Re:

https://emeapressoffice.oracle.com/Press-Releases/Bundesgerichtshof-l...

See:

http://www.usedsoft.com/images/pdf/presseinfo/usedSoft_PM_usedSoft_sa...

More:

http://www.ipo.gov.uk/pro-policy/policy-information/ecj/ecj-2011/ecj-...

"IPO Pro Home>
IP Policy>
Policy information>
ECJ cases>
2011>
C-128/11

C-128/11

Oracle International Corporation, Redwood Shores, CA, USA v UsedSoft
GmbH, Munich

This case raises the following questions which have been sent to the
Court of Justice for a preliminary ruling:

1. Is the person who can rely on exhaustion of the right to distribute a
copy of a computer program a 'lawful acquirer' within the meaning of
Article 5(1) of Directive 2009/24/EC?

2. If the reply to the first question is in the affirmative: is the
right to distribute a copy of a computer program exhausted in accordance
with the first half-sentence of Article 4(2) of Directive 2009/24/EC
when the acquirer has made the copy with the rightholder's consent by
downloading the program from the internet onto a data carrier?

3. If the reply to the second question is also in the affirmative: can a
person who has acquired a 'used' software licence for generating a
program copy as 'lawful acquirer' under Article 5(1) and the first
half-sentence of Article 4(2) of Directive 2009/24 also rely on
exhaustion of the right distribute the copy of the computer program made
by the first acquirer with the rightholder's consent by downloading the
program from the internet onto a data carrier if the first acquirer has
erased his program copy or no longer uses it?"

http://www.computerworlduk.com/news/public-sector/3262942/european-co...

European Court of Justice to rule on software licence trading

Judgment in Oracle vs usedSoft case to determine legality

By Jennifer Baker | IDG News Service | Published 15:17, 28 February 11

The European Court of Justice (ECJ) has been asked to decide whether the
trading of "used" software licences is legal.

The German Federal Court of Justice referred the question to the ECJ
following a legal battle between Oracle and usedSoft, a company that
buys and sells used software. Oracle launched the case after usedSoft
offered "pre-used" Oracle software licences online in October 2005.

Oracle says that its licence agreements with its customers contain
provisions to the effect that the software can't be used by a third
party.

However usedSoft argues that it acquired a notarized statement from the
original licensee that he was the lawful holder of the licences, that he
no longer used the licensed programs and that he had paid the purchase
price in full. usedSoft’s customers who acquired a "used" licence
downloaded the software from Oracle’s website.

The German Regional Court originally ruled in favour of Oracle, but
following usedSoft’s appeal, the federal court decided to refer the
matter to the ECJ. The European court will consider how directive
2009/24/EC on the legal protection of computer programs should be
applied in this case. This will also set a precedent for trading of used
software licences throughout the European Union.

The ruling should also clarify the legal status of individuals who have
purchased used licences. usedSoft welcomed the decision to involve the
European Court of Justice.

“Ultimately, the resale of downloaded software is based on European
regulations which must also be clarified for all of Europe," said
usedSoft managing director Peter Schneider. "We regard this to be an
important stepping stone victory on the way to truly free trade on the
software market."

The ECJ may take up to two years to rule on the case. Oracle said it
would not comment on the case.

Official death of copyleft in EU:

http://www.gamerlaw.co.uk/2012/07/legality-of-second-hand-sales-in-eu...

"...

The case related to a dispute between software companies Oracle and
UsedSoft over whether UsedSoft could sell businesses and consumers used
licences for Oracle software without Oracle’s permission (previously
discussed here).  Oracle therefore took UsedSoft to court in Germany,
which was referred to the Court of Justice of the European Union
("CJEU").

...

Key Issue 1: is the sale of software a "first sale"?

The CJEU held that 'sale' means "an agreement by which a person, in
return for payment, transfers to another person his rights of ownership
in an item of tangible or intangible property belonging to him" (para
42).

