#UsedSoft

[itsallaboutit]

The EU Advocate General concluded in his opinion in the Tom Kabinet-case (Case C-263/18) that the “rule of exhaustion” does not cover ebooks and thus ends the question whether the UsedSoft-decision also applies to ebooks accordingly (for now). He hints that both legal and teleological arguments are in favor of the “rule of exhaustion”, however, EU law as it now stands does not give such interpretation. This topic will certainly keep us busy for a while: TBC.

Imagine if the “rule of exhaustion” would apply to ebooks and what this would mean for libraries...

[usedsoft]

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#usedSoft #Gebrauchtsoftware #cloud #Softwarelizenzen

https://plus.google.com/+usedSoftDeutschlandGmbHMünchen/posts/gL73qi2VUyZ

[illegal-tech]

For those who don't know, Digital Rights Management (DRM) refers to technologies used to block or limit the sharing or use of forms of digital media such as games, music or ebooks. They are a response to the challenges posed by the development of technology and how much easier it has become to pirate content.

Many people believe that the use of DRM should be banned, since in real life it is largely accepted that you can lend a friend a book or game, especially once you have finished reading or playing it. They say that the companies should be targeting large scale piracy and this just hampers individuals. The Court of Justice of the European Union on the other hand seems to be in favour of DRM (see UsedSoft v Oracle 2012 and my article on it for more information), but it is interesting to see how this will change.

[medialawreview]

Another UK -> CJEU case which may or may not be set in precedent.

1 February 2020

[movefastbreaklaw-blog]

Week 3: Ownership in an e-World

In April of this year, Microsoft announced that its ebook store was going to close (Financial Times). The consequences of this were very different to the closure of a retail bookshop: Microsoft recalled all of the ebooks sold through the store and customers are no longer able to access their purchases. This story highlights some of the difficulties of “online/offline equivalence” that has been applied in the legal context.

The Court of Justice of the European Union (CJEU) applied the logic of “online/offline equivalence” in UsedSoft GmbH v Oracle International Corp ([2012] Case C-128/11), which concerned the copyright principle of exhaustion. Exhaustion means that an author’s distribution right is exhausted by the first sale of a copy of their work and the author is not able to control further sale of that copy. 

The CJEU held that the “principle of equal treatment” means that the copyright principle of exhaustion applies “regardless of whether the sale relates to a tangible or intangible copy” of a software program. The Court equated online and offline activities to apply the principle of exhaustion to software. 

However, as Nicholson points out, “problems can arise where an activity transported online might appear prima facie to be equivalent to its offline counterpart, but in practice technology has so fundamentally altered the activity that applying existing laws would be harmful” (Nicholson). The situation with Microsoft illustrates the confusion that can arise when offline concepts of ownership are directly lifted and applied in an online context.

Microsoft had allowed customers to “buy” or “rent” ebooks in their online store. The concept of renting an ebook is not too dissimilar to renting a normal physical object (customers purchase access to the item for a defined period of time). However, when a customer chose to “buy” an ebook from Microsoft, they were actually only purchasing access to the product, which Microsoft retained the right to withdraw. This differs from the purchase of a physical book, which customers own and control for as long as they wish. As the Financial Times put it, “[i]n the information age, consumers are often renters with limited control of digital products, even if these have apparently been “sold” to them” (Financial Times).

Accordingly, we must be careful about using offline concepts to describe online “ownership” because the reality of ownership in an e-World is different. The European Court of Justice overlooked this in Usedsoft by taking offline exhaustion and applying it to software. A second-hand market for software, however, can be distinguished from an offline second-hand market. Second-hand software is sold as perfectly as if it were bought brand new when it includes software updates. Why would someone pay more for buying software directly from the supplier, when an equally good version is available more cheaply “second-hand”? By contrast, second-hand physical objects experience wear and tear that is accounted for in the price. It is therefore misleading and confusing to strive for online/offline equivalence, without being cognisant of important differences between offline and online situations.

