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Re: [upcoming] The European Court of Justice on 'Software' First Sale

From: Tim Jackson
Subject: Re: [upcoming] The European Court of Justice on 'Software' First Sale
Date: Thu, 4 Oct 2012 11:19:33 +0100
User-agent: MicroPlanet-Gravity/3.0.4

On Thu, 04 Oct 2012 10:00:53 +0200, Alexander Terekhov wrote...
> Tim Jackson wrote:
> [...]
> > Again, I've emphasised "that copy".  There's no exhaustion of the right
> > to control the making and distribution of **further** copies.
> Don't blend separate statutory rights together - I mean reproduction
> ("making") and distribution.

I'm not.

> Exclusive distribution right gives copyright owners a right to sue in
> tort not only makers of pirated copies but also distributors who don't
> make pirated copies themselves.


> In the context of copyleft and and other public licenses pirated copies
> simply don't exist and it is simply redundant/not needed to 'grant' the
> distribution right because all copies made by
> licensees/downloaders-without-contract-formation/etc. fall under
> doctrine of exhaustion and can be distributed under shield of statutory
> 'first sale' exception to the exclusive distribution right, not a right
> granted by license contract.

That's where you are going wrong.  

The distribution right covers each individual copy.  After *that copy* 
has been put on the market **by or with the consent of the copyright 
holder**, however, the distribution right is exhausted *for that copy*.  
Thus, *that copy* can be transferred on.  [1]

This doesn't permit the making of any *further* copies that might be 
made in the future from that copy.  

Making such a *further* copy is controlled by the reproduction right.  
Distributing it is controlled by the distribution right (unless and 
until the distribution right has been exhausted for that further copy.)

Note particularly that what triggers the exhaustion is the fact that the 
particular copy concerned has been placed on the European market *by or 
with the consent of the copyright holder*.  There is no exhaustion if 
the copyright owner hasn't consented to the particular copy concerned. 

Note also that the reproduction right is never exhausted.  Exhaustion 
only applies to the distribution right.  To make and distibute a copy, 
you need permission under both.

Therefore, if people are to be allowed to make further copies, they 
first need a licence or permission under the reproduction right.  A 
copyleft licence gives them that permission, subject to the copyleft 

Once a legitimate further copy has been made under the copyleft 
conditions, that further copy can itself now be placed on the European 
market with the consent of the copyright holder.  Now the distribution 
right is exhausted in respect of that further copy.  But only because 
the copyleft conditions have been complied with - the copyright owner 
hasn't consented otherwise.  

But if the copyleft conditions are not accepted, the copy doesn't have 
any consent from the copyright holder.  So the distribution right is not 
exhausted.  Furthermore, the reproduction right was also infringed by 
making the copy.

Now apply the recent CJEU decision.  This says that in the case of the 
transfer of a software licence, the new owner can make a replacement 
copy, so that he can use it.  

But apart from that single exception, the reproduction right is still 
intact.  It is never exhausted; exhaustion doesn't apply to the 
reproduction right.  So the CJEU decision doesn't permit making any 
further copies.  

Nor does the CJEU decision legitimise the distribution of any such 
further copies.  The copyright owner hasn't consented to any such 
further copies being placed on the Europen market.  So the distribution 
right is not exhausted.

If the software is copylefted, there is only one way that further copies 
can be made legitimately: by complying with the copyleft conditions.

And there is only one way in which the copyright owner gives consent to 
placing such copies on the European market: in accordance with the 
copyleft conditions.  

Without the copyleft conditions, there is no consent, and the 
distribution right is not exhausted.  A court decision doesn't mean that 
the copyright holder has consented.


[1] See Article 4(2) which you quoted.  "The first sale in the Community 
of a copy of a program **by the rightholder or with his consent** shall 
exhaust the distribution right within the Community of that copy...".

Tim Jackson
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