Whether there is a first sale of software therefore depends on whether
that "right of ownership" is transferred by the software developer to
the purchaser.

Oracle argued that there is no right of ownership transferred to its
purchasers, and therefore no "first sale" of its software at all,
because it makes its software available for free download and separately
enters into licence agreements with a downloader in return for that
downloader paying a fee.  Oracle argued therefore that this was
therefore a licence arrangement, not a sales arrangement.

The CJEU disagreed.  It held "the downloading of a copy of a computer
program and the conclusion of a user licence agreement for that copy
form an indivisible whole. Downloading a copy of a computer program is
pointless if the copy cannot be used by its possessor. Those two
operations must therefore be examined as a whole for the purposes of
their legal classification" (para 44).

The CJEU therefore decided that making software available for download
while at the same time entering into a licence agreement with the
downloader and receiving payment for it "examined as a whole, involve
the transfer of the right of ownership of the copy of the computer
program in question" (para 45).

So, the CJEU held that since the sale of software involved a "transfer
of ownership" in the software from the developer to the purchaser, that
means it also constitutes a "first sale" under the InfoSoc Directive.
That in turn means that the developer's right of distribution is
exhausted by that first sale (para 48).

Key Issue 2: so if the sale of software by the developer to a first
purchaser constitutes a first sale that exhausts the right of
distribution, can the developer still control second hand sales using
its right of reproduction?  

The key to understanding this issue is to remember that there are
separate rights of distribution and rights of reproduction in EU
copyright law.  By this stage in the case, the CJEU had decided that
rights of distribution weren't a problem for second hand sales.  Now it
had to decide whether software developers retain an exclusive right to
control reproduction under Article 5(1) of Directive 2009/24 (aka the
'Computer Programs Directive') (which, if they do, could still be used
to prohibit second hand sales).

Essentially, the CJEU decided that the right to control reproduction is
lost against the second purchaser (the reasons why take some explaining,
but essentially it is because a second purchaser is held to be a "lawful
acquirer" of the software under Article 5(1) of the Computer Program
Directive).

Other issues discussed:

Issue 3: can the wording of the EU legislation be read such that the
first sale/exhaustion of rights principle only applies to tangible
software?

No, said the CJEU following some slightly complex discussion of the
relevant legislation (paragraphs 55 – 58).  Later, it said:  "…from an
economic point of view, the sale of a computer program on CD-ROM or DVD
and the sale of a program by downloading from the internet are similar.
The on-line transmission method is the functional equivalent of the
supply of a material medium" (para 69).

And even more clear still: "To limit the application…of the principle of
the exhaustion of the distribution right …solely to copies of computer
programs that are sold on a material medium would allow the copyright
holder to control the resale of copies downloaded from the internet and
to demand further remuneration on the occasion of each new sale, even
though the first sale of the copy had already enabled the rightholder to
obtain an appropriate remuneration. Such a restriction of the resale of
copies of computer programs downloaded from the internet would go beyond
what is necessary to safeguard the specific subject-matter of the
intellectual property concerned" (para 63).

Issue 4: does it matter that the software has been
patched/updated/changed between being bought by the first purchaser and
then transferred to the second purchaser?

Oracle argued that, because the software in question had been updated
under a maintenance agreement since it was bought by the first
purchaser, it could not be said that the second purchaser was purchasing
the same software.  Therefore, Oracle said, there could not be an issue
of exhaustion of rights here.
The CJEU disagreed.  It said: "the exhaustion of the distribution right
under Article 4(2) of Directive 2009/24 extends to the copy of the
computer program sold as corrected and updated by the copyright holder"
(para 68).

Issue 5: what happens if the first purchaser acquires more licences than
he actually needs?

The CJEU said that the first purchaser couldn't then slice and dice the
licences into piece and sell them off individually – they had to be
transferred en masse (para 69).  (This is only likely to be relevant in
block licence deals of course).

Issue 6: what happens to the first purchaser's installed copy of the
software once he has sold it to a second purchaser?

