Brussels, 21/10/2010 (Agence Europe) - Reproduction media such as MP3s, DVDs and recordable CDs acquired by professionals and companies whose goals are not exclusively private copying, should not be subject to a “private copying levy”, although such a levy can be applied for the same media if they are likely to be used by natural persons for private use.
This is the main thrust of the ruling made on Thursday 21 October by the European Court of Justice (ECJ), which was responding to different litigation questions from the Audiencia Provincial de Barcelona (Spain) in case number C-467/08. The Spanish court wanted to know what criteria should be taken into consideration when calculating the amount and “fair compensation” collection system, which has to be paid to intellectual copyright holders (companies collectively managing intellectual property rights for authors and publishers, etc.) whose work has been reproduced. This compensation included in the directive on copyright and related rights (2001/29/CE), is deducted in the form of a “private copy levy” on all media materials, irrespective of their private, professional or commercial use. It was this indiscriminate application of this levy, which was opposed at the Spanish court by a company involved in marketing materials in question.
Interpreting Article 5 of the directive, the ECJ firstly pointed out that the notion of “fair compensation” included in this directive should be applied across the board in the Union, irrespective of the faculty recognised by the member states for determining the form, finance and levy modalities, as well as the appropriate level. This compensation must respect the “balance” between right holders and users of protected products. It is also to be considered as compensation for any harm suffered by the author for the non-authorised reproduction of their protected work. Therefore, this harm constitutes the basic criteria for calculating the amount of compensation that should be paid by the person reproducing material for their own private use.
Nonetheless, the harm resulting from each separate private use could be minimal and not result in a payment obligation. Identification of private users and the calculation of the exact amount of harm caused in each separate private use of the material could prove difficult because it would be hard to compel each private user to compensate rights holders. This is why, still in the name of “fair balance”, the directive leaves it up to member states to set up a levy on people that have digital material and equipment devices. According to the ECJ, these people place “in law or in fact”, this equipment in the hands of private users or provide the latter with the media reproduction service. They are subject to the financial levy as part of their compensation, in so far as they pass on the real charges of this financing to private users.
A private copy levy system is not compatible with this “fair balance” unless the media reproduction material, devices and equipment in question are likely to be used for private copying purposes and harm the author of the protected work. In this sense, there must exist a “necessary link” between the application of the levy and the use of the material for private media reproduction purposes. Consequently, indiscriminate application of the levy, particularly the with regard to equipment, devices and materials for me to reproduction, which are not available to private users and obviously reserved for other uses other than private use, is not in compliance with directive 2001/29.
On the other hand, when the equipment in question has been made available to natural persons for private use, it is not necessary to establish that the latter have effectively made private copies and have caused harm to the author of the protected work. It can be presumed in this case that the natural persons are fully exploiting the functions associated with the equipment in question, including media reproduction materials. Therefore, the simple capacity of these materials or devices to make copies is sufficient for justifying application of the private copy levy, as well as for the said equipment or devices that have been made available to natural persons for private use.
Given the particularly current and controversial nature of the subject, it is likely that this ruling becomes case law and is largely debated at a political level. (F.G./transl.fl)