Private copying levy also for unauthorized copies?

According to today's decision of the Court of Justice of the European Union (EuGH), unlawful reproductions – irrespective of the use of a technical protection measure – may not be taken into account when determining the amount of the levy for the making of private copies of a copyright-protected work.

The background to this decision is the possibility for European Member States to provide for an exception to the author's exclusive right of reproduction, which permits the making of private copies of copyright-protected works. This includes, for example, CDs containing a copy of a music album. Member States that decide to introduce such an exception are obliged to provide for a fair compensation to the author in order to compensate them adequately. German copyright law also contains a provision that permits the making of private copies. To compensate authors and exploiting entities, flat-rate levies in the form of device and blank media levies are paid to the collecting societies.

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The Netherlands has a comparable regulation, according to which enterprises must pay a levy to a foundation, with the amount being determined by another foundation. A Dutch manufacturer of blank data carriers was of the opinion that this foundation must not take into account the damage caused to authors by the fact that private copies are made from unlawful sources. Therefore, the Hoge Raad der Nederlanden (Supreme Court of the Netherlands) decided to refer questions to the Court of Justice.

Decision of the EuGH

By its judgment of 10.04.2014 (C-435/12), the EuGH has addressed these questions. According to this, national legislation that in no way distinguishes between private copies from lawful and unlawful sources cannot be permitted. This would promote the dissemination of counterfeit works and impair the exploitation of copyright-protected works. The holders of copyright would thereby be duly damaged. According to the EuGH, the fact that no applicable technical measure exists to prevent the making of unlawful private copies is irrelevant.

The remuneration system must ensure an appropriate balance of rights and interests between authors and users. If the remuneration system does not distinguish in its calculation between whether the source of the private copy is lawful or unlawful, it does not contribute to an appropriate balance. The remuneration amount is calculated on the basis of the damage caused to authors both by lawful and by unlawful private copies. The amount thus calculated is then transferred to the purchase price of devices and data carriers, whereby all users are indirectly penalised, since they are inevitably required to contribute to the compensation for the damage caused to rights holders by private reproduction from unlawful sources.

Conclusion:

The correct application of the private copying exception requires a distinction between lawful and unlawful reproduction. German copyright law provides for such a distinction within the framework of the regulation on private copying. In the case of private copying, it is therefore essential whether this is based on a lawful source. Only in this way can an appropriate balance between the interests of authors or rights holders and users be achieved.