Short Reads

European Court of Justice 12 October 2016 (Alexandrs Ranks – Jurijs Vasiļevičs)

European Court of Justice 12 October 2016 (Alexandrs Ranks – Jurijs Vasiļevičs)

European Court of Justice 12 October 2016 (Alexandrs Ranks – Jurijs Vasiļevičs)

24.02.2017

CJEU re-affirms Usedsoft judgment[1] but finds that lawful computer program acquirers may not resell back-up copies of those programs

On 12 October 2016, the Court of Justice of the European Union ("CJEU") rendered its judgment in the Ranks and Vasiļevičs case. This is an interesting judgment because it is the first decision after the UsedSoft case regarding the rule of exhaustion of the computer program copyright protection under the Computer Program Directive, which generated a lot of media attention and opened up a market for "second-hand" software.[1]

The origin of the Ranks and Vasiļevičs case lies in Latvia, where criminal charges were brought against Aleksandrs Ranks and Jurijs Vasiļevičs, for the unlawful sale of goods protected by copyright and for the intentional unlawful use of another person’s trademark. More specifically, Ranks and Vasiļevičs were charged with violating Latvian criminal law by selling various copyright-protected Microsoft computer programs. It was estimated that they sold more than 3,000 copies of these Microsoft programs and the value of the material damage caused to Microsoft by the unlawful activities of Ranks and Vasiļevičs would be €265,514.

During the proceedings in Latvia, Mr Ranks and Mr Vasiļevičs asked the Criminal Law Division of the Riga Regional Court in Latvia to submit a request to the CJEU for a preliminary ruling on the interpretation of Articles 4 and 5 of the Computer Programs Directive, which led to the judgment at hand. In essence, the Latvian Court asked the CJEU two questions: whether Articles 4(a) and 4(c), and Articles 5(1) and 5(2) of Directive 91/250 must be interpreted as meaning that the acquirer of a used copy of a computer program, which is stored on a non-original material medium, may, under the rule of exhaustion of the rightholder’s distribution right, resell that copy where (i) the original material medium of that program, acquired by the initial acquirer, has been damaged and (ii) that initial acquirer has erased his copy or ceased to use it.

The CJEU reaffirms its Usedsoft judgment by considering that the term “sale” in Article 4(c) of Directive 91/250 must be given a broad interpretation. Sale thus encompasses all forms of marketing of a copy of a computer program characterised by the grant of a right to use that copy, for an unlimited period, in return for payment of a fee designed to enable the copyright holder to obtain a remuneration corresponding to the economic value of that copy.[2] In principle, this includes such cases as the one at hand in which the copyright holder (Microsoft) markets its computer program, which is stored on a medium such as a CD/DVD-ROM, constituting a first sale where such medium is accompanied by a 'perpetual' license. If such a perpetual right is purchased, the copyright holders' rights regarding that copy are exhausted, and the acquirer may resell that copy, even if the applicable license terms contain an interdiction to do so.[3]

However, the Latvian questions do not concern the resale by an acquirer (whether he acquired it from the initial buyer or a subsequent buyer) of the used copy of a computer program that is stored on the original material medium, but rather the resale of the used copy of a computer program that is stored on a non-original material medium. The CJEU holds that the Directive must be interpreted as meaning that the initial acquirer may not, in the situation in which the original material medium has been damaged, destroyed, or lost, provide its back-up copy of that program to that new acquirer without the rightholder’s authorization.

The case (C‑166/15) can be found here.

 

[1] Judgment of 3 July 2012, UsedSoft, C‑128/11, EU:C:2012:407.

[2] For an example of attention given by the Dutch press to the Usedsoft judgment, please see: S. Olsthoorn: “Oude software is een verborgen schat”, Het Financieel Dagblad, 27 December 2016.

[3] See judgment of 3 July 2012, UsedSoft, C‑128/11, EU:C:2012:407, paragraph 49.

[4] See judgment of 3 July 2012, UsedSoft, C‑128/11, EU:C:2012:407, paragraph 77

 

Team

Related news

22.07.2021 NL law
Towards a European legal framework for the development and use of Artificial Intelligence

Short Reads - Back in 2014, Stephen Hawking said, “The development of full artificial intelligence could spell the end of the human race.” Although the use of artificial intelligence is nothing new and dates back to Alan Turing (the godfather of computational theory), prominent researchers – along with Stephen Hawking – have expressed their concerns about the unregulated use of AI systems and their impact on society as we know it.

Read more

18.06.2021 NL law
FAQ: Wat houdt het Wetsvoorstel elektronische gegevensuitwisseling in de zorg (Wegiz) in en wat is de verhouding tot de AVG?

Short Reads - (Digitale) gegevensuitwisseling in de zorg is een actueel thema. Illustratief is een item bij EenVandaag van april 2021 waarin de analoge werkwijze bij gegevensuitwisseling in de zorg wordt aangekaart, maar ook dit artikel in het NRC van afgelopen maand waarin verslag werd gedaan van een datalek waardoor duizenden gevoelige patiëntgegevens op straat kwamen te liggen. 

Read more

19.07.2021 BE law
One year of Schrems II: a state of affairs for international data transfers

Articles - International data transfers have been the subject of intense debates ever since the Court of Justice issued its landmark judgement of Schrems I, on 6 October 2015. The intensity of the debate was further reinforced since the Schrems II decision one year ago, on 16 July 2020. The decision annulled the U.S. Privacy Shield and severely tightened the rules on the use of standard contractual clauses (“SCCs”).

Read more

18.05.2021 NL law
Kroniek: De bestuursrechtelijke aspecten van de AVG

Articles - Tom Barkhuysen, Steven Bastiaans en Fatma Çapkurt (Universiteit Leiden) schreven samen de eerste editie van de nieuwe jaarlijkse NTB kroniek: de bestuursrechtelijke aspecten van de AVG. Hierin bespreken zij onder meer de meest relevante (bestuursrechtelijke) jurisprudentie van het afgelopen jaar op het gebied van de AVG.

Read more