A judgement of the European Court of Justice (C-419/13) may have significant impact to the classic car-scene. What was the case about?

Allposters marketed posters and other reproductions depicting the works of famous painters, which were covered by copyright. Among other products, Allposters offered its clients reproductions in the form of images on canvases. In order to produce an image on canvas, a synthetic coating (laminate) is first applied to a paper poster depicting the chosen work. Next, the image on the poster is transferred from the paper to a canvas by means of a chemical process. Finally, that canvas is stretched over a wooden frame. The image of the work disappears from the paper backing during the process.

A copyright collecting society opposed the sale of canvas transfers reproducing works protected by copyright without consent of the copyright holder.

The ECJ had to decide, whether the copyright was exhausted with the paper posters used for the canvas transfer.

Under copyright law (and not only), the exhaustion principle limits the rights-holder’s exclusive right to distribute a protected work, where the distribution right is ‘exhausted’ following the first authorised sale of the work. Consequently the rights-holder can no longer prevent further distribution of that work. The exhaustion principle aims to an appropriate balance between the rights-holder’s interests and the free circulation of goods.

According to the ECJ, the rule of exhaustion of the distribution right does not apply in a situation where a reproduction of a protected work, after having been marketed in the European Union with the copyright holder’s consent, has undergone an alteration of its medium, such as the transfer of that reproduction from a paper poster onto a canvas, and is placed on the market again in its new form.

The copyright holders did not consent to the distribution of the canvas transfers. Accordingly, applying the rule of exhaustion of the distribution right would deprive those rights-holders of the possibility of prohibiting those objects from being distributed or, in the event of distribution, of requiring appropriate reward for the commercial exploitation of their works.

What does this mean for the restoration of classic cars? The restoration of classic cars without any doubt does extend the life of a vehicle. Sometimes a restoration comes close to the recreation of a car – in particular when the care was already in an advanced status of decay, or when only a little part of the car remained (eg the “last bullet”). This kind of ground up restorations may rely on original frame and/or engine numbers, but nevertheless the give life to a car that was already dead. This may deprive the original manufacturer of the possibility to exploiting its creation again (like eg Jaguar recently did – see link), or – more realistically, to reserve the restoration business to himself or to licensed restorers.

Consequently, the Allposters-judgement may have significant impact – not only to unlicensed restorers but also for the owners of high end classic cars: In the light of this judgement unlicensed classic car which underwent an (expensive) ground up restoration may lose significantly in value.