Distribution already starts with promoting the product regardless whether the advertised product is actually bought or nor. This is, in a nutshell, the take-away of the most recent decision, the Court of Justice of the European Union (CJEU) rendered with regard to the interpretation of Article 4 (1 of the InfoSoc Directive 2001/29 on the harmonization of certain aspects of copyright and related rights in the information society (CJEU, judgment of 13 May 2015, C-516/13 – Dimensione vs. Knoll).
The case at issue was originally referred to the CJEU in 2013 by the German Federal Court of Justice. The German judges had to deal with an Italian manufacturer of designer furniture which offered its products via Internet, in various German newspapers and magazines as well as in a German advertising brochure. The Italian firm was not in possession of a license from the Knoll group which actually held the copyrights to the designs once created by such famous designers as Marcel Breuer ( “Wassily”, “Laccio” table, etc.) and Ludwig Mies van der Rohe (“Barcelona” chairs, stools, couches and tables, “Brno” and “Prague” chairs, etc.). Not surprisingly, Knoll took offense of the advertising in Germany. However, as the sale and purchase took place in Italy and only the promotion was directed to the German consumers, the judges had to decide whether mere promotion falls within the definition of the distribution right as set out in Article 4 (1) of the Directive 2001/29.
The first and second instance courts both ruled in favour of Knoll and banned the Italian manufacturer form promoting its products in Germany. The German Federal Court eventually stayed the proceedings and referred three questions to the CJEU for a preliminary ruling. In first place, the German judges wanted to know whether the distribution right under Article 4 (1) of the Directive 2001/29 includes the right to offer the original or copies of the work to the public for sale. If the first question were to be answered in the affirmative, then two follow-up questions were posed: Does the right to offer relate to contractual offers only or are pure advertising measures covered as well? And, is it of relevance whether the promoted product is actually sold on the basis of the promotion?
The CJEU interprets the exclusive right to distribute a copyright-protected work as defined in Article 4 (1) of the Directive 2001/29 in a truly broad and embracing sense. The judges do so in reference to the notion of “distribution” constituting an independent concept of EU law. Further, it is emphasized that any EU legislation must, so far as possible, be interpreted in a manner that is consistent with international law, in particular where its provisions are intended specifically to give effect to an international agreement concluded by the European Union, such as the WIPO Copyright Treaty of 1996 (see also CJEU, C-5/11 – Donner).
Against this background, the CJEU points out that any “distribution to the public” is characterised by a series of acts eventually culminating in the conclusion and performance of a contract of sale (see CJEU, C-98/13 – Blomqvist). This series may very well commence with acts or steps preceding the actual conclusion of the purchase agreement. According to the judges, also a mere invitation to submit an offer, or a non-binding advertisement for a protected object also fall under the series of acts taken with the objective of selling the respective object. This applies irrespectively from whether the offer is of pure domestic nature or stemming from a merchant seated in another Member State, but directed to the domestic consumers by way of a website, print ads or brochures held in the respective language.
Further, the CJEU rules that it is irrelevant, for a finding of an infringement of the distribution right, that such advertising is not followed by the transfer of ownership of the protected work or a copy thereof to the purchaser. Rather, it is already sufficient to invited, by targeted advertising, third parties to acquire ownership of the original or a copy of that work.
By accepting pure promotional acts as adequate in terms of the concept of contribution to the public, the CJEU clearly chooses an opening gate for Article 4 (1) of the Directive 2001/29 which is quite “upstream”. Hence, right holders will, in practice, benefit quite substantially from the current ruling. For, they neither need to prove the existence of a binding offer of a contract of sale nor the actual sale of the work at issue. As a matter of fact, the threshold for demonstrating mere promotional activity that is intended to eventually bring about the sale of the promoted product is recognizably lower.
However, it can already be anticipated that those who wish to criticize the CJEU’s approach will point to the very wording of Article 4 (1) of the Directive 2001/29. Distribution and advertising can also, at least in principle, be very well perceived as two separate concepts. Still, the CJEU’s broad notion of the exclusive distribution right deserves affirmation. The border line, however, should be drawn where the promotions remains within the concept of mere image advertising. Such activity is not yet to be seen as distribution of a specific work.