The Court of Justice of the European Union recently handed down two rulings concerning private copying and the imposition of levies.
Some years back, it was commonplace to put movies, music and other content on blank CDs and DVDs.
One mode of compensating copyright holders for lost income from piracy was by taxing the purchase of recordable media.
Copyright levy systems impose fees on the manufacture, import or sale of devices and media which can be used to store or reproduce copyrighted works.
According to the EU Directive on Copyright, member states should grant authors, performers, producers and broadcasting organisations the exclusive right to authorise or prohibit the reproduction of their works, fixations of their performances, their phonograms, their films and fixations of their broadcasts.
Limitations to these exclusive rights exist when it comes to private copying. Private copying is exempted from liability for copyright infringement in return for the payment of fair compensation to the right holder.
To provide for such fair compensation, several EU member states currently impose a levy on reproductive devices, which levy operates as a surcharge on equipment or blank media that can be used for private copying.
EU countries adopt different approaches, with copyright levies applied at different rates to different products in some but not all member states.
EU wide measures are in the pipeline for a European regulation of private copying and reprography levies intended to establish a harmonised levy system within the EU.
On a reference made by the German Federal Court, the European Court was called upon to rule on whether the collection of a private copying levy for the reproduction of protected works made with the use of a chain of devices, specifically a printer and a computer is compatible with EU law.
The legal dispute originated between the authorised copyright collecting society representing authors and publishers of literary works in Germany and various manufacturers of personal computers and printers, including Epson, Hewlett-Packard and Kyocera.
The latter were faced with a claim for remuneration by way of a levy on personal computers, printers and plotters marketed in Germany from 2001 to 2007.
The European Court ruled in favour of copyright levies on the first sale of recording media for the reproduction of protected works.
In essence, this means that a private copying levy can be imposed on the sale of a printer and a computer when the two are linked together.
In such a case, member states are allowed to put into place a system according to which fair compensation is paid by the persons possessing a device that contributes to the single reproduction of the protected work on the given medium.
In order to be legal, the court ruled that the overall amount of fair compensation must not be disproportionate, copyright levies must be applied indiscriminately, and double imposition of levying on both a PC and a printer is prohibited.
Importantly, the court noted that the fact that techno-logical measures designed to prevent or restrict unauthorised reproduction have not been applied by the right holders does not affect their right to receive fair compensation for private copying.
Another ruling of the Luxembourg-based court delivered as a result of a referral made by the Austrian Supreme Court closely following the position expressed by the court in the German case. An Austrian copyright collecting society brought an action against Amazon for payment of the levy on all recording material sold by Amazon in Austria in the region of €1.6 million.
EU countries can collect a levy on blank recording media to ensure artists get fair rewards for their work
The court affirmed that EU law does not allow the private copying levy to be collected in cases where the intended use of the media equipment is clearly not the making of private copies.
Given that there may be practical difficulties in identifying private users, member states can establish a levy chargeable to the sellers of the reproduction media.
This means that such a levy will be applied irrespective of whether the final intended use is not the making of private copies.
EU law allows this system of a general levy with the option of reimbursement in cases where the intended use is not the making of private copies.
Interestingly the court allowed the possibility of equivalent levying in different member states in cross-border transactions. This means that the obligation to pay this copyright levy can be triggered in more than one member state even if an equivalent levy has already been paid in one member state.
EU countries can collect a levy on blank recording media as a tool to ensure artists get fair rewards for their work.
However, the differing approaches taken by member states on the issue of levies creates imbalances across the European market.
Moreover, a levy system may no longer work now that new multifunctional hardware products are launched every year.
Josette Grech is an associate with Guido de Marco & Associates and heads its European Law division.