Advocate General Jääskinen has concluded that there is a distribution by sale in a Member State if a seller targets consumers and enables the purchase of copyright-protected works in that State. In addition, he has found that compliance with copyright protection in this context does not result in a disproportionate effect on the free movement of goods.
Italian company, Dimensione Direct Sales SrL (DDSS), advertised and sold reproduction furniture and designs in Germany. The items were delivered to German buyers by an Italian company called In. Sp. Em Srl (ISES). Under German law, the items were considered to be copies of works protected by copyright, but in Italy either no copyright protection existed or it was unenforceable.
The German authorities prosecuted Mr Donner (the manager of ISES and its majority shareholder) for aiding and abetting the distribution of the items in Germany in breach of German copyright law. Mr Donner was found guilty and appealed to the German Federal Court, claiming that the prosecution was in breach of Article 34 of the Treaty of the Functioning of the European Union (TFEU) as it resulted in a measure equivalent to a quantitative restriction on imports between Member States. The German Federal Court referred the issue to the Court of Justice of the European Union (CJEU) for a preliminary ruling.
Advocate General Jääskinen considered that there was a distribution by sale in a Member State if a seller:
- Targeted consumers in that Member State. In this case, DDSS advertised in Germany and had a German language website.
- Put in place a delivery and payment system to allow consumers to purchase copies of copyright-protected works in that Member State. In this case, the relationship of DDSS with ISES fulfilled this criterion.
As a result, Advocate General Jääskinen concluded that the items had been distributed in Germany in infringement of the exclusive distribution right under Article 4(1) of the Directive 2001/29/EC on the harmonisation of copyright and related rights in the information society (the Directive).
Next, Advocate General Jääskinen considered whether Article 36 of the TFEU placed a disproportionate restriction on the free movement of goods. He concluded that there would be no unlawful partitioning of national markets if the permission of copyright holders was obtained by commercial enterprises before engaging in acts that amounted to a distribution by sale in a Member State. He stated that any restriction on the free movement of goods could not be disproportionate if it ensured compliance with European copyright law. While this is the case for distribution by sale, Advocate General Jääskinen highlighted the fact that if Article 4(1) of the Directive had been interpreted to cover hauliers that acted independently of the seller, the copyright-monitoring obligation would have been so onerous so as to create a disproportionate restriction.
Finally, the issue of criminal sanctions was considered. Advocate General Jääskinen noted that European law does not prevent Member States from imposing proportionate criminal penalties in relation to the behaviour described in this case, and as such it is a matter for the national court to determine whether the punishment is proportionate.
Advocate General Jääskinen is aware of the difficulties internet trading poses for copyright owners. He has taken the position that the law should be interpreted to ensure that copyright is afforded full protection in an e-commerce context. This opinion should reassure copyright owners that their protection will not be undermined by arguments based on the free movement of goods. It also provides helpful guidance on cross-border distance-selling arrangements, stressing that the key element of Article 4(1) of the Directive is the existence of targeted sales and provision of delivery to buyers, not the mode of delivery.