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    EU High Court Upholds Private Copy Levies On First Sale Of Blank Media

    Published on 11 July 2013 @ 7:10 pm

    By for Intellectual Property Watch

    Setting general private copying levies on the first sale of blank media such as CDs and DVDs does not necessarily breach EU law, Europe’s highest court said on 11 July. The law does not allow the levy to be collected where the intended use of the recording media clearly isn’t for making private copies. But it doesn’t bar a general levy system that includes the option of reimbursement where the intended use is not private copying, the European Court of Justice (ECJ) said.

    The case, Amazon.com International Sales Inc. and Others v Austro-Mechana Gesellschaft zur Wahrnehmung mechanisch-musikalischer Urheberrechte Gesellschaft mbH, involves a claim by Austrian copyright collecting society Austro-Mechana for payment of the so-called “blank cassette levy” for recording media sold in Austria from 2002 to 2004, the ECJ said. The society claimed Amazon owed it €1,856,275 euros for the first half of 2004, and sought a court order requiring the internet retail giant to provide the accounting data needed to support its claim for the rest of the period.

    The Commercial Court in Vienna ordered Amazon to produce the requested accounting data, which was upheld on appeal, the ECJ said. Amazon, however, challenged the order in the Supreme Court on the ground that Austria’s blank cassette levy violates European Union law. That court asked the ECJ to interpret the relevant provisions of EU law.

    The ruling is available here.

    General Levies Legal if Reimbursement Possible

    The ECJ pointed out that EU countries may grant an exception to copyright law for the making of private copies, provided that rightsholders receive “fair compensation” for the unauthorised reproduction of their protected works. In Austria, that fair compensation takes the form of a private copying levy imposed on the original, commercial placing into the market of blank CDs, DVDs, MP2 players, memory cards and other reproduction media, the court said.

    EU law bars private copying levies in cases where the intended use of the reproduction media is clearly for non-private uses, the ECJ said. However, under certain conditions the law allows such a general levy if there is the possibility that any levy paid can be reimbursed where the intended use is not for private copies, it said. The Austrian courts must decide whether a system that finances fair compensation that way raises practical difficulties and whether the right to reimbursement is effective and doesn’t make repayment of levies too difficult, it said.

    There may be a rebuttable presumption that people are using recording media for private purposes if two conditions are met, the ECJ said. Practical problems in determining whether the media is being used for private purposes must warrant establishment of such a presumption; and the presumption must not result in private copy levies being set where those media are clearly used for non-private purposes.

    The EU high court also ruled that the fact that half of the income from blank media is paid to social and cultural establishments set up for rights owner’s benefit, and not to copyright owners themselves, doesn’t exclude the right to fair compensation. It also said that levies on blank media may be imposed even if a similar levy has already been paid in another EU member state.

    Industry Reaction

    European authors, producers and editors of musical, audiovisual and written works “rejoiced” in the decision, saying it upheld the right of governments to fund cultural actions out of levy monies. The ruling validates the system put in place in France in 1985, which allows 25 percent of the sums collected for private copying to be dedicated to cultural uses such as helping artists and financing festivals, 11 rightsholder groups said in a joint statement. The ruling also pushes back against the Vitorino report, which they said largely addresses concerns by Apple and other equipment importers to dismantle the private copy system.

    Meanwhile, a digital technology industry source told Intellectual Property Watch that the decision is important for the ongoing debate on private copy levies but doesn’t go “in the right direction.”

    The judgment is off-track for several reasons, the industry source said. It confirms that part of the money collected through private copy levies can be used indirectly to fund cultural activities, which industry believes has nothing to do with compensating for acts of private copying, and which amounts to a form of subsidy to the cultural sectors.

    Not only does 50 percent of the money collected in Austria not go to artists themselves in the form of remuneration, but the system leaves collecting societies free to fund whatever activities they want, with no real control in many EU countries, the source said. This indirect use of the levies is used in several member states to pay collecting societies’ legal and lobbying fees, or for social benefits for society members, he said.

    Another concern is that even though the ECJ said that reimbursement for professional users of the media must be effective and easier to obtain in practice, “this judgment will help keep an absurd system in place” in which professional will continue to have to pay private copying levies they shouldn’t pay in the first place. The source pointed to the 21 October 2010 ECJ decision in Padawan SL v Sociedad General de Autories y Editores, which held that application of the private copying levy to digital reproduction equipment, devices and media not made available to private users and clearly reserved for uses other than private copying was incompatible with EU law.