[itlegaltalk-blog]

From ‘Distribution’ to ‘Public communication’: The drastic change in the right of digital exhaustion

gif: https://ebookfriendly.com/best-animated-gifs-books-reading/              

            We cannot deny that, now, we live in the e-commerce era. Every purchase is only one click away!.All you need is a strong internet connection and one of your many internet-connected devices. However, in present, if you want to buy your favourite e-books at the cheap price from someone who resell them, you may want to reconsider before deciding to put the Visa number. The reason is you could be the one who promote the illegal act by buying the material from the person who infringe the copyright. This can be happened in the situation where the exhaustion of right (i.e. digital exhaustion) is not come into play anymore. That is, the right to sell the copy still belongs to the first owner of the books.

             May I first take you to the traditional notion of the digital exhaustion. The notable case, UsedSoft (C‑128/11), was in favour of the idea of the digital exhaustion according to Article 4 of the Infosoc Directive 2001/29/EC which allow the distribution of the intangible digital purchased work (i.e. in this case, software). As a result, the original owner can no longer claim the distribution right over the software that have been sold.

             Nevertheless, it is because of the perfectly substitutable of these used products. For example, if someone sell you second handed with perfect condition e-books, but cheaper, who would say no. Therefore, it would seem unfair to the original owner of the copy since it can impede the right of the original owner to earn profits from the work created.  

             However, given the pending case, Tom Kabinet (C-263/18), the Dutch company, Tom Kabinet, has engaged in the reselling of used e-books. The management of the company is mainly sit on the ground of the exhaustion concept (i.e. the right to distribute the e-book was exhausted on initial sale by the copyright owner, so Tom Kabinet can resell the e-book without requiring permission.).

             The turning point is where the Advocate General (AG) Szpunar opined that the act of selling (i.e. generally considered as ‘distribution’ which subject in the principle of exhaustion could be interpreted as ‘public communication’ which fall outside the scope of the exhaustion. He confirmed that a single purchaser can be classed as ‘the public’, since they fall outside the copyright owner's ‘private circle’. (see the full document)

             Substantially, the implication of the AG opinion could massively affect the market of used intangible material. Maybe, this altered perspective can be one of efficient solutions to abstain from the complex attribute of these kind of work. However, although the allocation to ‘public communication’ may sound reasonable, how about when someone open second-handed book shop and sell them to others. Is it not the act of ‘public communication’ too? How can they be able to say that the case of the e-books is different from the other regular hardcopy books? This is the major flaw since it will definitely hinder the consistency of the copyright law.

Regardless of the outcome the CJEU will provide in the near future, the argument seems to be remained if the system of the copyright still cannot find the balance between the right of original and subsequent owners.

[lychee2345]

UsedSoft v. Oracle: Digital exhaustion of the distribution right in the second-hand market?

Since Article 4(2) of Directive 2009/24 does not make a tangible or intangible distinction between the definition of a software copy, nor does it stipulate the exhaustion of distribution right is limited to computer program fixed in a tangible medium, there seems no restriction on the form of object to which the exhaustion principle applies. In that case, the question of whether this principle could apply to licensed digital content comes to the reproduction of the copy. Regarding this issue, the court considers the marketability of the copy of a program. Indeed, the resale of digital works may result in a new copy, which can be stored and used for a long time without changing its quality. Such features of digital content may have an impact on the interests of the copyright holder, but the original intent to stipulate the exhaustion of the distribution right is to balance the interests between copyright holder and acquirer by restricting the rights of the owner. Since the copyright holder has already obtained economic returns in the first sale, the provision should be recognized unless the subsequent transfer behavior unduly influences his rights. In other words, if the acquirer or intermediary can ensure that only one copy is left in the hands of the customer after the resale of the work, that is, so long as the copy of the work is still unique, there is no need for legislation to restrict this behavior.

