.

This latter point is reiterated in the paragraphs setting out the Court’s final decision. This confirms that in this case, the distribution right is not relevant as e-Books are not physical works, but rather the communication to the public right that cannot be exhausted. It nonetheless clarifies that it is the permanent nature of the access provided by Tom Kabinet that made this troublesome. By implication, where the access is not permanent, this is not the case.

It is worth looking back at the original legislation too in order to confirm this. Recitals 28 and 29 of the InfoSoc Directive provide the necessary details here, underlining that the distribution right established in InfoSoc is ‘without prejudice to the provisions relating to the rental and lending rights contained in Chapter I of [the Rental and Lending Directive]’. In effect, the provisions of the InfoSoc Directive cannot serve to cancel out possibilities open to libraries under the Rental and Lending Directive – a point that the decision in VOB also makes clear in its paragraph 59.

In short, dealing with separate exclusive rights it is not tenable to argue that the judges in Tom Kabinet sought to ‘correct’ VOB in any way, or stumbled into a judgement that undermined it.

Clarity Still Required

While the above demonstrates that the judges in Tom Kabinet took great care not to undermine the VOB decision, there remains the question of how libraries can access copies of e-Books that they can subsequently lend.

The challenge is that libraries are typically faced with a refusal of publishers to sell e-Books to them, something which effectively undermines the public interest goals of lending. This, added to the absence of reference to contract override that would allow a library to purchase a book aimed at a consumer and ignore the terms and conditions and the removal of TPMs, means that the VOB judgement lacks crucial elements of clarity.

Furthermore, while in some European countries, the law does not stand in the way of libraries seeking to lend digital copies of works that they hold physically, greater legal clarity is likely to be needed before we see widespread adoption of this approach.

Instead, libraries are too often left depending on licensing markets which prevent the development of collections, offer little guarantee of ongoing access, and arguably pose significant competition questions.

It’s time to stop hiding behind the (Tom) Kabinet and take meaningful action to make a reality of the e-Lending principle so clearly set out in the VOB decision.