    Most professional users of blank media don’t know they can claim reimbursement, and those who try rarely succeed because the scheme is so complicated, the industry source said. A growing number of companies which need to buy devices or products subject to copyright levies now choose to buy them in European countries that don’t have levy systems, because the products are cheaper and getting reimbursed in their own countries is very difficult, the source said.

    ECJ Ruling “Doesn’t Follow” Vitorino Report Logic?

    In his 31 January 2013 report, European Commission-appointed mediator António Vitorino recommended several major changes to the copy levy system to align it to the digital age.

    The report also sought more transparency and efficiency in the whole system, the industry source said. The ECJ judgment “doesn’t follow this logic” because European consumers are still going to pay for a “very opaque system” of cultural funding which has no relation to private copying, he said.

    Among other things, Vitorino recommended that the liability to pay levies be shifted to retailers, who are in a better position to judge who is a professional or a private user, or that there be a clear “ex ante” (in advance) exemption from the levies for professionals. These are both “forward-looking, common-sense recommendations,” the source said.

    Dugie Standeford may be reached at info@ip-watch.ch.

     


    Leave a Reply

    We welcome your participation in article and blog comment threads, and other discussion forums, where we encourage you to analyse and react to the content available on the Intellectual Property Watch website. By participating in discussions or reader forums, or by submitting opinion pieces or comments to articles, blogs, reviews or multimedia features, you are consenting to these rules.

    We welcome your participation in article and blog comment threads, and other discussion forums, where we encourage you to analyse and react to the content available on the Intellectual Property Watch website.

    By participating in discussions or reader forums, or by submitting opinion pieces or comments to articles, blogs, reviews or multimedia features, you are consenting to these rules.

    1. You agree that you are fully responsible for the content that you post. You will not knowingly post content that violates the copyright, trademark, patent or other intellectual property right of any third party or which you know is under a confidentiality obligation preventing its publication and that you will request removal of the same should you discover that you have violated this provision. Likewise, you may not post content that is libelous, defamatory, obscene, abusive, that violates a third party's right to privacy, that otherwise violates any applicable local, state, national or international law, that amounts to spamming or that is otherwise inappropriate. You may not post content that degrades others on the basis of gender, race, class, ethnicity, national origin, religion, sexual preference, disability or other classification. Epithets and other language intended to intimidate or to incite violence are also prohibited. Furthermore, you may not impersonate others.

    2. You understand and agree that Intellectual Property Watch is not responsible for any content posted by you or third parties. You further understand that IP Watch does not monitor the content posted. Nevertheless, IP Watch may monitor the any user-generated content as it chooses and reserves the right to remove, edit or otherwise alter content that it deems inappropriate for any reason whatever without consent nor notice. We further reserve the right, in our sole discretion, to remove a user's privilege to post content on our site. IP Watch is not in any manner endorsing the content of the discussion forums and cannot and will not vouch for its reliability or otherwise accept liability for it.

    3. By submitting any contribution to IP Watch, you warrant that your contribution is your own original work and that you have the right to make it available to IP Watch for all purposes and you agree to indemnify IP Watch, its directors, employees and agents against all damages, legal fees and others expenses that may be incurred by IP Watch as a result of your breach of warranty or of these terms.

    4. You further agree not to publish any personal information about yourself or anyone else (for example telephone number or home address). If you add a comment to a blog, be aware that your email address will be apparent.

    5. IP Watch will not be liable for any loss including but not limited to the following (whether such losses are foreseen, known or otherwise): loss of data, loss of revenue or anticipated profit, loss of business, loss of opportunity, loss of goodwill or injury to reputation, losses suffered by third parties, any indirect, consequential or exemplary damages.

    6. You understand and agree that the discussion forums are to be used only for non-commercial purposes. You may not solicit funds, promote commercial entities or otherwise engage in commercial activity in our discussion forums.

    7. You acknowledge and agree that you use and/or rely on any information obtained through the discussion forums at your own risk.

    8. For any content that you post, you hereby grant to IP Watch the royalty-free, irrevocable, perpetual, exclusive and fully sub-licensable license to use, reproduce, modify, adapt, publish, translate, create derivative works from, distribute, perform and display such content in whole or in part, world-wide and to incorporate it in other works, in any form, media or technology now known or later developed.

    9. These terms and your posts and contributions shall be governed and interpreted in accordance with the laws of Switzerland (without giving effect to conflict of laws principles thereof) and any dispute exclusively settled by the Courts of the Canton of Geneva.

     

     
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