 As for the important difference between digital and traditional second-hand market, that is, the quality of traditional tangible goods, such as books, will be reduced due to wear and tear, while the quality of digital works will not be significantly affected, which is one of the reasons why many scholars do not acknowledge the application of the first-sale doctrine in the digital market. Nevertheless, we can solve this problem by technical means. If the technical conditions can add the specific attributes of the copy under traditional technical conditions to the copy of digital works, such as wear and tear, time limit, thus balancing the interests of the copyright holder and acquirer, then the application of the exhaustion principle should not be a problem. In 2011, IBM filed a patent application that allowed the digital document to age like ordinary paper or photos by setting parameters such as external temperature, aging speed, and type of work carrier. These technologies reduce the barriers to the application of exhaustion under a digital network environment and open the door to the legalization of second-hand markets for digital publications.

 The development of technology will definitely have an impact on the current system, but it is also the technological development that promotes the evolution and improvement of the IP Law. The advent of the Internet era has made the digital copyright market increasingly prominent and the issue of whether the exhaustion principle can be applied to the digital second-hand market needs to be solved urgently.

[legalbits-blog]

Is it possible to sell digital video games?

Back in 2012, the Court of Justice of the European Union (CJEU) issued its decision on UsedSoft GmbH v Oracle International Group (C-128/11). According to the judgement, download-only-software can be resold under some conditions.

So, is it legal to sell download-only video games?

Warning! This blog will only tackle digital computer games, downloaded from platforms such as Steam, Origin or UPlay.

Now, whereas computer programs fall under the Software Directive (2009/24/EC), other types of digital contents (i.e. e-books) are regulated in the Information Society Directive (2001/29/EC). This distinction is essential because:

a)     There are meaningful differences between both Directives

Arguably, the main finding of the UsedSoft case is that the doctrine of exhaustion also applies to intangible goods, this doctrine involves that “once copyright-protected work has been publicly put on the market within the European Economic Area (EEA), it can be freely resold within the EEA”. (1)

One could argue that if it is possible to sell an online copy of Microsoft Office, why wouldn’t it be possible to sell a Steam copy of Sid Meier’s Civilization V?

As mentioned, computer programs fall under a specific Directive (lex specialis), while to other digital contents apply the Information Society Directive (2001/29/EC), in which its recitals 28 and 29 and Article 3(3) note that the doctrine of exhaustion does not cover digital copies of any artwork.

b)     The ruling solely applies to the Software Directive

Even though the CJEU recognises that the concepts used in both Directives should have the same meaning, it notes that:

“[E]ven supposing that Article 4(2) of Directive 2001/29, (…), indicated that, for the works covered by that directive, the exhaustion of the distribution right concerned only tangible objects, that would not be capable of affecting the interpretation of Article 4(2) of Directive 2009/24, having regard to the different intention expressed by the European Union legislature in the specific context of that Directive”. (par. 60, C-128/11)

Consequently, it can’t be inferred from this judgement that the doctrine of exhaustion also applies to digital contents other than software. In fact, in 2014, the Landgericht Berlin ruled that the UsedSoft digital exhaustion doesn’t apply to video games. (2)

What if we consider video games as software?

We can’t. Paragraph 23 of the CJEU judgement on the case Nintendo Co. Ltd and Others v PC Box Srl and 9Net Srl (C-355/12) states that videogames can’t be deemed as computer programs.

A bright future?

Twitter: @UFCquechoisir

Recently, the UFC-Que Choisir revealed that the High Court of Paris decided that it should be possible to resell games from a Steam library, and ruled that Steam’s clause, which prohibits selling computer games is “deemed unwritten” due to its unfair and unlawful nature. (3) For further explanation: ‘Condamnation de Steam’ and video (French only). However, this ruling can be appealed, which means we will still need to wait for a definitive answer.

 Concluding, I believe Directive 2009/24 is more suitable to the current digital world than Directive 2001/29, due to its better technological understanding. It must have been difficult to foresee in 2001 the rise of platforms such as Steam, but now that they have come into play, I think it’s time to amend Directive 2001/29.

