CJEU rules that exhaustion only applies to the tangible medium of a work

The CJEU’s decision of 22 January 2015 in Case C-419/13, Art&Allposters v. Stichting Pictoright, followed a reference for a preliminary ruling from the Dutch Supreme Court. The proceedings concern the unauthorised making and selling by Art&Allposters of altered versions of copyright-protected artworks, whose rights are managed by the Dutch CMO Stichting Pictoright. 

In a nutshell, the CJEU now ruled as follows:
The EU Information Society Directive 2001/29 does not mention the adaptation right explicitly. However, a situation like the one at hand, i.e. paper poster and canvas transfer of copyright-protected works, falls within the scope of the distribution right under Article 4(1) of the Information Society Directive;
Exhaustion of the right of distribution contained in Article 4(2) of the Information Society Directive only applies to the tangible support of a work.
 
More specifically, the CJEU referred to Recital 28 to the EU Information Society Directive 2001/29/EC and the WIPO Copyright Treaty, and concluded that exhaustion of the distribution right only applies to tangible objects: “Article 4(2) of Directive 2001/29 must be interpreted as meaning that the rule of exhaustion of the distribution right set out in Article 4(2) of Directive 2001/29 does not apply in a situation where a reproduction of a protected work, after having been marketed in the European Union with the copyright holder’s consent, has undergone an alteration of its medium, such as the transfer of that reproduction from a paper poster onto a canvas, and is placed on the market again in its new form.” (cf. para 49)
 
Notably, by suggesting that exhaustion under Article 4 of the EU Information Society Directive only applies to the tangible support of a work, the CJEU seems to imply that there is no general digital exhaustion under EU copyright (cf. the CJEU’s decision in UsedSoft).