The CJEU held that the first purchaser needs to "make his own copy
unusable at the time of its resale…in order to avoid infringing the
exclusive right of reproduction of a computer program which belongs to
its author", laid down in Article 4(1)(a) of Directive 2009/24".

(This makes sense – if you sell the software on you shouldn't have the
right to keep using it – otherwise you won't really have sold it at
all).

Later on, the CJEU acknowledged that in practice this could impose
difficulties on the software developer because it'd be hard to know
whether the first purchaser has made his copy "unusable".  The CJEU
therefore briefly commented "to solve that problem, it is permissible
for the distributor – whether ‘classic’ or ‘digital’ – to make use of
technical protective measures such as product keys".

Issue 7: can a software developer stop second hand sales on the basis
that the second purchaser hasn't signed a licence agreement with the
developer?

Some EU governments argued that a "lawful acquirer" could only be
someone who had signed a licence agreement with the developer (i.e. if
you don't sign a EULA, you can't sell the game on).
The CJEU disagreed and said: "that argument would have the effect of
allowing the copyright holder to prevent the effective use of any used
copy in respect of which his distribution right has been exhausted …by
relying on his exclusive right of reproduction … and would thus render
ineffective the exhaustion of the distribution right under Article 4(2)"
(para 83).

Issue 8: does it change things if the developer calls the software
transfer a 'licence' not a 'sale'?

No.  The CJEU held "if the term ‘sale’ within the meaning of Article
4(2) of Directive 2009/24 were not given a broad interpretation as
encompassing all forms of product marketing characterised by the grant
of a right to use a copy of a computer program, 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 the copy
of the work of which he is the proprietor, the effectiveness of that
provision would be undermined, since suppliers would merely have to call
the contract a ‘licence’ rather than a ‘sale’ in order to circumvent the
rule of exhaustion and divest it of all scope" (para 49)."

        [Dropping news:comp.os.linux.advocacy, for nntp://aioe.org/ is
        unlikely to allow it.]

 > Official death of copyleft in EU:

 > http://www.gamerlaw.co.uk/2012/07/legality-of-second-hand-sales-in-eu...

        Well, thanks for an early warning, but frankly, I don't quite
        understand what it has to do with copyleft?

        While the growing acceptance of the "information as a property"
        idea is disturbing, this particular court decision may be a move
        in a direction that isn't exactly wrong.  For decades, the
        powers behind this "intellectual property" misconception have
        reminded us that "you steal when you copy", and "you're pirating
        when we're to lose our profits" (despite the fact that the
        piracy is outlawed not only because it leads to lost /profits/,
        but first and foremost because it leads to lost /lives/), and
        now they've got what they've wanted: the thing one can steal,
        the other can resell.  Quite an obvious thing, should one think
        of it!

        And where they would go next?  It's my understanding that one's
        free to examine his or her own property, to disassemble or
        improve it, -- it may be a hammer, or it may be a radio, or a TV
        (and indeed, we've got a glorious past to remember, that of
        radio amateurs constantly improving their very own equipment.)
        Now, would the same principle be applied to a program?  I wonder
        if there'll soon be a law that gives everyone the freedom to
        study how a program works, and to change it to make it do what
        you wish (just like you can do to your property!), and do that
        for just /any/ program one lawfully acquires.  With that, we'll
        still be 2.5 to 3 freedoms apart of the software freedom proper,
        but that could be a good start, anyway.

[...]

--
FSF associate member #7257

Copies made under copyleft (and other public licenses) are not pirated
(illegal).

Copies made under copyleft (and other public licenses) are lawfully made
and initially are owned by the licensees (legal persons making use of
the reproduction right... downloading without a license contract aside
for a moment).

Thus copies made under copyleft (and other public licenses) fall under
exhaustion doctrine preventing copyright owners (licensors) using tort
theory (copyright infringement claims) regarding control of terms and
conditions for further distribution.

