Under Article 4 of the Copyright Directive (2001/29/EC), also known as the InfoSoc Directive, authors have an exclusive right to distribute their copyright works, but that right is exhausted when ownership of a work is transferred by the rightholder or with its consent. This exclusive distribution right allows an author to control the first release of their work, but it also allows that work to be sold subsequently without the author’s consent (for example, in the sale of second-hand books).
This may seem straightforward, but the Court of Justice of the European Union (CJEU) recently had to consider the application of this right where a copyright work had been transformed. The issue arose in the case of Art & Allposters vStichting Picoright, which was referred to the CJEU from the Supreme Court of the Netherlands. Stichting Picoright managed the copyright to a certain work and reproduced that work on posters with the artist’s consent. Art & Allposters then used Stichting Picoright’s posters to create their own range of canvases by applying a synthetic coating to the posters and transferring the image using certain chemicals. The Supreme Court asked the CJEU if Article 4 of the InfoSoc Directive still applied to works that had been altered in this way and marketed in their altered form without the original author’s consent.
On 22 January 2015 the CJEU gave its decision, saying that there were two main aspects to be considered: 1) whether the InfoSoc Directive protected the physical representation of the work or the creator’s intellectual creation; and 2) if the alteration of the work affected the application of the exhaustion of the author’s right to control distribution.
Firstly, the CJEU ruled that Article 4 of the InfoSoc Directive only applied to the physical work and not the author’s intangible creation.
Secondly, the CJEU held that: “Article 4(2) of Directive 2001/29 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.”
Accordingly, if a work has been altered from its original form then the original author should have the right of first distribution of this altered work. Then, only after the first sale or transfer of ownership of the work in its altered form, will the exclusive distribution right in the altered work be deemed to be exhausted. The CJEU recognised that to determine otherwise would have a detrimental effect on the owner of the copyright as it cannot foresee every form its work might take and in some situations the altered work would be of greater economic value than the original work, as was the case in Art & Allposters.
This ruling confirms the application of Article 4 of the InfoSoc Directive with regard to tangible work, although it does still leave some room for interpretation. The CJEU recognised that the decision would need to be made on a case-by-case basis as it would first need to be determined whether the altered work had been altered significantly enough to need consent from the original copyright owner.