Re: [upcoming] The European Court of Justice on 'Software' First Sale

[Tim Jackson]

On Thu, 04 Oct 2012 20:36:36 +0200, Alexander Terekhov wrote...
> 
> Tim Jackson wrote:
> 
> [... the copy concerned being placed on the European market ...]
> 
> Exhaustion of the distribution right covers all lawfully made copies
> owned by strangers regarding copyright in a work fixated in a copy.

No, exhaustion only applies to copies which have been placed on the 
European market by or with the consent of the copyright holder. [1]

There is one additional lawfully made copy to which the copyright owner 
has not consented.  That's the copy permitted by the recent CJEU 
decision.  And that's the copy which you believe brings down the whole 
edifice of copyleft.

You believe - wrongly - that this one copy can be duplicated ad 
infinitum, because in your view the right to distribute it has been 
exhausted.

There are several reasons why that belief is wrong.

One is that the reproduction right still exists.  The reproduction right 
is never exhausted.  Exhaustion only ever applies to the distribution 
right.

Another reason why your belief is wrong is that even when the 
distribution right is exhausted, that happens on a copy-by-copy basis.  
Once a copy is placed on the European market with the consent of the 
copyright holder, that specific copy can be transferred on.  But that 
exhaustion doesn't permit any further copies to be made or distributed 
(except, now, the single replacement copy permitted by the CJEU 
decision, with previous copies made unusable).

The reproduction right is what prevents duplication of further copies - 
unless permission is granted.  The CJEU decision only grants permission 
for reproduction of one single replacement copy, with the previous 
owner's copy being made unusable.  The copyleft licence grants 
permission for reproduction of multiple copies, but only under the 
copyleft conditions.  

The CJEU decision does not permit reproduction of multiple copies to 
which the copyleft conditions do not apply.

> A
> copy does not necessarily have to be transferred to the owner on a
> physical medium or somehow specially "placed on the European market".

It doesn't have to be on a physical medium, but it does have to be 
placed on the European market by or with the consent of the copyright 
holder.  That's the whole basis for the exhaustion doctrine.  

Article 4(2) which you quoted agrees with that.  [1]

> Having the copy made with the authorization of the copyright owner
(i.e.
> with permission to reproduce / prepare derivative works conveyed by the
> copyleft and other public licenses) is enough.

The only copy authorised by the recent CJEU decision is just a single 
replacement copy.  And it's not authorised by the copyright holder, only 
by the decision.

Crucially, for this replacement copy, the decision gives no 
authorisation to reproduce any more copies.  And no authorisation to 
prepare derivative works.  

The permission you are talking about comes from the copyleft licence, 
which is of course still available, in parallel to the decision.  But it 
comes with the copyleft conditions attached.

> It is even possible that some unauthorized copies may fit the bill if
> the circumstances suggest that they are lawfully made.

No.  For exhaustion, being lawful is not enough.  It has to be placed on 
the European  market by or with with the consent of the copyright owner.  
See [1]

> The distribution right comes by statute as addition to the granted
> reproduction right / right to prepare derivative works.

And unless it is exhausted, it is a right which enables the copyright 
holder to *prevent* distribution.

> License contract may attempt to restrict that distribution freedom
> ('only private use, no distribution', copyleft 'conditions' imposed 
for
> distribution of 'further' copies made, etc.) 

It's not a distribution freedom provided by a licence contract.  Unless 
exhausted, it is a right to *prevent* distribution, provided by statute.  
A licence can specify conditions under which the copyright holder is 
prepared to give permission.

> but that has nothing to do
> with statutory tort (copyright infringement) in the case of breach of
> restrictions/requirements for distribution.

The reproduction right is never exhausted.  But the copyleft licence 
permits copies to be made subject to the copyleft conditions.

Exhaustion of the distribution right applies only to specific copies 
placed on the market with the consent of the copyright holder.  He only 
consents to those specific copies which have been made subject to the 
copyleft conditions.

The CJEU decision only allows a replacement copy, with the previous copy 
being made unusable.

There are a few other narrow exceptions to copyright protection, which 
are not relevant here.

Any other copy infringes the copyright.

____________________

[1]  More specifically, Article 4(2) says that what exhausts the 
distribution right is the first sale in the Community by the rightholder 
or with his consent.  Sale is one form of placing the copy on the 
European market.  

As an aside, you might be tempted to think that 'sale' is not really 
applicable to copylefted software anyway, and that therefore exhaustion 
never applies at all if there is no sale.  But there is 50 years of case 
law behind the exhaustion doctrine.  "Placed on the European market by 
or with the consent of the copyright holder" is a concept that comes 
from that case law.  Article 4(2) is just the tip of a very large and 
very well-established iceberg, which is fundamental to European 
intellectual property law. 

-- 
Tim Jackson
news@timjackson.invalid
(Change '.invalid' to '.plus.com' to reply direct)