Got it now?

In article <5065832F.12351...@web.de>,
Alexander Terekhov  <terek...@web.de> wrote:

Right, and I hear that in the US income tax is unconstitutional.

-- Richard

Unfortunately, I think you've not got the European exhaustion doctrine.  

For traditional copies of non-electronic works, and for music CDs, DVDs
of films, etc, once a copy has been place on the EU market with the
copyright owner's consent, the owner's rights in **that particular
copy** have been exhausted.  He can't prevent onward transfer of **that
particular copy** throughout the EU.  

So if you've bought a copy, you can transfer it to someone else, e.g.
give it away or sell it secondhand.  

But the copyright owner's right to control the making and distribution
of **further** copies is not exhausted.  If you make a further copy
without permission, that still infringes the copyright.

The latest CJEU decision extends that for licensed software.  If you
have a licensed copy of non-free software, you can transfer or sell your
licence secondhand.  Importantly, the subsequent purchaser can make a
copy so he can use it - the copyright owner can't prevent that.  

But you have to make your copy unusable after you've transferred the
licence.  And the copyright owner **can** prevent both you and the
subsequent purchaser making and distributing **further** copies.  Those
would still infringe the copyright.

And that's it.  The new purchaser has the same rights you did, no more.  
This is the same as if you sold your copy of a music CD.  Neither you
nor the subsequent purchaser can make and distribute further copies of
the CD.

Now apply that to copylefted software.  If you transfer it to
someone else, and make your copy unusable, the new user can make the
necessary copy so he can use it.  But the CJEU decision doesn't
give the new user any new rights to distribute further copies.

So for both you and the new user, your only right to distribute further
copies comes from the terms and conditions of the copyleft licence.

I think you may be looking at the part of the decision which says that
the copyright owner can't require the subsequent purchaser to sign the
licence.  But a copyleft licence doesn't require signature anyway.  If
you make copies, it's implied that you accept the terms.  

Put another way, the CJEU decision doesn't give anyone a right to make
further copies, beyond the one needed by the subsequent purchaser to use
the software.  In the case of copylefted software, if a person to whom a
copy has been transferred does make and/or distribute further copies, it
must be implied he did so under the terms of the copyleft licence.  He
can't get the necessary right to do so any other way.

--
Tim Jackson
n...@timjackson.invalid
(Change '.invalid' to '.plus.com' to reply direct)

[...]

The GPL itself (and other public licenses) and unrestricted
distribution to the world over the net provides all the rights
needed to circumvent distribution restrictions under doctrine
of exhaustion. To make it easier for you to understand,
consider:

(Attribution: Isaac)

-----
Further, my understanding is that Alexander was proposing lawfully
acquiring and distributing copies and not making new copies.  If
the law requires that a backup or adapted copy be distributed with
the originals, Alexander would do that and then acquire, at no
expense, a new copy.  Rinse lather repeat.

You ask how a copy would be acquired without accepting the GPL.

I'm not aware of an expectation or requirement to accept the GPL
before downloading the software.  Free software is often made
available for downloading without any notice obtained before,
during or after the download that the copies obtained must be
deleted if the GPL is not accepted.

Anyone can obtain GPLd software, and provided only that they
include source code, operate a free or paid distribution ftp
site in which they allow GPLd software to be downloaded without
restriction.

Isaac
-----

You seem to not grok a rather simple concept: lawful ownership
of a copy incorporating work verbatim or even a copy incorporating
derivative work gives the owner of that copy all the rights to
distribute that copy without restrictions ("conditions" in
GNUspeak) as far as copyright law is concerned no matter who
(lawfully) made that copy.

<quote author=Hollaar>

That might be true IF "she doesn't have any right to act at all except
as the license permits."  But as I have pointed out here and in my
comments to the FSF regarding the new GPLv3, that is not the case.
United States copyright law provides a number of exceptions to the
exclusive rights of the copyright owner, including "first sale" as
covered in 17 U.S.C. 109 and the right in 17 U.S.C. 117 of the owner
of a copy of a computer to reproduce or adapt it if necessary to use
it.

