TU Darmstadt operates a regional and academic library with electronic reading points at which members of the public can consult works contained in the library’s collection. TU Darmstadt digitized a textbook published by Ulmer to make it available to users on their electronic reading points. At the reading points, users could not consult a greater number of copies of a work at any one time than the number of copies owned by the library, but users could print out the work on paper or store it on a USB stick, in part or in full, and take it out of the library in that form.

Ulmer sued in the Frankfurt Regional Court, which held that a right holder and an establishment must reach prior agreement on the digital use of a work, rejected Ulmer’s application to prohibit the digitization of the textbook at issue and granted the request to prohibit users of the TU Darmstadt library from being able to print out that work and/or store it on a USB stick and/or take such reproductions out of the library. On appeal, it was further held that printouts, stored copies, and downloads are related to the reproduction of a work and are not, in principle, covered by the limitation provided for in Article 5(3)(n). Nonetheless, the Court held that they would be permitted, as an extension of the communication or of the making available of a work by the establishment in question, under another limitation, namely, the “private copying” exception in Article 5(2)(b) of the Directive.

The appellate court considered whether the objectives of Article 5(3)(n) were consistent with an interpretation of that provision to the effect that the printing out of a work from a terminal should be permitted, whereas storage on a USB stick should not be as storage on a USB stick encroaches upon the rights of the author of that work more than printing it out on paper. The court decided to stay proceedings and refer three questions to the ECOJ:

“(1) Is a work subject to purchase or licensing terms, within the meaning of Article 5(3)(n) of Directive 2001/29, where the rightholder offers to conclude with the establishments referred to therein licensing agreements for the use of that work on appropriate terms?

(2) Does Article 5(3)(n) of Directive 2001/29 entitle the Member States to confer on those establishments the right to digitise the works contained in their collections, if that is necessary in order to make those works available on terminals?

(3) May the rights which the Member States lay down pursuant to Article 5(3)(n) of Directive 2001/29 go so far as to enable users of the terminals to print out on paper or store on a USB stick the works made available there?” (para. 22).

Before the ECOJ, TU Darmstadt argued for an interpretation of the concept “purchase or licensing terms,” to be understood to mean that the rightholder and establishment concerned must have concluded a licensing agreement in respect of the work in question that sets out the conditions in which that establishment may use the work. Ulmer argued that the mere fact that the rightholder offers to conclude a licensing agreement with a publicly accessible library is sufficient for ruling out the application of Article 5(3)(n) of the Directive, provided always that such offer is “appropriate.”

Judges L. Bay Larsen, President of the Chamber, M. Safjan, J. Malenovský, A. Prechal, and K. Jürimäe delivered the opinion of the ECOJ. The ECOJ compared the language versions of Article 5(3)(n) of the Directive, particularly the English, French, German and Spanish versions — which used the words “terms,” “conditions,” “Regelung” and “condiciones,” and found that the EU legislature used the concepts of “terms” or “provisions” to refer to contractual terms actually agreed upon as opposed to mere contractual offers as argued by Ulmer.  The ECOJ held that Ulmer’s interpretation implied that a right holder could at his or her own discretion unilaterally deny an establishment the right to benefit from that limitation in Article 5(3)(n), thereby preventing it from realizing its core mission to promote the public interest by making works available to users. In other words, Ulmer’s interpretation was difficult to reconcile with the aim pursued by Article 5(3)(n) of the Directive to maintain a fair balance between the rights and interests of right holders, on the one hand, and those of users of protected works who wished to communicate them to the public for the purpose of research or private study undertaken by individual members of the public, on the other hand.