[foxtailposts-blog]

Thing One and Thing Two

https://seuss.fandom.com/wiki/Thing_One_and_Thing_Two

Regarding the UsedSoft v. Oracle dispute, it seemed that the ECJ missed Dr. Seuss’ Thing One and Thing Two features. They are twins, they look alike, but are not the same. I think of this metaphor as that the ECJ used the online and offline equivalence (OOE) to equate the term “sale” between the analog world (Thing One) and the digital world (Thing Two). The equalization attempt misled the legal nature of what sale is. 

I start with the concepts of ownership, sale, and OOE. Then, with the interpretation of “sale.” that the ECJ did. I finish by outlining the incoherence of the application of the OOE to the term “sale”.

1. Ownership refers to the fact and standing for using, enjoying, and disposing of something. Intuitively, if I own a car, I can drive, uber, and sell it. All in my own terms. Additionally, those three elements can be separated (bare property). 

2. A sale is a legal contract in which one person gives away something to someone and receives payment. Two hints are outstanding. It does not imply to give away the ownership right (it could be sliced). The sale is regulated and abided by the buyer’s and seller’s wills and conditions.

3. OOE is an acknowledgment that digital things have the same legal effects and evidence treatment as the ones in the analog world.

Now, the “sale” definition: 

“According to a commonly accepted definition, a ‘sale’ is an agreement by which a person, in return for payment, transfers to another person his rights of ownership in an item of tangible or intangible property belonging to him.”

It is stated “rights of ownership”. Remember that if I own, I use, enjoy, and dispose of. If J.K. Rowling sells me a Harry Potter book, I could: read it (use), do origami with the pages (enjoy), and give it to my brother (dispose of). But, that extent of ownership cannot be applied to this case. I cannot do origami with the software (e.g., as decompiling it, article 5 of the Directive 2009/24). This impossibility takes away, or at least restricts, the enjoyment that comes with ownership. 

Probably, the confusion with this broad definition was the equalization of sale to tangible and intangible property. Of course, we can sell books and services (intangible), but within the tangible property, there are movable goods, where the sole possession allows to assume ownership. And again, this could have been the problem when the online and offline equivalence was applied. 

Finally, remember that a sale is ruled by the buyer’s and seller’s own wills and conditions. If this were true, there is no ground for this part of the ruling: 

“(...) [I]f the licence acquired by the first acquirer relates to a greater number of users than he needs (…) the acquirer is not authorised (…) to divide the licence and resell only the user right for the computer program concerned corresponding to a number of users determined by him”.

Thus, despite the first acquirer’s will to sell the unused remaining users of the license, he is not authorized. Why? Why if he is supposed to be the owner of the copy? I did not come with an answer, but this is a hint: upon this reasoning, the new sale is not ruled by the parties’ own terms. In contrast, they are subordinated by Oracle’s designing terms (Oracle is now an outsider). 

[notyourflyingtech-blog]

Second-hand software sell and avoid copyright infringement 

credit picture from http://www.jmr.co.za/2018/05/02/jmr-software-forges-sales-partnership-with-beta-systems/

[legalphoenix-blog]

IT vs IP

This week’s seminar fascinated me for numerous reasons. For starters, being unfamiliar with IP law and just beginning to emerge myself in the IT world and the different branches it encompasses and connects to; I was under the impression that these two areas are in a conflict; where a golden mean between these polarised areas ought to be reached.

Nevertheless, this impression of mine was changed upon attending the seminar and engaging into further research. To be more specific, the focus of this week’s post will be on Francis’ Gurry recent interview to the online magazine of World Intellectual Property Organisation (WIPO) as it helps one to understand the case of UsedSoft GmbH v Oracle International Corp (C-128/11) on a different perspective. In that respect various legal and technological considerations rise; the obligations that rise from IP and IT fields need to be aligned. Mr Gurry emphasizes that the underlining purpose of the IP system is to encourage technological developments and in thus doing so to ‘create a sustainable economic basis for invention and creation’.

