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Metronome Musik GmbH v Music Point Hokamp GmbH,Case C-200/96, 28 April 1998

Facts: Metronome Musik is a German company which produced the compact disc "Planet Punk". Music Point Hokamp, which runs a compact disc rental business, offered copies of the abovementioned CD for rental. The Community Directive at issue requires the Member States to provide a right to authorise or prohibit the rental of copyright works. In Germany, the Law implementing that Directive requires the consent of the rightholders for the rental of protected works. On the basis of that provision, Metronome Musik sought an injunction from the regional court restraining Music Point Hokamp from renting out the compact disc.

Issue: Validity of Art. 1(1) of Council Directive 92/100/EEC on rental right and lending right in the field of intellectual property; and the compatibility with Community law principles of an exclusive copyright over the rental and lending of originals and copies of protected works, not exhausted by the sale of the original or the rented or lent copy

Holding: the court found no factor affecting the validity of Article 1(1) of Council Directive 92/100/EEC

Reasoning:  Laws which provide specific protection of the right to hire out video-cassettes are justified on grounds of the protection of industrial and commercial property. Thus, the distinction in the Directive between the specific rental and lending right and the distribution right (mainly distribution by sale) is justified. The introduction of an exclusive rental right does not constitute any breach of the principle of exhaustion of the distribution right, the purpose and scope of which are different.

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