Advertising for fake/counterfeit Barcelona and Wassily chairs is infringement of distribution copyright in the EU, Dimensione Direct Sales srl and Michele Labianca v Knoll International SpA, C-516/13.

The EU Copyright distribution right also entails advertising fake copyright protected works and its originals

Since the judgment of the Court of the EU in Peek & Cloppenburg (C‑456/06, EU:C:2008:232, paragraphs 33, 36 and 41) - which concerned the option of using reproductions of a protected work, that the concept of distribution to the public of the original of a work or a copy thereof, for the purpose of Article 4(1) of Directive 2001/29, entails a transfer of the ownership of that object- the question was whether the sole advertising of fake, copyright infringing products in the territory of the EU Member State in which the (original) work is protected to consumers located in that territory are invited to acquire ownership of the original or a copy of that work falls under the distribution right of the copyright ownwer as set out in Article 4 (1) of Directive 2001/29/EC.

That question has now been answered in Dimensione Direct Sales srl and Michele Labianca v Knoll International SpA, C-516/13. : the right of distribution to the public of a copyright protected work also entails the right to forbid advertising of fake copyright protected works (even in case the work advertised is not copyrigh protected in the country where the actual purchase of the product takes place. The complete text of the judgment can be found here

This case is an absolute victory for copyright owners.

Contents of the ECJ EU Case Direct Sales srl and Michele Labianca v Knoll International SpA, C-516/13 in short: Reference for a preliminary ruling — Copyright — Directive 2001/29/EC — Article 4(1) — Distribution right – Concept of ‘distribution to the public’ — Offer for sale and advertising by a trader of a Member State on its website, by direct mail and in the press in another Member State — Reproductions of protected furniture for sale without the consent of the holder of the exclusive distribution right — Offer or advertising not leading to the purchase of the original or copies of a protected work.

 History of the case
 In 2005 and 2006, Dimensione advertised furniture similar to the protected designs on its website, which is available in German, and in various German daily newspapers and magazines and in an advertising brochure, stating as follows: 

‘Buy your furniture from Italy, but pay nothing until collection or delivery by a forwarding agent authorised to take payment (service arranged on request).’ 

Since it believed that the items of furniture offered for sale by Dimensione were imitations or counterfeit versions of the protected designs, Knoll brought an action against Dimensione and Mr Labianca before the Landgericht Hamburg (Regional Court, Hamburg) seeking an order prohibiting them from offering that furniture for sale in Germany. In support of its action, Knoll submitted that those items of furniture are protected under copyright law as works of applied art. In its view, by advertising copies of the protected designs in Germany, Dimensione infringed its rights and those of its parent company under Paragraph 17(1) of the Law on copyright and related rights of 9 September 1965, as amended. 

The Landgericht Hamburg granted Knoll’s application. The Hanseatisches Oberlandesgericht Hamburg (Higher Regional Court, Hamburg), ruling on the appeal brought by Dimensione and by Mr Labianca, upheld the judgment given at first instance. Dimensione and Mr Labianca then brought an appeal on a point of law (‘Revision’) before the Bundesgerichtshof (the referring court).

  Questions asked by the German Court (referring court) to the European Court of Justice:

‘1.      Does the distribution right under Article 4(1) of Directive 2001/29 include the right to offer the original or copies of the work to the public for sale?

If the first question is to be answered in the affirmative:

2.      Does the right to offer the original or copies of the work to the public for sale include not only contractual offers, but also advertising measures?

3.      Is the distribution right infringed even if no purchase of the original or copies of the work takes place on the basis of the offer?’

Legal context

 International law

3        On 20 December 1996 the World Intellectual Property Organisation (WIPO) adopted in Geneva the WIPO Copyright Treaty (‘CT’), which was approved on behalf of the Community by Council Decision 2000/278/EC of 16 March 2000 (OJ 2000 L 89, p. 6). 

4        Article 6 of the CT, headed ‘Right of distribution’, provides, in paragraph 1:

‘Authors of literary and artistic works shall enjoy the exclusive right of authorising the making available to the public of the original and copies of their works through sale or other transfer of ownership.’

 EU law

5        Recitals 9 to 11 and 28 in the preamble to Directive 2001/29 state:

‘(9)      Any harmonisation of copyright and related rights must take as a basis a high level of protection, since such rights are crucial to intellectual creation. …

(10)      If authors or performers are to continue their creative and artistic work, they have to receive an appropriate reward for the use of their work. …

(11)      A rigorous, effective system for the protection of copyright and related rights is one of the main ways of ensuring that European cultural creativity and production receive the necessary resources and of safeguarding the independence and dignity of artistic creators and performers.

...

(28)      Copyright protection under this Directive includes the exclusive right to control distribution of the work incorporated in a tangible article. The first sale in the [European Union] of the original of a work or copies thereof by the rightholder or with his consent exhausts the right to control resale of that object in the [European Union]. …’

6        Article 4 of that directive, entitled ‘Distribution right’, provides:

‘1. Member States shall provide for authors, in respect of the original of their works or of copies thereof, the exclusive right to authorise or prohibit any form of distribution to the public by sale or otherwise.

2. The distribution right shall not be exhausted within the [European Union] in respect of the original or copies of the work, except where the first sale or other transfer of ownership in the [European Union] of that object is made by the rightholder or with his consent.’

 German law

7        In accordance with Paragraph 15(1)(2) of the Law on copyright and related rights (Gesetz über Urheberrecht und verwandte Schutzrechte — Urheberrechtsgesetz) of 9 September 1965 (BGBl. 1965 I, p. 1273), the author is to have the exclusive right to exploit his work in material form. That right is to include in particular the right of distribution.

8        Paragraph 17(1) of that Law, as amended, provides:

‘The right of distribution is the right to offer to the public or to put into circulation the original or copies of the work.

...’

Conclusion

31      There may be an infringement of the exclusive distribution right, under Article 4(1) of Directive 2001/29, where a trader, who does not hold the copyright, sells protected works or copies thereof and addresses an advertisement, through its website, by direct mail or in the press, to consumers located in the territory of the Member State in which those works are protected in order to invite them to purchase it. 

32      It follows from that conclusion 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.

33      Indeed, although it is true that the Court has held, in its judgment in Peek & Cloppenburg (C‑456/06, EU:C:2008:232, paragraphs 33, 36 and 41), which concerned the option of using reproductions of a protected work, that the concept of distribution to the public of the original of a work or a copy thereof, for the purpose of Article 4(1) of Directive 2001/29, entails a transfer of the ownership of that object, the fact remains that an infringement of the distribution right can be observed where consumers located in the territory of the Member State in which that work is protected are invited, by targeted advertising, to acquire ownership of the original or a copy of that work.

34      That interpretation is consistent with the objectives of that directive set out in recitals 9 to 11, which state that the harmonisation of copyright must take as a basis a high level of protection, that authors have to receive an appropriate reward for the use of their work and that the system for the protection of copyright must be rigorous and effective (see judgment in Peek & Cloppenburg, C‑456/06, EU:C:2008:232, paragraph 37).

35      In the light of the foregoing considerations, the answer to the questions referred is that Article 4(1) of Directive 2001/29 must be interpreted as meaning that it allows a holder of an exclusive right to distribute a protected work to prevent an offer for sale or a targeted advertisement of the original or a copy of that work, even if it is not established that that advertisement gave rise to the purchase of the protected work by an EU buyer, in so far as that that advertisement invites consumers of the Member State in which that work is protected by copyright to purchase it.