The question is whether IP and IT law can co-exist without undermining each other. The ‘open’ movements of the technological publications prefer that data should not be restricted to proprietary rights and legal concepts; which in essence the IP law adheres. As accordingly, any technological data used is the foundation of artificial intelligence and not a product of it. On a metaphorical level, this can be compared to any speaking language that ‘should be freely available to enable the development of artificial intelligence and other applications’. This approach is challenging as from a legal perspective the intellectual property rights of the owner ought to be protected and acknowledged, the fact that its creators and users promote its ‘open’ use arguably undermine the legality of IP.

Nevertheless, Mr Gurry upon being questioned whether or not this development will render the IP system irrelevant, he refuted it. To sceptics however, this is not really reassuring as it seems that technological developments are always a step ahead. This is evident in the pivotal case of UsedSoft, which gave rise to numerous debates due to the challenge of the ‘exhaustion principle.’ Is this a new era for the second hand market in technological developments? Has the distribution model changed? Will there no longer be permanent licensing and monthly subscription will prevail? Are we heading towards an era of distributing context instead of software?

All these questions emphasize the importance of balancing law and technological changes; both fields are global infrastructures that did not really interact to the level we have experienced these recent years. The need to ensure a harmonic interaction between IP and IT is a challenge that needs to be balanced in order to ‘ensure at least functional interoperability’ as Mr Gurry comments. For that reason, one should not look at the IT developments as legal challenges that aim to undermine the legality of governments but more as incentives to initiate development for proactive legislation.

[cyber-survival]

Second-Hand Software Licence: A lack of legal protection for software licensor?

Since the sale of used software licence was legally permitted by the decision of the Court of Justice of the European Union (the “Court”) (UsedSoft GmbH v Oracle International Corp, C-128/11), consumers have markedly benefited from this alternative of buying second-hand software at the cheaper price. On the contrary, many software licensors are questioning whether this ruling deteriorated the right of copyright owners as the competing price between brand-new software and used software which, owing to its nature, are similar in the qualification can cause a sharp decrease in their income.

Is the fact that the Court considered the licensing of software, which is an intangible copy and made available via direct download on the website, to be the same concept with the sale of tangible intellectual property, i.e. books, can be assumed that the Court neglect the protection of rights owner by allowing consumers’ right superseded the software licensor counterpart? Let go through the Court’s landmark decision to perceive what extent the resale of software licence will be legitimate under the Software Directive (2009/24/EC).

In principle, the copyright holders exhaust its distribution right over that copyrighted work after the first sale thereof as the copyright holders have already gained profit from their work. Thus, the purchaser of the copyrighted work is eligible to resell it as the lawful owner. This exhaustion of right upon the first sale applies to the licensing of software via the direct downloading on website providing that software is licensed for (i) perpetual licence with; (ii) one-off payment. In this regard, the purchaser of second-hand software will be a lawful owner from this eligible software resale even if there is a non-transferrable restriction imposed by software licensor.

In addition, the Court posed that resale of software licence will be eligible only if it is not a partial re-licensing and the licensee makes such software unusable for their own usage after the resale. This means that there is only one person using the software at a time which unlikely to affect the software licensor as the lump sum fee paid thereto already included the use of software for unlimited time.

The second-hand software market does not only bring about benefit to consumers as a cost saving option, but also possibly prompt a growth in turnover of software licensed of the licensors since people may tend to make their decision easily to license software if they know that they can resell it thereafter. Moreover, the ability to resell the used software promotes value of software, especially both unused software and shelfware. Not to mention that the second-hand software market can accelerate the development of software for the competitive software market.

In light of the above-mentioned positive impacts, could this landmark decision demonstrate the intention to maintain balance between the right of software licensors and the right of consumers in order to eventually be advantageous for public interest as a whole?    

 Image by https://monophy.com/gifs/sternundberg-shopping-clothes-second-hand-LMPRVKk8uGup8Pdj6E 

[illegal-tech]

Can you sell video games second hand? Sort of

In 2012 the Court of Justice of the European Union (ECJ) decided the case of UsedSoft v Oracle. UsedSoft sold second had software licences, such as the one by Oracle. Oracle's software licence allowed for 25 users, so UsedSoft would sell access to the software for any left over spaces. UsedSoft argued that the licence was paid for so exhaustion applied.