The convenient redefinition of things in the GPL reminds me of a
quote from Abraham Lincoln:

     How many legs does a dog have if you call the tail a leg?
     Four.  Calling a tail a leg doesn't make it a leg.

</quote>

Note that Hollar worked with the Chief Judge and the Chief
Intellectual Property Counsel to the Senate Judiciary Committee
on Internet, copyright, and patent issues as a Committee Fellow...

You are talking here about European law - it's a decision from the Court
of Justice of the European Union.  

[snip]

How much bearing do you think 17 U.S.C. has on European law?

--
Tim Jackson
n...@timjackson.invalid
(Change '.invalid' to '.plus.com' to reply direct)

I've emphasised the words "that copy" in your post above.  Lawful
ownership gives no right whatsoever to make or distribute *further*
copies.

There's only one way that someone can get such a right to further
copies: from the copyleft licence, with all its conditions.  Thus the
copyleft licence is not rendered impotent.  

If they haven't accepted the copyleft licence, all the lawful owner can
do is to use **that one copy** that they've lawfully acquired.  Or to
transfer on **that one copy**.  Whereupon the new transferee is likewise
only able to use or transfer that one copy (unless they accept the
copyleft licence).  

To do more would infringe the copyright.  

The recent CJEU decision merely provides a mechanism to implement that
when the copy is licensed.  The previous owner must make his copy
unusable, and the transferee can make a new copy in its place.  The new
owner could later perform a similar transfer.  

But no further copies can be made or distributed -- except under the
conditions of the copyleft licence.  Contrary to your OP, copyleft has
not died.

I think your problem is that you are seeing a new owner who potentially
hasn't accepted the conditions of the copyleft licence.  But that means
that neither does he get the freedoms that also come with the copyleft
licence.  If he makes or distributes new copies, or makes a modified
copy, he would infringe the copyright.

--
Tim Jackson
n...@timjackson.invalid
(Change '.invalid' to '.plus.com' to reply direct)

[...]

At most it would be a license contract breach, not tort (copyright
infringement) because the licensee who made 'further' copies made it
within the scope of licensed *reproduction* right (no 'conditions' at
all having nothing to do with copyleft 'conditions' for distribution of
copies made) and owns the copies made... hence doctrine of exhaustion
regarding distribution right shields licensee against copyright
infringement claims.

What is so hard to understand here?

[...]

17 U.S.C. is currently known in European law as Article 5
"Exceptions to the restricted acts" of DIRECTIVE 2009/24/EC:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:111:0...

"Article 5

Exceptions to the restricted acts

1. In the absence of specific contractual provisions, the
acts referred to in points (a) and (b) of Article 4(1) shall
not require authorisation by the rightholder where they are
necessary for the use of the computer program by the lawful
acquirer in accordance with its intended purpose, including
for error correction.

2. The making of a back-up copy by a person having a right
to use the computer program may not be prevented by contract
in so far as it is necessary for that use.

..."

[... 17 U.S.C. 109 and 17 U.S.C. 117 ...]

           ^
           |
117 -------+

17 U.S.C. 109 is currently known in European law as Article 4(2):

"2. 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, with
the exception of the right to control further rental of the
program or a copy thereof."

That's wrong.  There is no such licensed reproduction right for the
**further** copies we are talking about here.  You've not understood the
CJEU decision.  It is limited to directly replacing the specific
licensed copy covered by the licence that the 'seller' has transferred
to the 'buyer'.  There is no right **under the CJEU decision** to make
further copies, beyond that one replacement for the original one.  [1]  
And the seller's original copy has to be made unusable.  

Therefore the new owner can use that replacement copy.  But he can't
make further copies.  He certainly can't distribute such further copies.

