Olswang Media Newsletter: latest legal developments in Germany and Europe - July 2014 edition

This article was produced by Olswang LLP, which joined with CMS on 1 May 2017.

• Exhaustion of Distribution Rights does not apply to audio books (Higher Regional Court Hamm)
• Browsing, streaming, caching are not copyright relevant acts (European Court of Justice - ECJ)
• Cooperation of Maxdome and Microsoft: Germany's largest VOD provider will be accessible via Xbox One

Exhaustion of Distribution Rights does not apply to audio books (Higher Regional Court Hamm)

On 15 May, the Higher Regional Court Hamm ruled that the principle of exhaustion of the distribution right does not apply to audio files, such as audio books, that are distributed by the copyright holder via download. Therefore, the copyright holder's terms & conditions may prevent customers who have downloaded the audio file from selling or copying the purchased file. The defendant in the case sells literary works both in conventional printed form and in ebook and audio book version through its internet platform www.buch.de. Regarding the digital version of these audio books and ebooks, the terms & conditions prohibit the purchaser from reselling or copying the downloaded file. The plaintiff, a consumer protection association, submits that this would undermine the principle of exhaustion as set forth in the German Copyright Act, according to which the first sale of a copyright protected work or copies thereof by the rights holder or with its consent in the EU exhausts the distribution right of that copy within the EU, so that the rights holder may not oppose the resale of that copy.

The Court ruled that the principle of exhaustion did not apply to the downloaded audio files, since such files were subject only to the provisions on the "making available to the public" right, and not to provisions on distribution rights. A data file could, by definition, not be "distributed" in the meaning of the German Copyright Act. The Court emphasised that the European Court of Justice's "UsedSoft" decision on the applicability of the exhaustion principle to downloaded software did not apply to audio files, since it only concerned computer programmes as such, and could not be generalised and transferred to other digital content.

Browsing, streaming, caching are not copyright relevant acts (European Court of Justice - ECJ)

In its decision on 5 June, the ECJ held that viewing a website containing copyrighted works does not infringe the copyright holder's reproduction right, even if viewing the website results in copies on the user's screen and in the internet cache of the computer's hard disk.

In the case, members of the PRCA, an association of public relations professionals in the UK, used an online media monitoring service offered by Meltwater Group, which provides monitoring reports on press articles published on the internet. The NLA, a UK body of newspaper publishers for collective licensing, took the view that providing and receiving this service required authorisation from copyright holders, as it infringed their reproduction right. The ECJ decided that such use of the internet falls under Article 5 of the InfoSoc-Directive (Directive 2001/29/EC), which states the conditions under which an act of reproduction shall be exempted from the reproduction right of the copyright holder. On-screen and cached copies that occur in the process of viewing a website satisfy the legal requirements of Article 5 as they are temporary, transient or incidental in nature and constitute an integral and essential part of the technological process. Those copies also do not unreasonably prejudice the legitimate interests of the right holders, since the protected works are made available to internet users by the publishers of the websites and those publishers need to obtain authorisation from the copyright holders concerned. Another authorisation was therefore not justified.

Cooperation of Maxdome and Microsoft: Germany's largest VOD provider will be accessible via Xbox One

Maxdome and Microsoft have announced on 5 June that they will be cooperating to allow Maxdome users to access content via Xbox One. Starting this summer, the Maxdome app will be available on the Xbox and can be integrated in the portal. Maxdome belongs to ProSiebenSat.1 Group and is Germany's largest VOD provider, offering rental and download-to-own (DTO) of more than 60,000 titles on a single purchase or subscription basis. Maxdome is already integrated into most new hybrid TV devices, and will increase the reach of its app to over 35 million devices with this new cooperation.

This newsletter contains general legal information only and, although we endeavor to ensure that the content is accurate and up to date, users should seek appropriate legal advice before taking or refraining from taking any action. The contents of this newsletter should not be construed as legal advice and we disclaim any liability in relation to its use