Exhaustion is a legal term meaning that when you sell something to someone you no longer control it and who they can sell it on to. For example, if you buy a physical book from the publisher they cannot stop you from selling it second hand.

The question of exhaustion was much debated, in part because there were two statutes that could apply. Both the InfoSoc Directive and the Software Directive say that the right holder holds the exclusive right to distribute the work (that is, the creator or original owner) but both also say in Art.4 that that right is exhausted after the first sale. The ECJ decided that this was fulfilled when it comes to software if the acquirer has paid the fair amount for an indefinite (or effectively indefinite, like 99 years) licence.

So far it seemed all was good. We could have a second hand market for software, allowing for example for people to sell on games they had beaten. However, and this is where it gets complicated, the court decided in 2018 that this only applied to software and not to other forms of digital media such as ebooks or music. In the case of Tom Kabinet, the eponymous company would allow the members of its "book club" to download any of the ebooks it owned. They were supposed to not make copies and to delete it when they finished and pass it on, but this was not effectively policed.

The court decided that rather than falling under art 4 (distribution to the public), it fell under art 3 (communication to the public) This is significant, as the Directive is clear that while the copyright owner's distribution right is exhausted with respect of a copy of the work by the first transfer of ownership of that copy with the right-holder's consent, so that the purchaser is free to resell it, the right of communication to the public is not subject to exhaustion.

The ECJ differentiated this from UsedSoft by saying that sending a program is the same as buying the CD original for one, whereas sending an ebook is different to getting a physical book. They decided that software falls under the lex specialis of the Software Directive, but digital media does not because it is not software.

Lex Specialis refers to the rule in law (mostly used in international law) that a more specific law trumps a more general one. If there is a law to do with food production and it clashes with one to do with the cleaning of beef, the more specific latter one would apply.

This raises many problems which have yet to be resolved. Firstly, the ECJ said that receiving a physical book is different to receiving an ebook. While that may be true, what about other forms of digital media (Angelopoulos, C.L.R. 2020)? Buying an album of Nickelback in CD is effectively the same as buying the album online and downloading it, especially nowadays when music is rarely on CDs.

They say programs should be treated differently to other forms of media because they are harder to share, however anyone moderately dedicated could copy a video game on their computer (Van der Donk, E.I.P.R. 2020).

They also say that you cannot sell intellectual property other than software (such as music or books) second hand, but seem to forget that it is almost impossible to find software that does not include IP (Ross, Ent. L. R 2020). Can I sell someone my second hand game but not the music on it?

Why does non-software intellectual property deserve more protection? Why should the people making video games have to accept the loss of income from having people buy second hand instead of from them but authors shouldn't? You could say that it's because there is lex specialis, but the question here is if the law is right, not what the law is, and if you did say that you are a boring person.

Intellectual property refers to the non physical property protected by patent, trademark, copyright etc. Copyright for example protects books, music, plays or software; and patents protect inventions. They make it so people cannot for example write an exact copy of A Song Of Ice And Fire and sell it.

Furthermore, in Tom Kabinet there was the issue that the company did not really make sure that only one person could read the book at a time, and that they deleted it before passing it on. Angelopoulos believes that if the ebook sharing was done properly, which is absolutely possible, the ECJ would likely allow it. It would be much more similar to how once you sell a book second hand you cannot read it again, and the ECJ seems to like that (see Vereniging Openbare Bibliotheken C-174/15).

So really it’s all fairly unclear, but we’ll see how things change and if the ECJ ever decided to make sense. Until then, it seems like most companies are going to be quite careful with any second hand sales, but maybe some enterprising UsedSoft 2 will come along.

[usedsoft]

Ex-BAYER-Chef Manfred Schneider startet ab sofort als neuer usedSoft-Verwaltungsrat durch: „Normalerweise schließen Manager ihr berufliches Wirken mit der zweiten Karriere als Aufsichtsrat ab“, meint das Handelsblatt.

