Copyright Exhaustion

[Lumberjack]

In simple terms, what does "Copyright Exhaustion" mean? I keep hearing about it, and have searched for it on Google, but can't say that I understand any of the answers, apart from the fact that a large number of writers don't seem to like the idea of it being introduced!

[AndyJ]

Hi Lumberjack.

Good to hear from you again.

Copyright can be split down into 3 fundamental rights*: the reproduction right, the distribution right and the right to broadcast, publish or make the work available to the public. Obviously the original concept just involved the reproduction right - the right to authorise the making of physical copies - and the publication right - the right to make those copies available to satisfy public demand.. But with the emergence of new technologies like broadcasting, then digital recording and the ease of disseminating works in digital format over the internet, it became necessary to broaden out these rights since we were no longer concerned just with printed books, musical scores, and analogue photographs and art**.

Exhaustion only affects the distribution right, and occurs when a physical copy of a work is sold or transferred to a person other than the rights holder. So it can apply, for example, to a book, a CD (remember those?), a DVD embodying a feature film, software or a computer game etc. The right of the copyright owner to control these types of physical work after they have been legally transferred to another person is said to be exhausted at the time of the transfer. The copyright owner can't prevent the new owner from re-selling the work, destroying it, or otherwise exercising the normal privileges associated with ownership. In the USA this is known as the First Sale Doctrine.

The exhaustion of the distribution right is fairly narrow. It doesn't allow the new owner to make copies or adaptations of the work he has acquired, and it doesn't apply to goods which have no physical form, such as streamed music or videos, software as a sevice or ebooks, for example.

One of the major reasons why this doctrine has come to prominence is the practice of parallel importation (sometimes referred to as grey imports). One of the elements of the distribution right is the ability of the copyright owner to issue licences which are limited gepgraphically, for example the publishing rights in North America can be separate from the UK publishing rights. Similar constraints can apply to other goods, such as pharmaceuticals, which aren't affected by copyright but may be protected by patents or design rights. With the increasing amount of regulations issued by the EU, a form of exhaustion came into being within the EU when it became unlawful to treat the distribution of goods differentially between the member states. Anything imported into one member states could be freely re-exported to another EU member state and the rights owner could not object. This reflects the principle of the free movement of goods which underscores the EU.

I hope this makes sense in the context in which you have come across the term.

*There are a number of minor rights such as the right to authorise the making of adaptations of a work.
** Technically speaking a piece of original art like a painting is not subject to the distribution right because it is not a copy.

[Lumberjack]

Hi Andy,
Thanks for explanation. I have wondered what it was all about for some time. I have written over 50 e-articles, including a few very long ones, but I rarely find out what happens to them. One was translated into a different language and offered for sale at more than I was asking. I e-mailed them and informed them that it was my copyright, and much to my surprise, they took if off their list without comment.
Best wishes
Lumberjack

[AndyJ]

Just a quick follow up.

When copyright works are put on the internet with the permission of the copyright holder, the main right which protects them is the communication/making available right. However some people have argued that some recent decisions* by the Court of Justice of the European Union (CJEU) in the context of linking, have somehow created a new doctrine of exhaustion with regard to the communication right as well. This because the CJEU has said that where a work is made available on a website without any restrictions (such as paywalls or passwords) then effectively the copyright owner is making the work available to the entire user population of the internet, and thus if another website links to the copyright protected content without actually copying it, no infringement occurs because of the link since the copyright owner would have known that the whole of the internet could, theoretically, access his work. Looked at objectively, this seems like a common sense approach. The court further reasoned that in such circumstances the right of the copyright owner to remove his work from the authorised site remains unaffected, and if he does so, all the links will cease to work, so the copyright owner keeps full control over his work in such circumstances.

Realistically this second bit is a slightly idealistic view since copies of the work will probably have been retained in countless backups of the authorised site, and in cached views of that website held by search engines. This means that some legal copies of the work could continue to exist in cyber space for a long time after the owner decides to remove the work. This, of course, is an entirely separate issue from the fact that some users may have made their own copies of the work when it was legally made available online, even though this would infringe the reproduction right unless the copies were covered by an exception (eg private study or rersearch).

*The main cases are Svensson, Bestwater, GS Media and VG Bild-Kunst. The recent VG Bild-Kunst case is interesting in that it recognises that part of the communication right allows the copyright owner to limit the licence which he attaches to his work when he gives permisssion for it to be made available to the public. For example he could stipulate that the website was to be geo-fenced so that the work could only be accessed in a particular territory. If this sort limitation or restriction is applied to the legal copy, a link which circumvents the restriction would infringe.