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Who has exhausted the right?

In conditions of cooperation with EU member states, national companies must take into account and adapt to the rules that apply in the EU market for goods and services, as well as the procedure for filing a claim against acc.

At the same time, the principle of territoriality applies in intellectual property law, that is, each EU member state acts within the framework of its IP legislation, although in general such legislation is harmonized with EU Directives in this area. In addition, the European Court of Justice is vested with competence regarding the interpretation of the rules of directives, and such interpretation must be taken into account when applying the provisions of the directives to EU member states.

At the same time, given the beginning of the Association Agreement between Ukraine and the European Union, the legal positions formulated in the decisions of the European Court of Justice can be taken into account by the administrative courts as an argument, judgments on the harmonious interpretation of the national legislation of Ukraine in accordance with the adopted standards of the legal system of the European Union , however, not as a legal basis (source of law) for the settlement of relations on which a dispute arose.

In accordance with Art. 160 Association Agreement: “The parties are free to establish their own regime of exhaustion of intellectual property rights, subject to the provisions of the TRIPS Agreement.”

At the same time, in this part, the legislation of Ukraine is harmonized with international legislation. And h. 7 tbsp. 15 of the Law of Ukraine “On Copyright and Related Rights” reflects the content of parts 1, 2 of Art. 4 of Directive 2001/29 / EC “On the harmonization of certain aspects of copyright and related rights in the information society”: “the first sale of a copy or original of a work protected by copyright by the copyright holder or with his consent determines the exhaustion of the right to distribution. The copyright holder has neither the right to prohibit such resale, nor to demand compensation. ”

The European Court of Justice on January 22, 2015 decided in case s-419/13, which explained how the theory of exhaustion of rights is applied in digital copies of works protected by copyright.

According to this decision, the exhaustion of rights due to distribution through the first sale applies to tangible objects in which the protected object is embodied. So, the first sale of an intangible digital copy of a work does not likely exhaust the right to distribute such copies. This means that the resale of digital music, films, e-books is likely to be considered a violation of copyright, provided that it is carried out without the consent of the author.

The essence of the dispute

In legal relations, the Dutch company Allposters bought a copy of the work of art (on paper) by the famous author at Pictoright, the first sale of which was carried out with the consent of the copyright holder.

Allposters digitized the product using special processes so that the image can exist exclusively in digital form in canvas format. Moreover, this technology does not allow you to save the image on paper, and the reproduction in canvas format is more similar to the original than the reproduction on paper.

Allposters has posted such a digitized copy for sale on its website. Allposters argued that: 1) the processing of a copy of the picture, after the right to distribute it has been exhausted, does not affect the exhaustion of rights that took place earlier; 2) transferring an image from paper to digital format is not a reproduction of a work, since the image is not duplicated.

Case decision

By decision s-419/13 of 01.22.2015, the European Court of Justice states that the exhaustion of the right of distribution applies to an object of intellectual property right that is embodied on tangible media (in this case a paper poster), and the processing of such tangible media that leads to creating a new object (in this case, a canvas image) is a new reproduction of a work that requires the consent of the copyright holder.

Buying DVD videos, printed books, paintings that were first sold in the EU with the consent of the author (copyright holder), subsequent sale of DVDs, books, paintings can be done to any other person within the EU without the consent of the copyright holder.

The European Court of Justice so ruled that “the rule of exhaustion of the right to distribution … does not apply if the reproduction of a protected work, after its introduction to the EU market with the consent of the copyright holder, if such a work has undergone changes in the material form (from material to digital), and was reintroduced into civilian circulation on the EU market in a new form. ”

Changing the form of the work, the result of which is the creation of a new object in which the image of the protected work is embodied, while the poster ceased to exist.

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