Nicht so Manfred Schneider, der bei usedSoft seine „dritte Karriere“ beginnt.

„Normalerweise“? Gibt es bei uns eh nicht – dafür aber frischen Wind und unschlagbar günstige Preise im Softwaremarkt.

Wir freuen uns, Manfred Schneider als erfahrenen Ratgeber in unserem Team zu haben. Zur Feier des Tages haben wir ein besonderes Angebot für Sie: Wieder erhältlich ist der beliebte

SQL Server 2 Core 2014 Standard 1) zum unschlagbaren Preis für 2.261,60 € 2).

Bestellen Sie gleich bei hier uns im Shop.

(1) Es handelt sich um Volumenlizenzen. Bitte teilen Sie uns mit, wenn Sie einen Installationsdatenträger benötigen.

(2) Alle Preise zzgl. gesetzlicher Mehrwertsteuer. Angebot gültig vom 08.-21.05.2018 und solange der Vorrat reicht.

https://plus.google.com/+usedSoftDeutschlandGmbHMünchen/posts/2AKMtkReaqv

[junkleman]

The exhaustion of intellectual property rights: problems and solutions

In 2004, when the famous Chilean painter Carmen Aldunate appeared on a television program, one of the panellists admitted to owning a fake of one of her paintings. How would anyone find out about this fake in normal circumstances? The same question might be asked when we watch a leased film and see the warning message reminding viewers of the severe penalties imposed for reproducing film illegally (as illustrated in the parody of the first scene of the movie "The Fight Club"). But, is enforcement of such penalties realistic?

The regulation of intellectual property on software has to balance innovation, ownership and the free movement of goods, and to achieve this the exhaustion theory of the right of distribution has been applied. According to this theory, the benefit of the copyright holder is exhausted with the first sale, if the initial acquirer sells the copy with legitimate purposes and eliminates the possibility of reproducing the original copy, as determined by the Court of Justice of the European Union (CJEU) in the UsedSoft versus Oracle case. However, this case did not solve the problematic aspect of how to apply the theory of exhaustion to the ubiquitous digital environment of the internet, nor how to prove the legitimate intention of the third-party acquirer. Strict regulation could start a witch hunt.

Under the Software Directive 2009/24/EC, the exhaustion theory applies a “regionalist” territorial approach, i.e. it has legal effects only in the member countries of the European Union, which could illegally promote the cloud computing market and trade outside the EU. The question then arises as to how to enforce and prove that the initial acquirer has eliminated the possibility of reproducing the copy of the purchased software. One alternative is to allocate the burden of proof on the buyer, in the sense that he must prove that no copies of the resold software have been left. The initial acquirer must have made a sale in accordance with the law and prove that he did so.  

With regard to open source software products, one alternative that safeguards the author’s interests is “Copyleft”, a tool that  offers people the right to freely distribute copies and modified versions of a work with the stipulation that the same rights be preserved in derivative works that are created at a later date. Another option is the General Public Licence (GPL), which aims to guarantee the freedom to share and modify software beyond the immediate contractual scope by ensuring that the software is also free for other subsequent users. Berkeley Software Distribution (BSD) licenses are also an option: they give sole credit and recognition to the authors.

Finally, it could be argued that none of these proposed solutions would mean effective compliance without a socio-cultural change that raises awareness that regardless of what is being is bought or sold, if it is done in violation of the author’s rights it harms society as a whole.  

[hub-pub-bub]

For the past seven years it has been legal to resell software in Europe under what is known as the "UsedSoft" decision, a court ruling that was reaffirmed in a similar case in 2016.

Perhaps inspired by that ruling, a Dutch startup called Tom Kabinet launched a marketplace in 2014 where you could resell ebooks. Tom Kabinet went through a couple years of legal battles before Dutch judges decided they had to seek a ruling EU courts an opinion from EU Advocate General on whether ebook resale was legal under EU law.

That opinion decision was handed down yesterday.

