What is a book loan…legally speaking?
As libraries we know that information is primordial and precious. Without information there would be neither advances in science and medicine, nor innovations in business and technology and no achievements in education and the arts. The cost of research, writing and editing is substantial and the results of sometimes Herculean efforts. Therefore the law protects the rights of creators. These rights cover inter alia broadcast and public performance, copying, adapting, issuing, renting and also lending copies to the public.
Remuneration for lending books
Most copyright acts over the world provide for a remuneration to be paid to rights holders for the lending of copies. The Dutch copyright act states in its art. 15g that “Persons required to pay the remuneration …shall be obliged to submit to the legal person (Stichting Leenrecht, plaintiff in current case)… the number of juristic acts” with regard to the lending.
Juristic act of lending
According to the Supreme Court of The Netherlands there is no legal obligation to pay a separate remuneration for a renewal of a library book loan and the extension of the due date. Plaintiff, the Foundation for Public Lending, a collective society, sued the Association of Public Libraries and argued that the refusal to collect such a separate payment was contrary to the three-step test.
On 13 November 2012 the Dutch Supreme Court ruled that the payment of remuneration based on art. 15g of the Dutch Copyright Act(DCA) is not to be determined by the number factual loans but by the number of juristic acts or loans as defined in art. 15c DCA. A loan is to be understood as a juristic act whereby the work is handed over to a particular person from the relevant public for use for a limited time.
Extension of loan
An extension of a loan is not to be regarded as a relevant new juristic act or loan, because the period of extension is part of the “limited time”. Therefore, the extension of the due date does not lead to a higher remuneration. However, the fact that a separate remuneration is not required, does not imply that the compensation received does not also regard possible extensions of the loan and that the number of factual loans (including extensions) cannot be taken into account when determining the height of the remuneration. A remuneration must be equitable.
In line with community legislation
The court based its judgement that an extension cannot be regarded as a new loan on the fact that a loan as defined by art. 1, b. of Directive 2006/115/EC on rental right and lending right (implemented by the DCA par. 3. of art. 12 where the notion of lending is defined) and the DCA, regards to a juristic act whereby a work is handed over for use to a certain person from the relevant public for a limited period of time. An extension cannot be considered to be a relevant new juristic fact, since the period of extension is included in the “limited time” during which the work is placed at the factual disposal of the user.
The Acts of Dutch House of Representatives (1992/1993, 23247, No. 3, p. 22), state explicitly that the definition of “number of loans” has to be understood as “the number of juristic acts as referred to in article 15c DCA”. This interpretation is in line with the EC directive.
If in doubt, the Supreme court could have asked for a preliminary ruling of the Court of Justice, quod non.
Dutch Supreme court decision (Nov. 2012) (in Dutch)
Link to the English version of the Dutch copyright act (Institute for Information Law)
Griffiths, Jonathan, The ‘Three-Step Test’ in European Copyright Law – Problems and Solutions (September 22, 2009). Queen Mary School of Law Legal Studies Research Paper No. 31/2009. Available at SSRN: http://ssrn.com/abstract=1476968