Unless someone has permission of some kind, making and distributing
copies is a breach of that copyright - i.e. a tort.  For the further
copies we are talking about here, there is no permission from the recent
CJEU decision.  And there is no permission from the copyleft licence if
its conditions have not been accepted.  Therefore there is an
infringement of the copyright.

Perhaps you will say that in the case of copylefted software, the CJEU
decision has the effect of transferring the right to make further
copies, because the copyleft licence permitted that, but without also
transferring the accompanying conditions.  

I don't believe the decision goes that far.  It's just about making sure
that the new owner of the software is able to use it.  He can make a
replacement copy to facilitate that.  But nothing more.  The decision is
about being able to use the replacement software copy, rather than about
being able to benefit from other provisions given by the licence.

Thus, the copyright holder can't use his reproduction right to prevent
the making of the replacement copy.  But the rest of his reproduction
rights remain intact.  In the case of copyleft, those remaining rights
still give control.  They mean that the person to whom the licence has
been transferred cannot make and distribute further copies, except by
accepting the copyleft conditions.

__________________

[1] Of course, if the original licence permitted two copies, or ten
copies, then the 'buyer' could make two or ten replacement copies, as
the case may be.  But the 'seller' has to make his original two or ten
copies unusable - they are just replacements, not further new copies.

--
Tim Jackson
n...@timjackson.invalid
(Change '.invalid' to '.plus.com' to reply direct)

So a lawful acquirer of a copy of copylefted software can do the same
things as if the software was non-free - such as error correction and
and making a back-up.  But ony to facilitate the use of that specifc
copy.  Nothing more.  This doesn't permit the making and distribution of
further copies.  

Big deal.

Again, I've emphasised "that copy".  There's no exhaustion of the right
to control the making and distribution of **further** copies.

--
Tim Jackson
n...@timjackson.invalid
(Change '.invalid' to '.plus.com' to reply direct)

[...]

Don't blend separate statutory rights together - I mean reproduction
("making") and distribution.

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.

[...]

 > In the context of copyleft and and other public licenses pirated
 > copies simply don't exist

        Why not?  A binary made of copylefted source would be an illegal
        one, unless accompanied by the exact version of the source used
        to build that copy.  (And such copies are known to 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.

        Let's imagine for a moment that under some jurisdiction^* making
        copies of software is never illegal.  Does it affect copyleft?
        I believe it doesn't.  And thus no law that merely extends the
        right of the users to make copies of the software they've
        lawfully acquired may cause harm to copyleft, because such
        extensions are indeed one of the intents of copyleft itself.

        On the contrary, it's the law that'd enforce stricter limits on
        the rights of the users to make such copies (than mandated by
        the respective license) would go against copyleft.

^*  Consider, e. g.:

--cut: http://www.theregister.co.uk/2006/11/03/spanish_judge_says_downloadin... --
    Judge Paz Aldecoa of No. 3 Penal Court ruled that under Spanish law
    a person who downloads music for personal use can not be punished or
    branded a criminal.  He called it "a practised behaviour where the
    aim is not to gain wealth but to obtain private copies".
--cut: http://www.theregister.co.uk/2006/11/03/spanish_judge_says_downloadin... --

--cut: http://torrentfreak.com/downloading-3322-movies-is-okay-in-spain-090529/ --
    The judge acknowledged that the man indeed downloaded the files
    "without consent of the copyright holders" in 2003 and 2004, but
    ruled that he only did so for for "private use or sharing with other
    Internet users."  There was no financial gain, so no crime has been
    committed and the defendant walked free.
--cut: http://torrentfreak.com/downloading-3322-movies-is-okay-in-spain-090529/ --

https://en.wikipedia.org/wiki/Legal_aspects_of_file_sharing#Spain

--
FSF associate member #7257

I'm not.

Right.

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.
[1]

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
conditions.