Edit: It's been pointed out to me that this is an opinion, not a ruling. The opinion has been sent to the judges seeing this case, and the case in question has not been decided yet.

EU Advocate General Maciej Szpunar ruled concluded on Tuesday that while there are sound legal arguments to support the idea that you should be able to resell ebooks, it is not legal under EU law.

Here's the important part of the ruling opinion.

The foregoing considerations lead me to conclude that arguments, of both a legal and a teleological nature, are in favour of recognition of the rule of exhaustion of the distribution right with respect to works supplied by downloading for permanent use. In particular, the permanent possession by the user of a copy of such a work shows the similarity of that mode of supply with the distribution of tangible copies. However, I am of the view that, as EU law now stands, the arguments to the contrary should prevail. These are, in particular, the arguments developed in points 36 to 49 of this Opinion, concerning the EU legislature’s clear intention that downloading should be covered by the right of communication to the public, the limitation of the distribution right to acts of transfer of ownership of a copy, and the right of reproduction. Those legal arguments are supported by the arguments of a teleological nature set out in points 89 to 96 of this Opinion.

The "rule of exhaustion" mentioned in the ruling opinion is a legal principle that places limits on the rights of IP owners such as copyright holders.  Once (for example) a print book has been legally sold, the IP owner cannot control how it is resold, lent, or rented.

The exhaustion doctrine has been found to cover software in the EU, but Advocate General Szpunar has concluded the same is not true for ebooks. That has publishers celebrating in the streets, but I would put the cork back in the champagne.

If the EU Advocate General thinks the exhaustion doctrine should also cover ebooks then we are exactly one case away from ebook resale being legal in the EU.

Edit: In fact, that could be this case with Tom Kabinet. We're not done yet.

Remember, Google Books was copyright infringement right up until it was suddenly fair use, and we could see the same happen to ebook resale. I know that is an unpopular opinion in certain circles, but that doesn't make it any less true.

I look forward to the day that happens not because I want to resell my ebooks but because of how the ruling would affect libraries.

If the exhaustion doctrine is extended to cover ebooks then it would invalidate the restrictive licenses placed on library ebooks. There would be no more expiring licenses or checkout limitations; you  could buy an ebook, gift it to a library, and they could share it without having to buy an expensive replacement in two years or after 52 loans.

Can you tell me that would not be a benefit to all?

See Also: Resale of E-books Ruled Illegal in EU

In a move that will be welcome news to publishers and other rights holders, advocate general Maciej Szpunar has ruled sites such as Tom Kabinet that sell second-hand ebooks "unlawful under EU law."

Zoey Forbes, technology, media and entertainment associate at law firm Harbottle & Lewis, said: "Rightsholders of digital works protected by copyright, such as ebooks, music downloads, films and games, will welcome the advocate general's Opinion that the resale of ebooks is unlawful under EU law. The opinion also acknowledges the risks to rightsholders that may arise from a second-hand market for ebooks, including cannibalisation of the primary market and the increased risk of piracy. Although the opinion is not binding on the CJEU [European Court of Justice], it is rare for the CJEU to take a radically different stance, and we therefore expect the CJEU to reach a similar conclusion in its upcoming judgment."

However, the advocate general also noted that there might be justifications for the resale of ebooks, prompting concerned comments from the Federation of European Publishers (FEP). Rudy Vanschoonbeek, the FEP president, said: "The Court of Justice ruling in the present case will have a significant impact on the development and licensing of innovative new services. If the court were to interpret current EU law according to advocate-general's Opinion, i.e. allowing for the principle of exhaustion to be used in relation to digital services, it risks standing in a way of the development of new business models. "In the U.S., the Supreme Court has denied the petition of ReDIGI (an online marketplace for digital services i.e.: digital music, eBooks, games, apps, software) to review the Second Circuit's refusal to apply the First Sale Doctrine to the transfer of digital music files. In European legal terms, this means that the U.S. Courts have confirmed that there can be no exhaustion for digital services. In a globalised market, the rules should be identical."

This article originally ran in the U.K. trade publication BookBrunch.