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
n...@timjackson.invalid
(Change '.invalid' to '.plus.com' to reply direct)

To be clear: There's no exhaustion of the right to control making,
because the exhaustion doctrine doesn't apply to the reproduction right.  
And there's no exhaustion of the right to control distribution, because
without the copyleft conditions the copyright holder hasn't consented to
the copy concerned being placed on the European market.

--
Tim Jackson
n...@timjackson.invalid
(Change '.invalid' to '.plus.com' to reply direct)

[... the copy concerned being placed on the European market ...]

Exhaustion of the distribution right covers all lawfully made copies
owned by strangers regarding copyright in a work fixated in a copy. A
copy does not necessarily have to be transferred to the owner on a
physical medium or somehow specially "placed on the European market".
Having the copy made with the authorization of the copyright owner (i.e.
with permission to reproduce / prepare derivative works conveyed by the
copyleft and other public licenses) is enough.

It is even possible that some unauthorized copies may fit the bill if
the circumstances suggest that they are lawfully made.

The distribution right comes by statute as addition to the granted
reproduction right / right to prepare derivative works.

License contract may attempt to restrict that distribution freedom
('only private use, no distribution', copyleft 'conditions' imposed for
distribution of 'further' copies made, etc.) but that has nothing to do
with statutory tort (copyright infringement) in the case of breach of
restrictions/requirements for distribution.

No, exhaustion only applies to copies which have been placed on the
European market by or with the consent of the copyright holder. [1]

There is one additional lawfully made copy to which the copyright owner
has not consented.  That's the copy permitted by the recent CJEU
decision.  And that's the copy which you believe brings down the whole
edifice of copyleft.

You believe - wrongly - that this one copy can be duplicated ad
infinitum, because in your view the right to distribute it has been
exhausted.

There are several reasons why that belief is wrong.

One is that the reproduction right still exists.  The reproduction right
is never exhausted.  Exhaustion only ever applies to the distribution
right.

Another reason why your belief is wrong is that even when the
distribution right is exhausted, that happens on a copy-by-copy basis.  
Once a copy is placed on the European market with the consent of the
copyright holder, that specific copy can be transferred on.  But that
exhaustion doesn't permit any further copies to be made or distributed
(except, now, the single replacement copy permitted by the CJEU
decision, with previous copies made unusable).

The reproduction right is what prevents duplication of further copies -
unless permission is granted.  The CJEU decision only grants permission
for reproduction of one single replacement copy, with the previous
owner's copy being made unusable.  The copyleft licence grants
permission for reproduction of multiple copies, but only under the
copyleft conditions.  

The CJEU decision does not permit reproduction of multiple copies to
which the copyleft conditions do not apply.

It doesn't have to be on a physical medium, but it does have to be
placed on the European market by or with the consent of the copyright
holder.  That's the whole basis for the exhaustion doctrine.  

Article 4(2) which you quoted agrees with that.  [1]

The only copy authorised by the recent CJEU decision is just a single
replacement copy.  And it's not authorised by the copyright holder, only
by the decision.

Crucially, for this replacement copy, the decision gives no
authorisation to reproduce any more copies.  And no authorisation to
prepare derivative works.  

The permission you are talking about comes from the copyleft licence,
which is of course still available, in parallel to the decision.  But it
comes with the copyleft conditions attached.

No.  For exhaustion, being lawful is not enough.  It has to be placed on
the European  market by or with with the consent of the copyright owner.  
See [1]

And unless it is exhausted, it is a right which enables the copyright
holder to *prevent* distribution.

It's not a distribution freedom provided by a licence contract.  Unless
exhausted, it is a right to *prevent* distribution, provided by statute.  
A licence can specify conditions under which the copyright holder is
prepared to give permission.

The reproduction right is never exhausted.  But the copyleft licence
permits copies to be made subject to the copyleft conditions.

Exhaustion of the distribution right applies only to specific copies
placed on the market with the consent of the copyright holder.  He only
consents to those specific copies which have been made subject to the
copyleft conditions.

The CJEU decision only allows a replacement copy, with the previous copy
being made unusable.

There are a few other narrow exceptions to copyright protection, which
are not relevant here.

Any other copy infringes the copyright.

____________________

[1]  More specifically, Article 4(2) says that what exhausts the
distribution right is the first sale in the Community by the rightholder
or with his consent.  Sale is one form of placing the copy on the
European market.  

As an aside, you might be tempted to think that 'sale' is not really
applicable to copylefted software anyway, and that therefore exhaustion
never applies at all if there is no sale.  But there is 50 years of case
law behind the exhaustion doctrine.  "Placed on the European market by
or with the consent of the copyright holder" is a concept that comes
from that case law.  Article 4(2) is just the tip of a very large and
very well-established iceberg, which is fundamental to European
intellectual property law.

--
Tim Jackson
n...@timjackson.invalid
(Change '.invalid' to '.plus.com' to reply direct)

I'm not sure if this is a source of confusion here, but please remember
that the reproduction right and the distribution right are both
exclusive statutory rights which belong to the copyright holder.  They
allow him to *prevent* reproduction and distribution respectively.

Since the copyright holder has the exclusive rights to prevent
reproduction and distribution, it then follows that he can choose not to
exercise those rights.  He can allow other people to reproduce and/or
distribute the work, subject to such conditions as he may decide.

--
Tim Jackson
n...@timjackson.invalid
(Change '.invalid' to '.plus.com' to reply direct)

Exclusive distribution right is severely limited by 'first sale' /
exhaustion meaning that exclusivity allows to forbid distribution of
copies made unlawfully (pirated copies). Distribution of lawfully made
copies by owners of copies are not covered by the exclusive distribution
right of the copyright owners.

Do you agree that in the context of copyleft and other public licenses
it is simply impossible to make a copy in machine readable form
unlawfully?

If not then give an example but forget about eventual subsequent
distribution of that copy for a moment (that is another act shielded by
the doctrine of exhaustion).

You consistently ignore the fundamental point that in European law what
exhausts the distribution right is *not* whether the copy is lawful.  
It's whether the copyright holder consented to placing the specific copy
concerned on the European market.  

In the case of pirate copies, he hasn't.  And in the case of the
replacement copy permitted by the CJEU decision, he hasn't.

You even quoted Article 4(2), but then you ignore what it says about how
the copy needs to have been first sold in the Community by or with the
consent of the copyright holder.

Then you consistently ignore the even more fundamental point that the
reproduction right - the right of the copyright holder to control
reproduction of copies - is *never* subject to the exhaustion doctrine.

Before you can distribute copies, you have to make them.  That is only
permitted either:
   (a) in accordance with the conditions of the copyleft licence, or
   (b) the CJEU decision permits making a replacement copy to enable the
new owner to use it (and so no doubt also permits it to be compiled to
machine code for that purpose, if necessary).  The previous copy must be
made unusable, and there's no blanket permission to make and/or
distribute multiple copies.

What I don't agree is that that's a relevant question.

Under the copyleft licence, certainly copies can be made.  But they are
subject to the copyleft conditions.  The CJEU decision doesn't alter
that.  The copyleft licence gives additional permissions in parallel to
the decision, but subject to the copyleft conditions.

Making copies is not shielded by the doctrine of exhaustion.  See above,
and re-read Article 4(2).  The doctrine of exhaustion applies only to
the copyright holder's right to control distribution of existing copies.  
His right to control reproduction is not affected.  Before you can
distribute a copy, you have to make it.

I think you may be misunderstanding the meaning of "distribution" in
European copyright law.  To a software author, distribution might mean
putting a copy on a website so people can make their own copies.  But
that's not the legal meaning.  Legally, when people make copies, that's
reproduction, not distribution.  Distribution is the act of transferring
an existing copy, which has already been made previously, to a new
owner.  The act of making a copy is distinct from the act of
distributing it.  

--
Tim Jackson
n...@timjackson.invalid
(Change '.invalid' to '.plus.com' to reply direct)